Federal Indictment Charges Virginia Man with Wire Fraud in $658,866.92 Scheme Involving False Government Contracts

A federal grand jury in Maryland has returned an indictment charging Arthur Morgan, a 67-year-old man from Lorton, Virginia, with two counts of wire fraud charges in connection with federal contracts to provide helmets, body armor, and other items to military and other federal entities. According to the indictment, Morgan, the Chief Executive Officer of Surveillance Equipment Group Inc. (SEG) and its relevant division, SEG Armor, knowingly provided products manufactured in China, in violation of the Trade Agreements Act (TAA) and the contract.

Key Takeaways:

• Morgan allegedly falsified certifications that the products he offered for sale were from designated countries, specifically, Hong Kong and the United States, when in fact they were manufactured in China.
• The indictment alleges that between 2003 and 2019, SEG received multiple federal government orders under the contract, totaling approximately $658,866.92, for ballistic and other law enforcement/security equipment sourced from China.
• Morgan is accused of engaging in a scheme to defraud the U.S. government by providing false information to federal agencies, including the U.S. Navy, about the origin and production of the supplied products.
• The indictment alleges that Morgan received payments from the Defense Finance and Accounting Service for the U.S. Navy order, totaling $318,059.88.
• If convicted, Morgan faces a maximum sentence of 20 years in federal prison for each of two counts of wire fraud.
• The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur, along with several other law enforcement officials.

Statistics:

• The indictment alleges that between 2003 and 2019, SEG received multiple federal government orders under the contract, totaling approximately $658,866.92.
• Between September 15, 2014, and August 29, 2019, federal government agencies placed at least 11 orders for ballistic and other law enforcement/security equipment from SEG, which sourced products from China.
• Morgan allegedly received payments from the Defense Finance and Accounting Service for the U.S. Navy order, totaling $318,059.88.
• The indictment alleges that Morgan knowingly provided products manufactured in China, in violation of the TAA and the contract.

Sources:

• United States Attorney's Office for the District of Maryland
• "Federal Indictment Charges Virginia Man with Wire Fraud in $658,866.92 Scheme Involving False Government Contracts"