ABEC Industries and Owner Admit to Felony Crimes

A New York-area bearing distributor, ABEC Industries Inc., and its owner, Joseph Ungar, have pleaded guilty to multiple felony charges, including fraud, grand larceny, and tax evasion. The case stems from a long-running scheme to supply counterfeit bearings to the New York City Transit (NYCT) division of the Metropolitan Transit Authority (MTA).

ABEC Industries, based in Brooklyn, pleaded guilty to Trademark Counterfeiting and Identity Theft. As part of the plea, the company will:

  • Pay $5,000 in criminal fines

  • Permanently shut down all operations

  • Officially dissolve

Joseph Ungar Faces Heavy Penalties

Appearing before the New York State Supreme Court in Manhattan, Ungar pleaded guilty to Grand Larceny, Scheming to Defraud, and Repeated Failure to File Corporate Taxes. His sentence includes:

  • Five years of probation

  • $125,000 restitution

  • $5,000 in fines

  • Over $200,000 in unpaid taxes, penalties, and interest

  • A lifetime ban from doing business with the MTA

If Ungar fails to comply with his plea deal, he faces two to six years in prison.

Counterfeit Bearings Endangered Public Trust

Authorities revealed that between 2003 and 2008, ABEC Industries won three MTA contracts: two for ball bearings used in subway traction motors and one for bus transmission clutch bearings. Instead of delivering approved brands, Ungar and his company supplied counterfeit and inferior bearings, raising serious concerns about passenger and worker safety.

Manhattan District Attorney Robert Morgenthau described Ungar’s actions as “extensive counterfeiting and identity theft.” Assistant DA Jordan Arnold added: “In the aggregate, we’re talking about thousands of parts.”

Deception Through Fake Identities

Ungar had a history of being disqualified as an MTA vendor due to incomplete documentation. To continue winning bids, he began using false identities and fake business names.

  • He recruited notaries to validate fake signatures.

  • He impersonated the Patron Transmission Company, even assuming the identity of its deceased founder, Irving Patron, to win contracts.

  • He also stole the identities of other bearing manufacturers and distributors to make his counterfeit products appear legitimate.

Investigators discovered evidence in Brooklyn Navy Yard storage units, a New Jersey industrial complex, and Ungar’s Brooklyn home, including counterfeit inventory and label printers used to forge packaging.

Investigation and Discovery of Counterfeits

In 2006, an MTA service employee noticed irregularities in the markings, packaging, and serial numbers of bearings supplied by ABEC Industries. Metallurgical testing confirmed the parts were counterfeit.

Fortunately, most of the bearings were installed in non-safety-critical applications like bus clutches, and only a small number reached service use before the fraud was uncovered.

Tax Evasion Adds to Charges

The investigation also revealed that Ungar evaded personal income taxes from 2003–2007, while ABEC Industries avoided New York City corporate taxes by falsely listing its business address as a residential home in Monroe, NY.

Stronger Oversight and Supplier Audits to Follow

MTA Inspector General Barry Kluger stressed the importance of supplier accountability, stating: “When a dishonest vendor sells counterfeit parts, the MTA loses both the protection of a reputable warranty and the quality assurance of genuine equipment.”

He added: “The message is clear: You will be punished, you will pay us back, and you will never do business with us again.”

As a result of this case, NYCT is implementing reforms, including:

  • Stricter inspections of safety-critical parts

  • Enhanced supplier audits

  • Procurement staff training programs that will use this investigation as a case study in product substitution fraud