April 22, 2008


I've already written plenty on Russians in York Region and their crime. Nothing that they do surprises me.

What does surprise me is how seldom they get CAUGHT. Why is that? Maybe something to do with the fact that, for instance, in this case Canada doesn't have it's own intel and defense apparatus that works?

Plenty more Russian corruption, money laundering and graft stories are sure to appear before this war ends. And I gotta say it, the longer the war goes on, the more of this kind of story you will see appearing in the news.

I wonder which political party played these guys for money.

Ontario executives charged with defrauding U.S. military

Two Toronto-area executives at the helm of an optical devices company face charges of fraud and conspiracy for allegedly seeking to defraud the U.S. military of up to $11-million on a contract for night-vision goggles destined for Iraq, the U.S. Department of Justice announced yesterday.

After a grand-jury indictment, Michael (Mendel) Beker, president and CEO of Newcon Optik Ltd., and Arie Prilik, the company's former vice-president, were charged with two counts of wire fraud and one count of conspiracy to commit wire fraud.

As well, Mr. Beker and Newcon Optik are charged with money laundering.

A spokesman at the Department of Defence was unable to say whether Newcon Optik is a supplier to the Canadian Forces.

Mr. Beker and Mr. Prilik were arrested without incident by York Regional Police on April 11 and April 18, respectively. Mr. Beker was released on $1.6-million bail, while Mr. Prilik remains in custody, a U.S. Justice spokeswoman said.

If convicted, each accused faces potential prison terms of up to 20 years and fines totalling hundreds of thousands of dollars.

The core of the accusation is that they sought to defraud the U.S. Army's Tank-Automotive and Armaments Command (TACOM), which equips and trains Iraq's fledgling army, by bribing a competitor to withdraw its bid for supplying a shipment of night-vision equipment.

A $50,000 down payment was made, the indictment alleges: "They then envisioned stepping in and supplying TACOM with night-vision goggles at a substantially inflated price."

Newcon Optik, which shares the same mailing address as Newcon International on Toronto's Sparks Avenue, was registered in Ontario in 2006 by Mr. Beker. Newcon International was incorporated in 1992 and bills itself as "one of the world's largest manufacturers of specialty optics outside USA."

Along with night-vision goggles, it also manufactures binoculars and monoculars, weapon scopes, laser rangefinders, speed detectors and thermal imagers.

Newcon's website says it supplies numerous law enforcement agencies and armies worldwide. It is currently ranked as an "official supplier" with the U.S. government's General Services Administration, which oversees the functioning of federal agencies, with a 10-year contract that expires in 2012.

The night vision equipment is manufactured in Russia, according to a description of the company carried by Canada's Department of Foreign Affairs and International Trade.

Although the two men appear to have addresses in both Toronto and the suburban community of Thornhill, north of Toronto, York police made the arrests because the request came through Interpol "and we maintain an Interpol co-ordinator position, we are one of the only municipal police services in Canada to do so," said Inspector Tom Carrique, who heads York's intelligence section.

A man who answered the telephone at Newcon Optik yesterday gave his name as Alex Beker and described himself as "a relative" of Michael Beker, and said Michael Beker would have no comment.

Mr. Prilik has not worked for Newcon Optik since last year, the man said, and a woman who answered the phone at Mr. Prilik's Thornhill home declined to comment.

Further inquiries were referred to Optik representative Alex Rudiy, who said he did not know whether Newcon has supplied equipment to either the Canadian military or Canadian government. Mr. Rudiy declined all comment on the criminal charges.

The contract for the goggles was one component of a $250-million shipment of assorted military goods for the Iraqi army that was awarded to San Francisco-based American Technologies Network Inc.

The indictment unsealed yesterday by the Department of Justice's antitrust division was returned by a grand jury in December and alleges that over a six-month period beginning in August, 2005, Mr. Beker and Mr. Prilik tried to steer the ATN deal off the rails, initially by feeding TACOM "misleading pretenses, representations, omissions and promises."

Then, the indictment states, the pair contacted ATN and offered to pay the company an initial $50,000 - money that would be wired through the Bank of Nova Scotia and disguised as "a loan" - to abort the deal.

After that, Mr. Prilik allegedly informed TACOM that ATN was unable to go through with the deal, but that Newcon could fill the shortfall "at a substantially higher price."

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