Government Contracts Monitor
Diamonds May Be Forever But So Is A Felony Conviction
December 17, 2012
In United States v. Rabinowitz, No. 11-CR-230, Jerome Rabinowitz was indicted in the Southern District of Ohio, Eastern Division on multiple counts of mail fraud, wire fraud, money laundering, and false statements. Mr. Rabinowitz was the owner of J&W Technologies, LLC (“J&W”), a New York corporation and DOD contractor that sold and supplied parts to the DOD. The items at issue included a variety of electronic parts, including semiconductors, microcircuits, and transistors utilized in the Navy Nuclear Reactors Program, military aircraft, and strategic weapons systems on several submarines, all of which the indictment alleged to be “critical application items.” The case demonstrates the importance of strict adherence to the requirements of the Qualified Products List (“QPL”) and the serious consequences for failing to meet those requirements.
The indictment alleged that notwithstanding QPL requirements, and the fact that contractors were required to provide and maintain a Certificate of Conformance or proof that the goods came from the approved Qualified Manufacturers List, Mr. Rabinowitz either provided the DOD with fraudulent trace documents or failed to provide the required traceability at all. Mr. Rabinowitz also shipped the non-conforming parts to a packaging company in Ohio in order to repackage them so they could be supplied to the DOD as if they were conforming. The indictment alleged that in one instance, the subject parts -- 306 microcircuits -- were over 26 years old.
After a ten-day jury trial, Mr. Rabinowitz was convicted of 25 counts of mail fraud, 9 counts of wire fraud, 3 counts of money laundering, and two counts of making a false statement. He was sentenced to 4 years in prison, a $25,000 fine, restitution in the amount of $492,024.53, and forfeiture in the amount of $354,877.
The primary asset that was the subject of the forfeiture was a 5.29 carat Cartier diamond ring with a center diamond described as being “fancy intense yellow,” flanked by two trapezoid diamonds weighing an additional carat, all nestled in platinum with an 18k yellow gold setting. The Indictment alleged that Mr. Rabinowitz wired $225,000 from his American Express account to Cartier for the ring. Now, as the holidays are approaching, you may be able to get a nice deal on a very exquisite ring at a future auction by the United States Marshal Service.
Brian Stolarz is the attorney responsible for the content of this article.