Clifton firm admits weapons scam
A Clifton defense contractor admitted Tuesday that it violated federal law by outsourcing the manufacture of rifle and machine-gun components to China, where the parts could be produced for less money, U.S. Attorney Paul Fishman said.
Suneeta Shreemal, the interim president of Swiss Technology Inc., pleaded guilty on the company’s behalf in federal court in Newark to conspiring with an unidentified Chinese company, and agreed to pay $1,148,051.80 in restitution to the Department of Defense.
From August 2004 through June 2009, the company had contracts with the Pentagon to manufacture parts for rifles and machine guns for use in military operations, the government said.
But rather than manufacture the parts, Swiss Tech exported Defense Department drawings, specifications and sample parts to the Chinese company without obtaining a license from the State Department.
The Chinese company could have produced the items, including parts to be used with M4 and M16 rifles and M249 machine guns, at a much cheaper price per unit than it would have cost to manufacture them in the United States, the government said.
The weapons components are designated as “defense articles” on a United States Munitions List and are strictly controlled for export from the United States under specific State Department regulations.
“We simply can’t risk that companies trying to manufacture military equipment on the cheap will expose our troops to more danger than they already face,” Fishman said.
As part of its plea agreement, Swiss Tech admitted that it entered into the agreement with the Chinese company for its own financial benefit, and that it hid its activities from the U.S. government.
The conspiracy cost the Defense Department more than $1 million, the government said.
Swiss Tech employed 40 people at one time, but that number has dwindled to “under 10 employees,” according to the company’s attorney, Michael S. Weinstein. Weinstein, of Hackensack, described Tuesday’s proceedings as a “corporate plea,” and noted that no company executives were charged.
“There is a real question of the viability of the business in the future,” Weinstein said. “The entering of this plea with these types of charges cast a great shadow over the viability of the company.”
The investigation, which involved the Justice Department’s National Security Division and the Air Force Office of Special Investigations, is continuing.
Sentencing is scheduled for Nov. 15 before U. S. District Judge Jose L. Linares.