Defense contractor sentenced to 37 months in prison for fraud and obstruction

  • Published
  • By Air Force Office of Special Investigations Public Affairs Office
Kenneth Narzikul, 60, of Media, Pa., was sentenced Jan. 16, 2015 to 37 months in prison for committing major fraud against the United States, obstructing a federal audit, and making false claims to the government, in connection with defense contracts to manufacture components for military helicopters. U.S. District Court Judge L. Felipe Restrepo also ordered restitution in the amount of $1.2 million, a fine of $7,500, and three years of supervised release to follow the prison term. 

The case was investigated by the United States Air Force Office of Special Investigations (OSI), the United States Army Criminal Investigative Command (Army CID), and Defense Criminal Investigative Service (DCIS). It was prosecuted by Assistant United States Attorney Mary E. Crawley.

The defendant was president and 85 percent owner of NP Precision, Inc. (NP), a machine tool business located in Folcroft, Pa., which is now defunct. NP contracted with Department of Defense component agencies to produce critical hardware components used in military helicopters and other aircraft. 

At his guilty plea hearing, August 25, 2014, Narzikul admitted that he schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP under two contracts to produce drive shaft couplings for a U.S. Army helicopter Model CH-47, commonly known as the Chinook helicopter. 
Narzikul further admitted that he made false claims to the government so that NP could continue to receive progress payments on those contracts, when he knew that NP had not earned the progress payments. 

In addition, Narzikul admitted that he tried to cover up his fraud by lying to government auditors and submitting false documents to them, and directing employees at NP to do the same. Narzikul admitted further that he used the diverted progress payments to pay outstanding obligations on other contracts and pay other personal and business expenses for himself and his family.