Missouri-Based Defense Department Contractor Sentenced for Fraud

ST. LOUIS - U.S. District Judge Henry E. Autrey on Tuesday sentenced a former Defense Department contractor from St. Charles County, Missouri to five years of probation and fined him $50,000 for illegally obtaining parts for the military overseas.

David Murar, 73, has already repaid $166,710.

Murar undercut domestic suppliers by obtaining parts from China and other foreign countries. He violated the law by providing diagrams of necessary parts and other "military critical technical data," which was restricted and protected information, to foreign individuals and/or entities to obtain those parts. He did so despite signing agreements not to provide access to that data to anyone other than his employees or other eligible persons and comply with U.S. export control laws and regulations. He also agreed to comply with laws and other restrictions requiring certain items purchased by the Defense Department to be domestically sourced.

The parts were sent to his home. Murar then discarded their original packaging and repackaged them to conceal their origin overseas, his plea says.

Murar also fraudulently used his wife's name to gain a competitive advantage for one of his companies by claiming it was a woman-owned small business, when he was really the actual owner and operator.

From roughly April through October of 2022, Murar bid on and received at least nine U.S. government contracts by way of fraudulent misrepresentations. Murar fraudulently obtained contracts worth at least $333,465 for parts including nuts, bolts, washers, sleeves, and tools. Murar owned three businesses: Midwest Metals, St. Louis Loft Metals, and Florence Metals.

In a statement read to the court, the Defense Logistics Agency said it must now obtain replacements from responsible contractors while the military services wait for parts to support their weapon systems. "It is, of course, always possible that the non-conforming parts make their way into weapon systems before DLA can identify them, which may affect safety and military readiness," the statement said. The agency said it does "not believe there is a way to quantify the harm, but the impacts to national security are nonetheless tangible and real."

Assistant U.S. Attorney Cort VanOstran said in court that Murar's crime "risked potential for danger to the United States Armed Forces."

Murar pleaded guilty in February in U.S. District Court in St. Louis to one felony count of conspiracy to commit wire fraud. He had already been suspended from government contracting.

"Today's outcome demonstrates the commitment of the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), and our partners, to safeguard the DoD supply chain and ensure the safety of the warfighter," stated Acting Special Agent in Charge Ryan Settle, DCIS Southwest Field Office. "DCIS will continue to pursue companies who supply substandard products, circumvent export control laws, and fraudulently represent products as U.S. made. These violations put the warfighter at risk and seriously undermine military readiness and security."

The General Services Administration Office of Inspector General, the Department of Defense Office of Inspector General's Defense Criminal Investigative Service, the Department of Commerce's Office of Export Enforcement, the U.S. Air Force Office of Special Investigations, the U.S. Army Criminal Investigation Division, Fraud Field Office and Homeland Security Investigations investigated the case. Assistant U.S. Attorneys Matthew Drake and Cort VanOstran prosecuted the case.