October 25, 2022. The United States Department of Justice announced multiple civil settlements and criminal convictions in connection with a conspiracy to manufacture and distribute counterfeit military apparel. According to the press release, three defendants were responsible for orchestrating the counterfeiting and sale to the military of $20 million in uniforms and gear. No whistleblowers were identified in this procurement fraud case. Whistleblowers reporting counterfeit goods being sold to the U.S. government could have earned 15-25% of the $2 million civil fraud settlements. According to court documents, at one point during the scheme a trademark holder discovered and complained about counterfeits of their jacket being sold to Air Force Base Supply Centers.
According to the allegations, the co-conspirators meticulously plotted how to manufacture and import back into the U.S. various items of clothing, apparel, and gear. Ramin Kohanbash sent original items to Bernard Klein, who then coordinated with manufacturers in China and Pakistan to produce counterfeits. According to court documents, the co-conspirators anticipated customs issues and “instructed the manufacturers on how to fold and package the counterfeit goods, and to affix removable “Made in China” stickers to avoid problems when shipments were inspected by U.S. Customs.” The counterfeit items comprised several types of gear made with trademarked materials, which the U.S. government purchases to protect soldiers in the line of duty. Kohanbash, who pled guilty to conspiracy to commit wire fraud and trafficking in counterfeit goods, admitted to counterfeiting 200 parkas worn by U.S. Air Force personnel in Afghanistan. The original parkas were made with a fabric that made it more difficult to detect the wearer with night-vision goggles. The third defendant, Terry Roe, was a former manager at a North Dakota supplier which purchased the counterfeit goods from Klein and Kohanbash and distributed them to military purchasers.
For conspiracy to commit wire fraud and trafficking in counterfeit goods, Kohanbash was sentenced to 40 months in federal prison and must pay restitution to the companies whose goods he copied. Klein was sentenced to 18 months in federal prison plus three years of supervised release and ordered to pay a $15,000 fine and $400,000 in restitution. His civil settlement amounted to $348,000 for violating the False Claims Act. Roe was sentenced to 24 months in federal prison. Additionally, Kohanbash must forfeit the $20 million he made from selling counterfeit uniforms to the government.
The Special Agent in Charge of the Defense Criminal Investigative Service (DCIS) remarked about the case, “Supplying counterfeit products to the DoD endangers the lives of American service members and betrays the public’s trust.” The original purpose of the False Claims Act was to redress and deter the sale of defective products to the Union army; this counterfeit scheme is a modern-day variation on the theme. The U.S. Attorney summed it up, “American servicemen and women risk their lives every day in defense of the nation. But the risks they face should never come from the uniforms they wear, and the equipment they carry.” Whistleblowers who report procurement fraud play a vital role in preserving national security.
If you would like to report government contract fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.