Ewing man, Jackson couple charged with defrauding U.S. Department of Defense

Two Monmouth County residents and a Ewing resident were indicted Thursday for their role in a years-long scheme to defraud the U.S. Department of Defense by providing military equipment parts that were not authorized under their contracts with the government, U.S. Attorney Philip Sellinger said.

Linda Mika, 70, and Paul Mika, 74, of Jackson, and Kenneth Mika, 50, of Ewing, have been charged by indictment 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.

According to documents filed in this case, from March 2016 through April 2020 the Mikas conspired with each other and others to defraud the Department of Defense and one of its combat logistic support arms, the Defense Logistics Agency, by engaging in a pattern of unlawful product substitution. Paul Mika is the founder and owner of Monmouth Marine Engines Inc., a maritime equipment and servicing facility that supplied replacement hardware to the Department of Defense’s military branches. Linda Mika, Paul Mika’s wife, and Kenneth Mika, Paul and Linda Mika’s son, were both employees of Monmouth Marine.

The Mikas allegedly obtained contracts with the Department of Defense by falsely claiming that the military parts they were contracted to provide would be exact products furnished by authorized manufacturers or suppliers. Once awarded the contracts, the Mikas allegedly sourced non-conforming substitute parts at a significantly reduced cost to fill the contracts in order to maximize their profit margin while suppressing fair competition in the bidding of federal contracts. Upon receipt by Monmouth Marine, the non-conforming parts were then shipped in packaging that disguised the parts’ identities in an effort by the Mikas to deceive the Defense Logistics Agency and its unwitting downstream purchasers.

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

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.