Ocean Couple, Son Indicted In Military Parts Fraud Scheme: US Attorney

TRENTON, NJ — A Jackson Township couple and their son have been indicted in what federal prosecutors say was a years-long scheme to defraud the U.S. Department of Defense by substituting cheap parts for military equipment for ones promised under the contracts, U.S. Attorney Philip R. Sellinger announced.

Linda Mika, 70, and Paul Mika, 74, both of Jackson, and Kenneth Mika, 50, of Ewing, have been charged with one count of conspiracy to commit wire fraud and five counts of wire fraud in connection with the scheme. Kenneth Mika was additionally charged with two counts of making false statements, the U.S. Attorney's office said.

Paul Mika was the owner of Monmouth Marine Engines, a maritime equipment and servicing facility. Linda and Kenneth worked for the company, which was an approved federal contractor and had contracts with the Defense Logistics Agency to supply replacement hardware, the U.S. Attorney's Office said.

Under the contracts, Monmouth Marine was to supply the replacement hardware for the various military branches. In bidding for the contracts, they claimed the military parts would be exact products furnished by authorized manufacturers or suppliers, but the U.S. Attorney's Office said that once the contracts were awarded, the Mikas sourced non-conforming substitute parts at a significantly reduced cost to fill the contracts.

Federal authorities allege the Mikas swapped the parts to maximize their profit margin while also suppressing fair competition in the bidding of federal contracts.

When they received the nonconforming parts, they shipped them to the Defense Logistics Agency "in packaging disguising the parts’ identities in an effort by the Mikas to deceive DLA and its unwitting downstream purchasers."

Authorities say the fraud happened from at least March 2016 through April 2020.

During an audit of Monmouth Marine conducted in February 2020, Kenneth Mika falsely stated to auditors that Monmouth Marine had been authorized by certain representatives of the Defense Contract Management Agency to substitute parts under the contracts. Kenneth Mika repeated these false representations to FBI and Defense Criminal Investigation Service agents in July 2020, authorities said.

Each count of conspiracy to commit wire fraud and wire fraud is punishable by a maximum penalty of 20 years in prison and a maximum $250,000 fine. Each count of making false statements is punishable by a maximum penalty of five years in prison and a maximum $250,00 fine.