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Intellectual Property Rights

Former Simi Valley CEO convicted of selling Navy knock-off batteries used on subs and aircraft carriers

LOS ANGELES — A federal jury has convicted the former CEO of the Simi Valley-based battery distributor Powerline Inc. of defrauding the government by selling more than $2.6 million in cheap, knock-off batteries to the U.S. Department of Defense.

Didier De Nier, 63, who lived in Simi Valley until he fled the U.S. nearly two years ago, was found guilty Wednesday of five counts of wire fraud and one count of conspiracy to defraud the United States.

The charges stem from a probe by U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Defense Criminal Investigative Service. The Defense Logistics Agency and the Defense Contract Audit Agency also provided significant support to this investigation.

From 2004 to 2011, Powerline, which also did business as Birdman Distribution Corp, sold more than 80,000 batteries and battery assemblies that the Navy used for emergency back-up power aboard nuclear aircraft carriers, minesweepers and ballistic submarines. The batteries were installed on numerous Naval vessels.

According to the evidence presented during a six-day trial, De Nier and his employees disguised the bogus nature of the batteries by affixing counterfeit labels that falsely identified the batteries as originating from approved manufacturers. Powerline employees also used chemicals to remove "Made in China" markings from the knock-off batteries.

"Companies responsible for manufacturing equipment used by the U.S. military must be held to the highest standard - the lives of our service men and women depend on it," said Claude Arnold, special agent in charge for HSI Los Angeles. "HSI will continue to aggressively target and investigate those who jeopardize our nation's security or the welfare of those devoted to protecting it."

De Nier's ex-wife Lisa De Nier, who had served for decades as Powerline's vice president of sales, previously pleaded guilty in this case to conspiracy to defraud the government.

De Nier is scheduled to be sentenced by U.S. District Judge Dolly M. Gee Aug. 18. At sentencing, he faces a statutory maximum sentence of 110 years in federal prison. Lisa De Nier faces up to 10 years in prison. She is expected to be sentenced by Judge Gee later this year.

Shortly after federal agents searched Powerline's offices in July 2012, De Nier fled the Los Angeles area to live aboard his yacht near the Caribbean island of St. Martin, a French territory. In October 2013, federal agents arrested De Nier, a dual French-U.S. citizen, after he had sailed his yacht to the U.S. Virgin Islands.

This case is part of an ongoing initiative called Operation Chain Reaction (OCR) coordinated by the National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C. OCR targets and facilitates the seizure and investigation of counterfeit and substandard parts infiltrating the military and government supply chain. The HSI-led IPR Center has 21-member agencies who share information, develop initiatives, coordinate enforcement actions – most of whom participate in OCR.