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Jul 02, 2023BUSINESSMAN CONVICTED OF DEFRAUDING GOVERNMENT
Aug 31, 2023The president of a Hampton defense contracting company was found guilty Monday in U.S. District Court of one count of defrauding the government of $17,781.
Frank S. Rosenberg, president of Aluf Industries Inc., pleaded guilty to submitting a false claim to Defense Contract Administration Services for a delivery of steel he never received. He will be sentenced Feb. 6 and could receive up to five years in prison and a $1 million fine.
The $17,781 was pumped into the financially strapped Aluf Industries to try to keep it afloat, said Rosenberg's attorney, Martin Thomas. He said the company is in Chapter 11 bankruptcy.
Assistant U.S. Attorney Alan Salsbury told U.S. Judge Robert G. Doumar that Aluf Industries had a contract with the Defense Department to build hydraulic cylinders for Navy submarines.
On Jan. 10, the company requested reimbursement for a shipment of raw steel. A few weeks later, Salsbury said, the government sent a specialist to verify the payment to Aluf Industries. The specialist received an inspection report allegedly showing the company had received a shipment of raw steel, as well as an invoice for the shipment.
However, the invoice actually estimated the cost of the shipment, which Aluf Industries was supposed to pay for up front. Salsbury said Rosenberg had the invoice doctored to make it look as if the steel had been received.
"The steel has never been received," he said. "It remains at the steel mill."
Rosenberg, who came to Hampton from the company's home base in New York, added little to the prosecutor's story except to quietly answer Doumar's questions.
Thomas, his attorney, said the company is still trying to fulfill its contract with the government.
Doumar allowed Rosenberg to remain free on personal recognizance and gave him extensive freedom to travel, as required by his job. But before he left, he gave him a small lecture: "Just taking money ostensibly for goods on hand you don't have, that's a problem."
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