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Missouri-Based Defense Department Contractor Admits Fraud

U.S. Attorney's Office    
Eastern District of Missouri
February 7, 2024


ST. LOUIS – A Defense Department contractor from St. Charles County, Missouri on Wednesday admitted illegally obtaining parts for the military overseas, undercutting domestic suppliers.

David Murar, 73, waived his right to indictment by a grand jury and pleaded guilty in U.S. District Court in St. Louis to one felony count of conspiracy to commit wire fraud. Murar admitted that from roughly April through October of 2022, he bid on and received at least nine U.S. government contracts by way of fraudulent misrepresentations, including that he would provide parts from domestic sources. Murar actually provided parts from China and other foreign countries. By doing so, Murar was able to underbid domestic suppliers. Murar broke the law by providing “military critical technical data,” which was restricted and protected information, to foreign individuals and/or entities. Murar also admitted to fraudulently using his wife’s name to gain a competitive advantage for one of his companies as a woman-owned small business, when he was really the actual owner and operator.

Murar fraudulently obtained contracts worth at least $333,465 for parts including nuts, bolts, washers, sleeves, and tools.

“Some of the parts that Murar’s companies supplied were designated as ‘critical,’ meaning they are essential to weapon system performance or the preservation of life or safety of personnel,” said U.S. Attorney Sayler A. Fleming. “Murar and his companies have already been suspended from government contracting and he has now pleaded guilty to a felony conspiracy charge. This case should serve as a stern warning to those whose actions could endanger members of the armed forces or who supply confidential data on military equipment to overseas entities.”

"The safety and readiness of the warfighter is the top priority of the Department of Defense Office of Inspector General's Defense Criminal Investigative Service (DCIS)," said Acting Special Agent-in-Charge Gregory P. Shilling of the DCIS Southwest Field Office. "We remain committed to safeguarding the integrity of the DoD supply chain, and we will pursue any company that supplies substandard products. Along with our partners, we are likewise committed to protecting sensitive technology and seek to hold those accountable who subvert export controls, exposing technology to adversaries."

“Knowingly removing export control markings and illegally transmitting export-controlled military technology data overseas to produce substandard components for vital DOD contracts, while purporting the same to be made in America, puts U.S. warfighters at risk and undermines our national security. BIS is committed to vigorously investigating illicit technology transfers and holding violators accountable,” said Aaron Tambrini, Special Agent in Charge of the Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office.

“We will work with law enforcement partners to aggressively pursue cases involving anyone who provides false information in government databases to fraudulently win government contracts,” said Special Agent in Charge Jeffrey Ryan of the Midwest Investigations Division of the U.S. General Services Administration Office of Inspector General. “Legitimate woman-owned businesses deserve a level playing field when competing for contract opportunities.”

“Product substitution is a serious threat to Air Force assets, and negatively impacts aircraft safety and readiness,” said Special Agent in Charge William A. Rouse, Air Force Office of Special Investigations, Procurement Fraud Detachment 4, Wright-Patterson Air Force Base.

Murar owned three businesses: Midwest Metals, St. Louis Loft Metals, and Florence Metals.

Murar signed agreements not to provide access to military critical technical 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. But Murar admitted scheming to obtain parts from China, Hong Kong and other countries, and sent requests for quotes, including diagrams of necessary parts, to suppliers in those countries. He removed document distribution statements, destruction notices and export control and arms export control warnings from those documents before sending them, his plea agreement says.

Murar wired funds to obtain the parts, which were then manufactured and sent to his home in St. Charles. He discarded their original packaging and repackaged them to conceal their origin overseas, his plea says.

Murar is scheduled to be sentenced May 7. The charge carries a penalty of up to 20 years in prison, a fine of up to $250,000, or both prison and a fine.

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 and the U.S. Army Criminal Investigation Division, Fraud Field Office investigated the case. Assistant U.S. Attorneys Matthew Drake and Cort VanOstran are prosecuting the case.


Source: U.S. Attorney's Office press release