A Canadian manufacturer of night vision goggles and two of its executives are facing criminal charges including wire fraud for allegedly trying to defraud the American military, the U.S. Department of Justice said Monday.

Toronto-based Newcon Optik Ltd., chief executive Michael Beker and former senior vice-president Arie Prilik face two counts each of wire fraud and one count each of conspiracy to commit wire fraud, the Justice Department said in a news release.

Newcon Optik and Beker also have each been charged with one count of money laundering.

The charges related to an alleged attempt to defraud the U.S. Army's Tank-Automotive and Armaments Command (TACOM), a military unit responsible for equipping and training the Iraqi army, the Justice Department said.

The alleged scheme could have resulted in the U.S. military overpaying $11 million US, the department said.

"All allegations of wrongdoing are denied," criminal lawyer Brian Heller told CBC News. "This case, as you know, is before the courts, where I can assure you, it'll be vigorously defended. We look forward to a favourable resolution."

Heller, who is representing Beker and Newcon, declined to provide further comment.

Boris Bytensky, the lawyer representing Prilik, said his client "vehemently denies any wrongdoing and will vigorously defend against these allegations."

As part of the scheme, a Newcon competitor was allegedly paid to withdraw from supplying TACOM with night vision goggles, creating an opening for another company to step in and supply TACOM with the equipment at a substantially inflated price, the department said.

An initial $50,000 US payment was made to the rival firm, the department said.

Thomas Barnett, assistant attorney general in charge of the Justice Department's antitrust division, said in the release that his unit "remains committed to detecting and prosecuting those who corrupt the defence procurement process at the expense of the U.S. military and the American taxpayer."

20-year prison sentences possible

If convicted on the conspiracy count, Beker and Prilik each face up to 20 years in prison for the wire fraud counts and up to five years in prison and a $250,000 US fine each, the department said.

Beker, who's also known as Mendel Beker, faces imprisonment for up to 20 years and a fine of up to $500,000 US if convicted of the money laundering charge, the department said.

The Justice Department said both men were arrested by the York Regional Police earlier this month.

Insp. Tom Carrique said police were assisting the United States through Interpol and Canada's Public Prosecution Service, which is handling the extradition case.

Beker, 57, of Thornhill, Ont., was arrested April 11 and released on bail, he said. Prilik, 40, also of Thornhill, was arrested April 18 and was expected to attend a bail hearing Monday in Toronto, he said.