4001. Case Study: Fake Defense Contractor Indicted for Exporting Military Related Drawings to Turkey
- Author:
- Hanah Joudi and Andrea Stricker
- Publication Date:
- 09-2018
- Content Type:
- Case Study
- Institution:
- Institute for Science and International Security
- Abstract:
- On September 5, 2018, the owner of a New Jersey defense contracting firm, Ferdi Murat Gul, was indicted by a grand jury in the United States District Court in the District of New Jersey on charges of wire fraud, conspiracy to commit wire fraud, violating the Arms Export Control Act (AECA), and conspiracy to violate the AECA. Gul, a Turkish citizen, is the principal owner, chief executive officer, and general manager of two U.S.-based businesses: an alleged defense contracting company, Bright Machinery Manufacturing Group Inc. (BMM), and an alleged manufacturing company, FMG Machinery Group (FMG), and also holds ownership interests in a manufacturing company in Turkey, HFMG Insaat (HFMG). From October 2010 to June 2015, BMM was awarded approximately $7 million in 346 U.S. Department of Defense (DOD) Defense Logistics Agency (DLA) contracts to manufacture military parts in the United States and provide them to DOD customers, such as the Army, Navy, Air Force, Marine Corps, and Coast Guard. But according to the indictment, in reality, BMM was a front company set up with the purpose of defrauding the United States. The parts it manufactured included those “for torpedoes for the U.S. Navy, bomb ejector racks and armament utilized in U.S. Air Force aircraft, and firearms and mine clearance systems used by U.S. military personnel abroad.” Allegedly, Gul and two unnamed, un-indicted co-conspirators falsely claimed that BMM manufactured these parts in the United States. However, the indictment alleges that BMM illegally exported technical military drawings to manufacture the parts in Turkey, and then sold the parts – some of which had “design flaws and non-conformities and were unusable” – to U.S. customers.
- Topic:
- Crime, Illegal Trade, and Military Contractors
- Political Geography:
- Turkey, Middle East, North America, and United States of America