Owner of Defense Contracting Firm Sentenced to 42 Months in Prison for Defrauding U.S. Department of Defense and Conspiring to Violate Arms Export Control Act

From the U.S. Attorney’s Office, District of New Jersey:

CAMDEN, N.J. – A Camden County, New Jersey, man was sentenced today to 42 months in prison for defrauding the U.S. Department of Defense (DoD) by providing military equipment parts that were not what he had contracted to provide and illegally accessing technical information as a non-United States citizen, U.S. Attorney Craig Carpenito announced.

Oben Cabalceta, 53, of Atco, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of wire fraud and one count of conspiracy to violate the Arms Export Control Act. Judge Hillman imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

Cabalceta was the owner of two companies: Owen’s Fasteners Inc. (Owen’s) and United Manufacturer LLC (United), two manufacturing companies in West Berlin, New Jersey.

Cabalceta admitted that between August 2004 and March 2016, Owen’s and United obtained contracts with the DoD by falsely claiming that the military parts it contracted to provide would be the exact product provided by authorized manufacturers. The DoD contracts specified that the military parts were critical application items for military equipment, including aircraft. Contrary to the contract, Cabalceta either used his companies to contract with local manufacturers to supply non-conforming parts or made the parts himself at a significantly reduced cost. The non-conforming parts were shipped from New Jersey to various DoD locations around the country. DoD paid Owen’s and United $1,890,939 for those parts.

Cabalceta also admitted that he was a native and citizen of the Republic of Costa Rica who overstayed his tourist visa in 2000 and was not a United States citizen or lawfully in the United States. To further his fraud on the DoD, in August 2005 and November 2010, Cabalceta caused his brother-in-law, Roger Sobrado, to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s. In 2015, Cabalceta caused an accomplice to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s.

Cabalceta acknowledged that access to the controlled drawings and technical data was limited to citizens of the United States and those lawfully in the United States. He admitted that on July 28, 2011, and at various times between January 2013 and November 2015, while unlawfully in the United States, he accessed or downloaded drawings that were sensitive in nature that required special access.

In addition to the prison term, Judge Hillman sentenced Cabalceta to two years of supervised release and ordered to pay $1.8 million in restitution. He will also be deported to Costa Rica upon completion of his sentence.

On Oct. 11, 2018, Sobrado pleaded guilty before Judge Hillman to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. He was sentenced Sept. 4, 2019, to three years in prison.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the U.S. Attorney’s Office; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge John F. Grasso for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

CAMDEN, N.J. – A Camden County, New Jersey, man was sentenced today to 42 months in prison for defrauding the U.S. Department of Defense (DoD) by providing military equipment parts that were not what he had contracted to provide and illegally accessing technical information as a non-United States citizen, U.S. Attorney Craig Carpenito announced.

Oben Cabalceta, 53, of Atco, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of wire fraud and one count of conspiracy to violate the Arms Export Control Act. Judge Hillman imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

Cabalceta was the owner of two companies: Owen’s Fasteners Inc. (Owen’s) and United Manufacturer LLC (United), two manufacturing companies in West Berlin, New Jersey.

Cabalceta admitted that between August 2004 and March 2016, Owen’s and United obtained contracts with the DoD by falsely claiming that the military parts it contracted to provide would be the exact product provided by authorized manufacturers. The DoD contracts specified that the military parts were critical application items for military equipment, including aircraft. Contrary to the contract, Cabalceta either used his companies to contract with local manufacturers to supply non-conforming parts or made the parts himself at a significantly reduced cost. The non-conforming parts were shipped from New Jersey to various DoD locations around the country. DoD paid Owen’s and United $1,890,939 for those parts.

Cabalceta also admitted that he was a native and citizen of the Republic of Costa Rica who overstayed his tourist visa in 2000 and was not a United States citizen or lawfully in the United States. To further his fraud on the DoD, in August 2005 and November 2010, Cabalceta caused his brother-in-law, Roger Sobrado, to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s. In 2015, Cabalceta caused an accomplice to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s.

Cabalceta acknowledged that access to the controlled drawings and technical data was limited to citizens of the United States and those lawfully in the United States. He admitted that on July 28, 2011, and at various times between January 2013 and November 2015, while unlawfully in the United States, he accessed or downloaded drawings that were sensitive in nature that required special access.

In addition to the prison term, Judge Hillman sentenced Cabalceta to two years of supervised release and ordered to pay $1.8 million in restitution. He will also be deported to Costa Rica upon completion of his sentence.

On Oct. 11, 2018, Sobrado pleaded guilty before Judge Hillman to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. He was sentenced Sept. 4, 2019, to three years in prison.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the U.S. Attorney’s Office; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge John F. Grasso for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.