LI business owner pleads guilty in scheme to obtain 1 million in federal contracts

Michael Montenes, the owner of M.S. Hi-Tech, pleads guilty in scheme to obtain 1 million in federal contracts

Adina Genn
Long Island Business News

A Long Island business owner pleaded guilty in federal court in Central Islip Wednesday to bribing a federal official in a scheme to obtain nearly $1 million in federal contracts, officials said.

Michael Montenes, the owner of Hauppauge-based M.S. Hi-Tech, a distributor of electronic components, pleaded guilty to a charge in connection with a scheme to pay more than $18,000 to a Department of Energy procurement officer in exchange for approximately $969,000 in contracts from that department, according the U.S. Department of Justice.

In addition, officials said that the components Montenes sold to the DOE failed, causing $1.8 million in repairs and other costs to the federal government.

“Like the faulty components that he bribed a government official to purchase and caused damage to a Department of Energy laboratory, Montenes’s scheme has gone down in flames and he must now face the consequences for his crime,” U.S. Attorney Breon Peace said in a statement. “This office will continue to root out corruption that undermines the integrity of competitive bidding in the procurement process.”

Officials say that between approximately December 2017 and December 2020, Montenes bribed a procurement officer at a DOE laboratory in Virginia to enter into contracts for electronic components that MSHT would supply to the lab. The payments ranged $500 to $7,200, which Montenes mailed from Long Island the procurement officer in Virginia. During the bribery scheme, the procurement officer, whom officials call “Co-conspirator 1,” awarded contracts worth more than $969,000 to MSHT, which represented 95% of all of MSHT’s sales to the DOE’s Virginia laboratory.

Some of the electronic components sold by MSHT to DOE, based on Montenes’s bribes, went on to fail and cause a fire, officials said. This resulted in approximately $1.8 million in repairs and other costs to DOE.

No immediate information was available on whether there were any additional arrests. But DOE Inspector General Teri Donaldson said that his office “will continue to ensure that there is no place in our supply chain for bribery and corrupt schemes. Anyone who suspects such conduct is encouraged to report it immediately. We appreciate the fine work of the U.S. Attorney’s Office and our federal law enforcement partners on this joint investigation.”

As for Montenes, he faces up to 15 years in prison when sentenced. As part of his guilty plea, Montenes agreed to forfeit approximately $969,000 and to pay DOE more than $1.8 million in restitution.