24 February 2005 – LAWFUEL – The Law News Network – A Canadian business man who owns an Orange County, California aircraft parts brokerage company was convicted by a federal jury sitting in Santa Ana, California on two felony counts arising from his sale of unapproved aircraft parts to the U.S. military. Michael Joseph Murphy, 34, was found guilty yesterday afternoon on both counts of the indictment which charged him with making a false claim to the United States, and submitting a false statement to the Department of Defense.
The contract at issue in the case called for Primetech, Murphy’s business located in Huntington Beach, to deliver vane actuation arms to the United States Air Force. The vane arms are used by the Air Force in its C-5 transport plane. The contract required that the parts come from the original manufacturer, General Electric, or from two other previously certified and approved sources. Under the contract, Primetech would receive $99,560.
At trial, the evidence showed that instead of providing the specified parts, Murphy provided parts that were not only from an unapproved source, but had previously been rejected by the U.S. Air Force. While the contract required that the parts be inspected by a government representative, Murphy shipped the parts before any inspection could be conducted. After shipping the parts, Murphy billed the government approximately $100,000.
When the Department of Defense contacted Murphy to advise him that the parts had to be inspected, and a form signed by a government inspector, the evidence established that Murphy signed the form himself, and returned it to the government. Primetech was ultimately paid $99,560 on the contract, and has not returned the money. A vast majority of the unapproved parts have been quarantined.
Murphy remains free on a $250,000 bond. His sentencing is scheduled for May 23, 2005. Murphy faces a statutory maximum penalty of 10 years in federal prison and fines of up to $500,000.
This case is the result of an investigation by the Defense Criminal Investigative Service and the Air Force Office of Special Investigations.
CONTACT: Assistant United States Attorney Tom McConville