"Close to treason."
That's how Assistant U.S. Attorney J. Michael Marous described the actions of Jerome Rabinowitz, who was sentenced yesterday in federal court for selling the Navy bad parts for nuclear equipment.
U.S. District Judge Gregory L. Frost ordered Rabinowitz to prison for four years after excoriating him for "serious crimes against our government that put our fighting men and women in danger" and calling his fraud "one of the most-egregious cases I've ever had."
A jury found Rabinowitz, 69, of Great Neck, N.Y., guilty in August of 39 counts of wire fraud, false claims, money laundering and mail fraud. The case was prosecuted in Columbus because it's home to the Defense Logistics Agency Land and Maritime, formerly known as the Defense Supply Center Columbus, which procures parts for the military.
Rabinowitz was indicted more than a year ago and charged with selling the Navy thousands of nonconforming electronic parts from 2006 through 2009 for its aircraft, aircraft carriers and strategic weapons systems on submarines. Rather than providing modern parts that met government specifications, Rabinowitz supplied surplus parts, some that were decades old, and was paid more than $300,000.
During the trial, government prosecutors presented evidence that Rabinowitz, who also did business under the name Jerry Roth, provided the Department of Defense with false documents about the manufacture of the parts.
The faulty parts were identified during regular checks of equipment, Marous said. The military then spent $137,147 locating and testing parts supplied by Rabinowitz and his business, J&W Technologies LLC.
Most of the parts were classified as "critical application items," Navy Cmdr. Kevin Cheshure testified during yesterday's hearing. That means the parts are critical for the operation of equipment, and their failure "could lead to injury, if not death," of servicemembers, Cheshure said.
Thomas Kevin Goad, a quality-assurance specialist for Defense Logistics, testified that the parts had been used on the USS Ronald Reagan aircraft carrier, B-52 bombers, F/A-18 aircraft, KC-135 refueling aircraft, C-130 aircraft and F-16 aircraft, among others.
Aaron M. Goldsmith, Rabinowitz's attorney, argued for a lesser sentence, saying that no evidence was presented that the parts Rabinowitz sold to the military caused "something tantamount to treason." Goldsmith said Rabinowitz has high blood pressure and other health problems that can't be adequately treated in prison.
Asked by Frost if he wanted to say anything, Rabinowitz said he was not capable of commenting because of his health. He did say, however, that he plans to appeal.
Marous said Rabinowitz is a millionaire who ran a similar scam in 1990.
"The only reason we're not asking for 10 years (in prison) is his age and his health," he said.
Frost ordered Rabinowitz to pay a $25,000 fine and $492,025 in restitution and to forfeit $354,878 in cash or property as well as a 5.29-carat diamond ring, worth about $400,000, that Rabinowitz bought with some of the fraud proceeds.
Marous said several other similar federal cases are being heard in Columbus in the next few months.