Defense contractors charged and sentenced for Turkey-based defense contracting fraud scheme

ATLANTA – Multiple defense contractors have been charged and/or sentenced for participating in a multi-million-dollar defense contracting fraud scheme based out of Turkey.

“Our nation relies on the defense contracting process to carry out important duties,” said U.S. Attorney Byung J. (“BJay”) Pak.  “When contractors circumvent the rules they agreed to follow, they jeopardize the lives of those servicemen they signed up to serve.” 

“This conspiracy to steal military technology was not only fraudulent, it endangered lives,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is dedicated to working with our federal partners to seek justice for anyone who would subvert the defense contracting process, but more importantly, threaten the safety of the men and women in the U.S. military.”

“The Bureau of Industry and Security, Office of Export Enforcement will aggressively pursue violators of U.S. export controls,” said Acting Special Agent in Charge Alan Berkowitz. “Working closely with our law enforcement partners, our joint investigation disrupted an ongoing conspiracy to divert U.S. military technology and protect our warfighters.”        

“Compromising the Department of Defense contracting process threatens the safety of our warfighters and the strength of our national defense,” said Special Agent in Charge Cynthia A. Bruce, DCIS Southeast Field Office.  “We will aggressively pursue those who abuse the contracting system and hold them accountable for their criminal schemes.” 

According to U.S. Attorney Pak, the charges, and other information presented in court: Murat Gonenir, along with at least two other defendants, participated in an extensive Turkey-based scheme to defraud the U.S. military.  The defendants applied for and obtained access to a sensitive Department of Defense (“DOD”) contracting database housing some of the military’s most sensitive schematics, which is only lawfully accessible by U.S. and Canadian citizens or permanent residents. 

Once the defendants obtained access to the database, they downloaded thousands of sensitive schematics for parts such as a handle casting for an 105 millimeter tray assembly for an AC-130H Gunship, and catapult/arresting gear for Nimitz and Forrestal Class aircraft carriers. Gonenir obtained access to this sensitive database by falsely claiming he was a U.S. or Canadian citizen or permanent resident.    

The defendants offered bids on numerous defense contracts for these sensitive schematics that required them to produce these parts in the United States. Instead, they produced these parts in Gonenir’s manufacturing plants in Turkey and then falsely claimed to the DOD that the parts had been lawfully produced in the United States.  The DOD paid millions of dollars to the various defense contractors who took part in this scheme as a result of these false statements.

DOD testing revealed that various parts produced at Gonenir’s plants were of such inferior design that they could have resulted in serious injury or death to U.S. military personnel if the parts had been put into production. Several members of the conspiracy were told that DOD testing had determined that at least one of the parts had failed inspection.  However, the defendants kept producing parts in Turkey and falsely claiming the parts were produced in the United States. 

The defendants and their sentences are as follows:

• Murat Gonenir, 59, of Cankaya, Turkey was sentenced to three years, five months in prison and three years of supervised release, and he was ordered to pay $1,487,950.77 in restitution and a special assessment of $100.
• Batur Ustol, 61, of Atlanta, Georgia, was sentenced to two years and six months in prison and three years of supervised release for his role in the conspiracy, and he was ordered to pay $100,000 in restitution and a special assessment of $100. In a related matter.
• Suleyman Sevket Bayraktar, 43, of Fountain Valley, California, was sentenced to six months in prison, six months of home confinement, and three years of supervised release, and he was ordered to pay $161,925 in restitution and a special assessment of $100.  

This case was investigated by the Department of Commerce – Bureau of Industry & Security, Federal Bureau of Investigation, and the Department of Defense Criminal Investigative Service.

Assistant U.S. Attorney Thomas J. Krepp and Nathan P. Kitchens, Deputy Chief of the Cyber and Intellectual Property Section prosecuted the cases.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.