James Cai, CEO of Passaic-based Toner Connect LLC, has pleaded guilty to making false statements to the U.S. Army, concealing the foreign origin of forklifts, and violating the Buy American Act.
Passaic, New Jersey - In a startling revelation that unfolded in Trenton federal court, James Cai, 33, of Hackensack, NJ, and CEO of Toner Connect LLC, admitted to falsifying information on forklifts provided to the U.S. Army. This fraudulent act aimed to disguise forklifts purchased from China as U.S.-manufactured, breaching the Buy American Act requirements.
The case, presided over by U.S. District Judge Robert A. Kirsch, highlights a severe lapse in regulatory compliance by a local New Jersey company. Between September 2018 and January 2019, Cai's company secured contracts to supply forklifts to various Army installations. These contracts mandated compliance with the Buy American Act, necessitating that the forklifts be primarily U.S.-made.
However, in a cost-cutting move, Cai sourced two FD150 diesel forklifts from Shanghai, China, for a contract worth $247,000 at Fort Cavazos, Texas. To mask their true origin, Cai affixed plates to the forklifts falsely declaring them as assembled in the USA by Millennial Enterprise LLC, Newark, NJ.
The deception came to light when Fort Cavazos personnel faced operational issues with the forklifts, which couldn't be rectified due to hidden details about their make and model. This discovery prompted an investigation by U.S. Army Criminal Investigation Division and the U.S. Department of Defense, leading to Cai's guilty plea.
Cai's action not only raises serious questions about the integrity of defense procurement processes but also underscores the importance of adhering to federal regulations designed to promote domestic manufacturing. The guilty plea, carrying a maximum sentence of five years and a $250,000 fine, is set for sentencing on April 11, 2024.
U.S. Attorney Philip R. Sellinger, who announced the guilty plea, emphasized the collaborative investigative efforts led by Assistant Special Agent in Charge Michael Curran and Special Agent in Charge Patrick J. Hegarty.
Assistant U.S. Attorney Kathleen P. O’Leary of the Economic Crimes Unit is representing the government in this case, reinforcing the commitment to uphold legal and ethical standards in government contracting, particularly when national security and domestic manufacturing are at stake.