New Jersey Man Admits to Defrauding DOD, Agreeing to Rig Defense Contract Bids Following Joint Investigation

NEWARK, N.J. — A Homeland Security Investigations (HSI) Newark and Department of Defense (DOD) investigation resulted in a New Jersey man admitting to engaging in multiyear schemes to defraud the government.

Alan Aranowitz, 75, of Roseland, pleaded guilty to an information charging him with two counts of wire fraud conspiracy at the U.S. District Court for the District of New Jersey in Newark. He admitted to providing military equipment parts that were not authorized under the governing contracts and agreeing with another individual to rig bids for DOD contracts.

“Thanks to the joint efforts on this investigation, Aranowitz is being held accountable for perpetrating fraudulent schemes against the U.S. government,” said HSI Newark acting Special Agent in Charge William S. Walker. “Our successful collaboration with the Defense Criminal Investigative Service’s Northeast Field Office and the U.S. attorney’s office in this case brought this fraudster to justice, protecting our military’s supply chain.”

According to the investigation, from 2015 August 2018, Aranowitz conspired with others to defraud the DOD and one of its combat logistic support arms, the Defense Logistics Agency, by engaging in a pattern of unlawful product substitution. Aranowitz owned and operated Arlo Corporation, which entered into contracts with the DOD to supply replacement parts for the military, such as screws, nuts and bolts. Aranowitz conspired with the owner-operators of two companies to provide the DOD with counterfeit and non-conforming parts.

Aranowitz sometimes falsely represented that the parts would be suitable for military use because they had met certain specific requirements when in fact, he submitted such bids intending to provide unsuitable parts. He sometimes falsely represented that the parts would be “Exact Product,” meaning they derived from a particular manufacturer. He also sometimes knowingly and falsely represented that Arlo or one of the companies he conspired with would manufacture the parts. Aranowitz sometimes submitted bids to the DOD in one of the companies’ names with the owner-operator’s knowledge and approval.

By committing these acts, Aranowitz and his conspirators increased their own profits. The Defense Logistics Agency received numerous Product Quality Deficiency Reports from U.S. military end users reporting that a particular part Arlo supplied did not physically conform to the contract specifications.

As part of the plea, Aranowitz agreed to forfeit $684,168 in proceeds of the fraudulent scheme charged in count one and to pay $878,644 in restitution to the DOD.

According to the investigation, from 2017 through August 2018, Aranowitz conspired with the owner-operator of a company to defraud the DOD and Defense Logistics Agency by engaging in bid rigging with another DoD contractor. Arlo, like all DOD contractors, was required to certify that it had arrived at its bids independently and without consulting or colluding with any other offeror or competitor. On the contrary, Aranowitz regularly consulted with another DOD contractor regarding the bids that each was submitting.

The charges of wire fraud conspiracy each carry a statutory maximum of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29.

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