May 30, 2019
Two Brokers Sentenced for Scheme To Sell Scrapped Aircraft Parts
On May 30, 2019, Carmine Coviello, former owner of Shelby Enterprises, an aircraft parts broker, was sentenced in U.S. District Court, District of New Jersey, to 5 years’ probation, restitution of $4,186,689, and a $100 special court assessment.
A day earlier, on May 29, Gideon Vaisman, owner and president of Tara Technology Corp., was sentenced in the same court to 5 years’ probation, a $35,000 fine, a $185,541.58 tax penalty/repayment, 80 hours of community service, and a $125 special court assessment. The New Jersey-based Tara Technology Corp is also an aircraft parts broker.
Coviello previously pleaded guilty to a one-count information that charged him with conspiring to commit wire fraud. He admitted that, from April 2005 through August 2009, he used his company to purchase used blades and vanes for jet engines from scrap metal dealers. In violation of Federal Aviation Administration (FAA) regulations, he had the jet engine parts “grit blasted” and “blended” at a metal shop to conceal that they had been scrapped and deemed non-airworthy by FAA-certificated repair stations. Coviello then used Shelby Enterprises to conduct sham sales of the illegally repaired blades and vanes to a company called Tara Aviation located in Guernsey, England. In fact, Tara Aviation was an “alter ego” of Tara Technology Corp., Vaisman’s company, where Coviello was the general sales manager. The sole purpose of these sales was to generate the fraudulent “trace” paperwork they needed to sell the parts. The sales occurred only on paper, and the parts never changed hands.
Vaisman previously pleaded guilty to a superseding information charging him with false material certifications and false personal income tax filings. He acknowledged that in 2009 he had created a falsified FAA Part 145 (Aircraft Repair Station) Material Certification and submitted it to the Agency. He also underreported approximately $67,000 in earned income to the Internal Revenue Service (IRS) for calendar year 2006.
DOT-OIG conducted this investigation with the IRS–Criminal Investigation Division, assisted by the FAA Flight Standards District Office in Saddle Brook, New Jersey.