New York CEO Sentenced for Role in Unapproved Aircraft Parts Investigation in Connecticut
On December 10, 2015, Jeffrey Krantz, CEO and owner of Harry Krantz, LLC (Krantz LLC) of New York, New York, was sentenced in U.S. District Court, Hartford, Connecticut, to three years of probation, a $100,000 fine, and ordered not to be directly or indirectly involved in the buying or selling of electronic parts for a period of 2 years related to his role in the sale of unapproved aircraft parts. Previously, in July 2015, he pleaded guilty to wire fraud for supplying customers with falsely remarked microprocessor chips, many of which were used in U.S. military and commercial helicopters. As part of his guilty plea, Krantz surrendered control over Krantz LLC, and all beneficial and/or financial interest.
Krantz, LLC bought and sold, among other things, obsolete electronic parts for use by the U.S. military and commercial buyers. In 2005, Krantz entered into a business relationship with Jeffrey Warga, the president and owner of Rhode Island-based Bay Components, LLC, to sell military grade microprocessor chips to Bay Components, which would in turn sell them to a Connecticut company. Krantz knew that the Connecticut company wanted new and original chips. Between 2005 and 2008, Krantz supplied over a thousand chips to Bay Components, which, in turn sold them to the Connecticut company. Krantz knew that the chips originated from a parts supplier in China, and that there was a high probability that the chips were falsely remarked and not the original manufacturer’s. He also avoided engaging in common practices in the industry, including those which Krantz LLC routinely engaged in for other military parts, to avoid confirming that the chips were likely remarked.
The investigation revealed that many of the chips were used in the assembly of U.S. military and commercial helicopters. The chips, to date, have not been determined to be the root cause of any mechanical problems experienced by the helicopters.
We are conducting this investigation jointly with the Defense Criminal Investigative Service.