Firm and 2 Brothers Accused of Bilking U.S.

A Corona firm that makes electronic gear used in U.S. military aircraft, radar and missile systems and two of the company’s former executives have been indicted on federal fraud and conspiracy charges, the U.S. attorney’s office said Thursday.

Transchem Inc., a division of Jetronics Industries of Philadelphia, was named in an 18-count indictment, as were Timothy K. Aiu, 40, of Chino Hills and his brother, Ernest W. Aiu, 39, of Hacienda Heights.

The Aiu brothers, who ran the company, are accused of directing subordinates to skip or sharply curtail certain tests required under government contracts to ensure proper workmanship.

Transchem manufactures equipment that converts alternating current to direct current and vice versa.

Its products are used in the Army’s Sentinel and Fire Finder radar systems, the Navy’s Harpoon missile launch system, the Navy’s P-3C Orion surveillance aircraft and the Air Force’s Advanced Airborne Intercept Simulator program.

Assistant U.S. Atty. Kimberly Dunne, chief of the prosecutor’s public corruption and government fraud section, declined to say whether any devices sold to the military by Transchem were found to be defective and, if so, whether any were ever used.

Transchem’s lawyer, Gerald L. Chaleff, said the company has been cooperating with the government. The Aius’ attorney could not be reached for comment Thursday.

Timothy Aiu was the company’s general manager responsible for overall operations and finances. Ernest Aiu oversaw day-to-day production, quality inspections and testing.

The indictment charges that the Aius directed that certain tests be bypassed or improperly performed and then instructed employees to falsify reports to show that the tests were actually conducted.

Last week, Transchem’s chief engineer, Wendell R. Frandsen, pleaded guilty in Los Angeles federal court to two counts of making false statements to the government about the tests. He could receive a statutory maximum of 10 years in prison when he is sentenced Nov. 20.

The company and the Aius were each charged with 11 counts of making false statements to the government, six counts of mail fraud and one count of conspiracy.

If convicted, the brothers face a statutory maximum penalty of five years in prison and a $500,000 fine for each count.

The case is an outgrowth of an investigation by the Defense Department’s criminal investigative service and contract management agency along with the Army’s criminal investigation division.