Essex County Man Pleads Guilty to Defrauding Department of Defense and Bid Rigging

Roseland resident pleads guilty to multiyear schemes involving counterfeit parts and bid rigging for U.S. Department of Defense contracts.

NEWARK, N.J. – Alan Aranowitz, 75, of Roseland, New Jersey, admitted today in Newark federal court to engaging in schemes to defraud the U.S. Department of Defense (DoD) by providing unauthorized military equipment parts and conspiring to rig bids for DoD contracts, announced U.S. Attorney Philip R. Sellinger.

Aranowitz pleaded guilty before U.S. District Judge Julien X. Neals to two counts of wire fraud conspiracy. These charges stem from his actions from 2015 to 2018, during which he conspired with others to supply counterfeit and non-conforming parts to the DoD and coordinate bid prices with another contractor.

Fraudulent Schemes and Bid Rigging

Count One: Between 2015 and August 2018, Aranowitz, owner and operator of Arlo Corporation, conspired with others to provide counterfeit and non-conforming parts, such as screws, nuts, and bolts, to the DoD. He falsely represented that these parts met military specifications (MIL-SPEC) and were from specified manufacturers, while knowing they did not. This unlawful product substitution led to numerous Product Quality Deficiency Reports from U.S. military end users. As part of his plea, Aranowitz agreed to forfeit $684,168 in fraudulent proceeds and pay $878,644 in restitution to the DoD.

Count Two: From 2017 to August 2018, Aranowitz conspired with another DoD contractor to rig bids, violating the requirement for independent and non-collusive bid submissions. This conspiracy allowed them to coordinate bid prices to their advantage.

Legal Consequences and Investigation

Each charge of wire fraud conspiracy carries a maximum penalty of 20 years in prison and a $250,000 fine, potentially running consecutively. Sentencing is scheduled for October 29, 2024.

The investigation was conducted by special agents from the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, and Homeland Security Investigations Newark. Assistant U.S. Attorney Elisa T. Wiygul of the Criminal Division in Camden is representing the government.

This case underscores the seriousness of fraud and bid rigging within defense contracting, highlighting ongoing efforts to maintain the integrity of military procurement processes.