Owner of Rhode Island Electronics Parts Company Sentenced for Defrauding Customers
On January 21, 2016, Jeffrey Warga, of North Kingstown, Rhode Island, was sentenced in U.S. District Court, Hartford, Connecticut, to 3 years of probation, 80 hours of community service, and a $10,000 fine. He was also ordered not to sell components to the Government or aircraft manufacturers. The sentence is related to his role in supplying customers with falsely remarked microprocessor chips, many of which were used in U.S. Military and commercial helicopters. Warga previously pleaded guilty in December 2014 to wire fraud conspiracy.
According to court documents and statements made in court, Jeffrey Krantz was the CEO and an owner of Harry Krantz, LLC, a New York-based company that 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 Warga, the president and owner of the Rhode Island-based Bay Components, LLC. Krantz LLC sold military microprocessor chips to Bay Components who in turn sold them to a Connecticut company. Krantz and Warga knew that the Connecticut company wanted new and original chips, not falsely remarked chips. Between 2005 and 2008, more than 1,000 chips were sold to the Connecticut company. Warga and Krantz knew that the chips originated from a parts supplier in China, and that there was a high probability they were falsely remarked and not from the original manufacturer as represented by the markings on the chip.
The investigation revealed that many of the chips were used in the assembly of U.S. Military and commercial helicopters. The chips were examined and determined not to be the root cause of any mechanical problems experienced by the helicopters to date.
OIG is conducting this investigation with the Defense Criminal Investigative Service.