Date: December 19, 2019
By: Justin Rohrlich
A military contractor sold hundreds of thousands of dollars worth of Chinese ballistic vests, helmets, and riot gear to the US government while falsely claiming they were made in America. That’s according to a newly-unsealed criminal complaint obtained by Quartz.
On Tuesday, federal agents arrested Arthur Morgan, the founder and CEO of Virginia-based Surveillance Equipment Group (SEG Inc.), on charges of wire fraud. Investigators say the company’s president, Samuel Jian Chen, also appeared to be involved in the alleged fraud.
SEG has been supplying the federal government with law enforcement and security equipment since 2003. On at least 10 occasions, prosecutors say, Morgan submitted sworn declarations that the products he sold the US government were made in the United States or another authorized country, which would specifically exclude China.
The case comes just six weeks after the federal government accused a New York tech firm of fraudulently providing Chinese-made night vision devices and body cameras to the US military that it similarly claimed were manufactured in the United States. And in September, an 82-year-old arms dealer was arrested for selling “blatantly defective replacement parts for US military weapon systems” to the Pentagon over the course of two decades. A number of those components were reportedly sourced from China as well.
The danger in sourcing equipment from China and elsewhere is that unauthorized, cut-rate items sold to the US government may not meet established quality standards, thus putting US and allied personnel at unnecessary risk. This sort of case is “a far more common phenomenon than we generally acknowledge,” Cedric Leighton, a former US Air Force colonel who now works as a private sector risk consultant, told Quartz. [FULL STORY]