"The fact that eCustoms internally develops, tests and then uses their systems in their own Customs brokerage group was an indicator that the product was reliable and the right fit for our organization."
Going to prison or paying a large fine for an export violation seems hypothetical or imaginary until it happens to you. The possibilities are horrifying to both individuals and businesses, but regrettably, American businesses and business people are convicted and fined, and American business people do go to jail. And their names, their company names,
and their violations are matters of public knowledge and consequently the cause of a great deal of damage to brand and personal reputation and prospects.
The heaviest fines are for willful, criminal convictions (currently up to $1 million, increasing to up to $10 million or ten times the value of the export when the new Export Administration Act is passed). Civil penalties are not as harsh, but still consequential.
In addition to fines and prison terms under criminal and civil sanctions, there are administrative sanctions (including denial of export privileges and exclusion from practice), statutory sanctions, seizure and forfeiture, cross-debarment,
denial of licenses or approvals, and suspensions of the right to contract with the United States Government that can ruin a company.
Case materials courtesy of the United States Government Bureau of Industry and Security (BIS) and Department of Justice.
2011 U.S. Export Violations
Selected U.S. Export Enforcement and Embargo Criminal Prosecutions
The following are snapshots of some selected export and embargo-related criminal prosecutions handled by the Justice Department.
These cases resulted from investigations by the Department of Homeland Security's U.S. Immigration and Customs Enforcement (ICE), the Federal Bureau of Investigation (FBI),
the Department of Commerce's Bureau of Industry and Security (BIS), the Pentagon's Defense Criminal Investigative Service (DCIS), and other law enforcement agencies.
Also included are several settlement cases, illustrating civil penalties.
TW METALS, INC.
March, 2011. The Commerce Department's Bureau of Industry and Security (BIS) announced that TW Metals, Inc. of Exton, Pennsylvania, has agreed to pay a $575,000 civil penalty to settle allegations that it violated the Export Administration Regulations (EAR) related to the export of titanium alloy and aluminum bar to China and Israel without the required export licenses.
BIS alleged that between April 2004 and August 2007, TW Metals made 48 exports of titanium alloy, controlled for reasons of nonproliferation, through Canada to the People's Republic of China without the required Department of Commerce licenses. Additionally,
TW Metals engaged in conduct prohibited by the EAR in July 2007 by exporting aluminum bar, also controlled for reasons of nuclear nonproliferation, through Canada to Israel without the required Department of Commerce license.
MILAD JAFARI
On Feb. 1, 2011 an indictment returned on July 21, 2010, was unsealed in the District of Columbia charging Milad Jafari, an Iranian citizen and resident, with illegally exporting and attempting to export specialized metals from the United States through companies in Turkey to several entities in Iran — including entities that have been sanctioned involvement in ballistic missile activities.
The Treasury Department also designated Jafari, several of his family members, associates, and corporate entities in Iran and Turkey, under Executive Order 13382, which targets for sanctions the proliferators of weapons of mass destruction and their supporters — thereby isolating them from the U.S. financial and commercial systems. The investigation was conducted by BIS and FBI.
YANNY AGUILA URBAY / ABDALAZIZ AZIZ HAMAYEL
On Jan. 27, 2011, Yanny Aguila Urbay was convicted by a jury in the Southern District of Florida of conspiracy to possess stolen, fully automatic M-16s, AK-47s and silencers, and receiving grenades and improvised explosive devices. On Dec. 16, 2010, his co-defendant,
Palestinian national Abdalaziz Aziz Hamayel, pleaded guilty to conspiracy to possess stolen machine guns and to transport grenades and improvised explosive devices. Urbay and Hamayel were first charged by complaint on Aug. 31, 2010, and later in a Sept. 10, 2010 indictment.
The charges resulted from an undercover operation in which Hamayel and Urbay met with an undercover agent and discussed the purchase price of between 200-300 stolen automatic assault rifles, 150 grenades and remotely detonated explosives. The investigation was conducted by the FBI.
YUFEING WEI / ZHEN ZHOU WU / CHITRON
On Jan. 27, 2011, Yufeing Wei was sentenced in the District of Massachusetts to 36 months in prison, while on Jan. 26, 2011, her co-defendant, Zhen Zhou Wu, was sentenced to 97 months in prison. Their company, Chitron Electronics, Inc. was fined $15.5 million.
Wei, Wu and Chitron Electronics, Inc. were convicted at trial on May 17, 2010 of conspiring for a period of more than ten years to illegally export to the People's Republic of China military electronics components and sensitive electronics used in military phased array radar,
electronic warfare and missile systems. Several Chinese military entities were among those receiving the exported equipment. Wu and Wei were also both convicted of filing false shipping documents with the U.S. government.
The court has entered a contempt order against Chitron-Shenzhen for refusing to appear for trial and fined the corporation $1.9 million dollars. The case was investigated by BIS; ICE; FBI; and DCIS.
NOSHIR GOWADIA
On Jan. 24, 2011, a federal judge in the District of Hawaii sentenced Noshir Gowadia, 66, of Maui to 32 years in prison for communicating classified national defense information to the People's Republic of China (PRC),
illegally exporting military technical data, as well as money laundering, filing false tax returns and other offenses. On Aug. 9, 2010, a federal jury in the District of Hawaii found Noshir S. Gowadia guilty of 14 criminal violations after six days of deliberation and a 40-day trial.
These included five criminal offenses relating to his design for the PRC of a low-signature cruise missile exhaust system capable of rendering a PRC cruise missile resistant to detection by infrared missiles.
The jury also convicted Gowadia of three counts of illegally communicating classified information regarding lock-on range for infrared missiles against the U.S. B-2 bomber to persons not authorized to receive such information.
Gowadia was also convicted of unlawfully exporting classified information about the B-2, illegally retaining information related to U.S. national defense at his home, money laundering and filing false tax returns for the years 2001 and 2002.
Gowadia was an engineer with Northrop Grumman Corporation from 1968 to 1986, during which time he contributed to the development of the unique propulsion system and low observable capabilities of the B-2 bomber.
This case was investigated by FBI, the U.S. Air Force Office of Special Investigations, the IRS, U.S. Customs and Border Protection, and ICE.
KUE SANG CHUN
On Jan. 20, 2011, Kue Sang Chun, a former longtime employee at the NASA Glenn Research Center in Ohio and resident of Avon Lake, Ohio, pleaded guilty in the Northern District of Ohio with one count of violating the Arms Export Control Act and one count of filing false tax returns.
He was charged in an information on Jan. 10, 2011. According to court documents, while working as an electrical engineer for NASA, Chun also operated a business out of his home through which he illegally exported U.S.munitions to the South Korea and performed consulting services for Korean businesses.
Chun illegally exported several infrared focal plane array detectors and infrared camera engines, which are classified as defense articles on the U.S. munitions list, to South Korea for use in Korean government projects between March 2000 and November 2005.
Chun entered into a contract with a Korean company to design, build and text electronics to support the items he was exporting. On occasion, Chung used his NASA e-mail address to order sensitive items from U.S. manufacturers, falsely asserting that they would be used for NASA projects in the United States,
when in fact, they were to be exported to South Korea. The investigation was conducted by the FBI and IRS.
ANNA FERMANOVA
On Jan. 14, 2011, Anna Fermanova pleaded guilty in the Eastern District of New York to one count of violating the Arms Export Control Act.
In March 2010, U.S. Customs and Border Protection (CBP) officers searched Fermanova's checked luggage at John F. Kennedy International Airport (JFK) in New York as she was preparing to board a flight to Moscow and identified three night vision items they suspected of being export controlled.
ICE agents asked Fermanova about the night vision scopes, and she admitted she had obscured some of the identification numbers on the items and that she knew a license was required to export them to Russia. ICE agents detained the items and permitted Fermanova to board her flight to Moscow.
ICE agents later determined that the items consisted of a Raptor night vision weapon sight and two advanced rifle sights, which are designated as defense articles. On July 15, 2010,
Fermanova was arrested (pursuant to a July 9, 2010 complaint) at JFK upon her return from Russia and she was charged with attempting to export the military night vision scopes. This investigation was conducted by ICE.
MARC KNAPP
On Jan. 13, 2011, Marc Knapp, of Simi Valley, California, pleaded guilty in the District of Delaware to a two-count information charging him with violating the Arms Export Control Act and the International Emergency Economic Powers Act .The information, filed on Nov. 22, 2010,
charges that Knapp engaged in a seven-month course of criminal conduct involving illegal exports to Hungary and attempted exports to Iran during negotiations with undercover agents posing as Iranian purchasers. Among other things, Knapp attempted to export a complete F-5 Tiger II fighter jet,
as well as F-14 flight ejection seats, anti-gravity flight suits, search and rescue beacons and emergency manuals for U.S. fighter jets. On two occasions, Knapp illegally exported items, including anti-gravity flight suits, to Hungary believing they were destined for Iran.
The investigation was conducted by ICE and DCIS.
JEROME STEWART PENDZICH
On Jan. 13, 2011, Jerome Stewart Pendzich, of Hampton, Tenn., pleaded guilty in the Eastern District of Tennessee to violating the Arms Export Control Act. According to court documents, ICE agents became aware that Pendzich was attempting to sell a bullet-proof vest on e-bay.
In May and June 2009, Pendzich attempted to export military-grade, small-arms protective inserts to purchasers in Colombia, who were undercover agents. The investigation was conducted by ICE.
AMEN AHMED ALI
On Jan. 7, 2011, Amen Ahmed Ali was sentenced in the Eastern District of California to five years in prison followed by three years supervised release for conspiracy to act as an illegal agent of a foreign government, to possess stolen government property,
and to unlawfully export defense materials. Ali pleaded guilty to these violations on Oct. 7, 2010. Beginning in 1987, Ali conspired with others to act as an unregistered agent of the Government of Yemen, and received instructions and acted on behalf of the Armed Forces Department of the Republic of Yemen.
Ali admitted that he took official actions on behalf of the Yemeni Government and that, among other things, he issued documents in 2002 ordering the arrest of a person upon his return to Yemen. Ali also admitted that in 2003 he had conspired with another person to cause various defense articles to be exported to Yemen without a license,
including bullet proof vests and chemical protective suits. The investigation was conducted by the Joint Terrorism Task Force, including FBI and ICE.
On Dec. 21, 2010, PPG Paints Trading (Shanghai) Co. Ltd, a wholly-owned Chinese subsidiary of U.S.-based PPG Industries Inc., pleaded guilty in the District of Columbia to conspiring to violate the International Emergency Economic Powers Act, the Export Administration Regulations and other charges.
The guilty plea stemmed from actions by PPG Paints Trading that caused the illegal export, reexport and/or transshipment of high-performance coatings from the U.S. to the Chashma 2 Nuclear Power Plant in Pakistan (Chashma 2),
via the People's Republic of China without the required export license. As part of its plea agreement, PPG Paints Trading agreed to pay the maximum criminal fine of $2 million, and serve five years of corporate probation. Under the terms of the related civil settlements,
PPG Industries and PPG Paints Trading also agreed to pay civil penalties of $750,000 and $1 million respectively. The investigation was conducted by the Commerce Department's BIS.
SERGEY KORZNIKOV / MARK KOMOROSKI / D&R SPORTS CENTER AND TACTICA LIMITED
On Dec. 13, 2010, in the Middle District of Pennsylvania, Sergey Korznikov, a Russian citizen, pleaded guilty to a superseding information charging him with conspiracy to smuggle military articles from the United States to Russia. On July 29, 2010,
Korznikov's co-defendant Mark Komoroski was sentenced to 32 months in prison and ordered to pay $10,000 after pleading guilty to conspiring to smuggle military equipment to Russia. Komoroski, of Nanticoke, Pa.; Korznikov,
of Moscow, and two companies, D&R Sports Center and Tactica Limited, were charged in a 2008 superseding indictment with conspiring to smuggle military equipment, including rifle scopes, magazines for firearms,
face shields, and other military equipment from the United States to Russian to be resold to unknown persons. The case was investigated by ICE, IRS, ATF, U.S. Postal Service, Department of Commerce and DCIS.
LIAN YANG
On Dec. 3, 2010, Lian Yang, a resident of Woodinville, Washington, was arrested pursuant to a criminal complaint filed in the Western District of Washington charging him with conspiracy to violate the Arms Export Control Act. According to the complaint, Yang attempted to purchase and export from the United States to China 300 radiation-hardened,
programmable semiconductor devices that are used in satellites and are also classified as defense articles under the U.S. Munitions List. This investigation was conducted by the FBI, ICE and CBP.
On Nov. 30, 2010, in the Central District of California, Iranian national Amirhossein Sairafi pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act and Iranian Transaction Regulations, as well as illegal exportation and smuggling of vacuum pump equipment out of the United States;
and money laundering. Sairafi was arraigned on Sept. 27, 2010 after being extradited from Germany to the United States for his alleged role in a scheme to export specialized vacuum pump equipment from the U.S. to Iran via the United Arab Emirates.
The vacuum pumps and related equipment at issue have a number of applications, including in the enrichment of uranium. Sairafi was first charged in a Jan. 4, 2010 criminal complaint and arrested in Germany in January 2010 pursuant to a U.S. provisional arrest warrant.
Two others have been charged in the conspiracy, Jirair Avanessian and Farhad Masoumian. This case was the product of an investigation by the Export and Anti-proliferation Global Law Enforcement (EAGLE) Task Force in the Central District of California,
which includes the FBI, ICE, BIS, CBP, Diplomatic Security Service and the Transportation Security Administration.
VIKTOR BOUT
On Nov. 17, 2010, after more than two years of legal proceedings in Thailand, accused international arms dealer, Viktor Bout was extradited from Thailand to the Southern District of New York to stand trial on charges of conspiracy to kill Americans,
conspiracy to acquire and use an anti-aircraft missile, and conspiracy to provide material support to terrorists in connection with his efforts to provide millions of dollars of weapons, including surface-to-air missiles and armor piercing rocket launchers,
to the Fuerzas Armadas Revolucionarias de Colombia (FARC), a designated foreign terrorist organization based in Colombia. Bout was arrested on March 5, 2008 by Thai authorities in Bangkok, Thailand.
VIKRAMIDITYA SINGH / ORION TELECOM NETWORKS, INC.
On Nov. 23, 2010, Vikramiditya Singh, a resident of Fountain Hills, Arizina, and the owner of Orion Telecom Networks, Inc., pleaded guilty in the District of Delaware to a one count information alleging that he caused and attempted to cause the illegal export of digital microwave radios to Iran between Sept.
2008 and May 2010. This case was investigated by ICE.
JULIAN GARCIA-PENALOZA
On Nov. 9, 2010, Julian Garcia-Penaloza (aka Martin Ramirez-Rodriguez) was sentenced in the Northern District of Florida to 572 months in prison after pleading guilty on Aug. 17, 2010 to conspiracy to export machine guns to Mexico, conspiracy to possess and transfer machine guns, as well as additional drug and firearm charges.
On June 22, 2010, a federal indictment was returned charging Garcia-Penaloza and Ramiro Gomez-Gomez, both of Mexico, with conspiracy to illegally export 50 fully-automatic AK-47 machine guns to Mexico for use by drug cartels.
The investigation was conducted by ATF, DEA, ICE and local law enforcement in the Northern District of Florida.
FLOYD D. STILWELL / MARSH AVIATION COMPANY
On Oct. 28, 2010, Floyd D. Stilwell of Phoenix, Arizona, and Marsh Aviation Company of Mesa, Arizona were indicted in the District of Arizona for violating the Arms Export Control Act and conspiracy. The indictment alleges that beginning in Nov. 2005 through Feb. 2008,
Stilwell Marsh Aviation and others contributed to the export of T-76 military aircraft engines from the United States to Venezuela for use by the Venezuelan Air Force. The T-76 aircraft engine was designed for the OV-10 Bronco Aircraft which is a light armed reconnaissance aircraft specifically suited for counterinsurgency missions.
The indictment also alleges that the defendants furnished assistance to members of the Venezuelan Air Force, including training in the assembly, testing, maintenance and use of the T-76 military aircraft engine without the required authorization from the State Department. The investigation was conducted by the FBI, ICE, and the DCIS.
BALRAJ NAIDU
On Oct. 18, 2010, a federal jury in the District of Maryland convicted Balraj Naidu, a citizen of Singapore, of conspiracy to provide material support to a foreign terrorist organization stemming from his efforts to supply the Liberation Tigers of Tamil Eelam (Tamil Tigers) with advanced American weaponry.
He was later sentenced to 57 months in prison on Dec. 16, 2010. The case was investigated by ICE, FBI, and DCIS.
YORK YUAN CHANG / LEPING HUANG / GENERAL TECHNOLOGY SYSTEMS INTEGRATION, INC.
On Oct. 11, 2010, York Yuan Chang, known as David Zhang, and his wife, Leping Huang, were arrested on charges in the Central District of California of conspiring to export restricted electronics technology to the People’s Republic of China (PRC) without a license and making false statements.
According to the Oct. 9, 2010 criminal complaint, the defendants are the owners of General Technology Systems Integration, Inc., (GTSI), a California company involved in the export of technology to the PRC. This investigation was conducted by the FBI, BIS, ICE, IRS and DCIS.
JOSEPH O'TOOLE / CHANOCH MILLER
On Oct. 5, 2010, Joseph O’Toole, a former U.S. Air Force Colonel F-4 Fighter pilot and U.S. citizen, and Chanoch Miller, an Israeli national,
pleaded guilty in the Southern District of Florida to charges of knowingly and willfully conspiring to export AK-47 assault rifles from the U.S. to Somalia without a license from the Department of State.
Both defendants were charged in a June 17, 2010 indictment with conspiring and attempting to illegally export defense articles, money laundering and money laundering conspiracy. The investigation was conducted by ICE and DCIS.
JACQUES MONSIEUR
On Sept 22, 2010, Jacques Monsieur, a Belgian national and resident of France suspected of international arms dealing for decades, was sentenced by a judge in the Southern District of Alabama to 23 months imprisonment.
On Nov. 23, 2009, Monsieur pleaded guilty to conspiracy to illegally export F-5 fighter jet engines and parts from the United States to Iran. The investigation was conducted by ICE and DCIS.
CHI TONG KUOK
On Sept. 13, 2010, Chi Tong Kuok, a resident of Macau, China, was sentenced in the Southern District of California to serve 96 months in prison for his efforts to obtain sensitive defense technology used in encrypted U.S. military or government communications and to cause them to be illegally exported to Macau and Hong Kong.
On May 11, 2010, Kuok was convicted at trial of conspiracy to export defense articles without a license and to smuggle goods, smuggling goods, attempting to export defense articles without a license and money laundering. This investigation was conducted by ICE and DCIS.
NGUESSAN YAO
On Sept. 9, 2010, a criminal complaint was filed in the Northern District of California charging Nguessan Yao, a citizen of Cote d'Ivoire (Ivory Coast) with conspiring to smuggle goods out of the United States in connection with a plot to illegally export 4,000 handguns,
200,000 rounds of ammunition, and 50,000 teargas grenades from the United States to Cote d'Ivoire. Yao was arrested by federal agents at JFK Airport on Sept. 9, 2010,
in New York before departing the United States. According to the complaint, Yao conspired with several other individuals in Cote d'Ivoire to obtain a large shipment of Glock 9mm pistols,
ammunition and tear gas grenades from undercover ICE agents for use in Cote d'Ivoire. The conspirators allegedly proposed that the weapons and other items be falsely labeled in shipping invoices as humanitarian goods for Cote d'Ivoire,
such as solar panels, water pumps and first aid kits. The conspirators arranged for nearly $4 million to be paid to undercover ICE agents for the purchase of the arms shipment.
None of the conspirators had a State Department license to export munitions to Cote d’Ivoire, which is the subject of a United Nations arms embargo. This investigation was conducted by ICE.
BLACKWATER WORLDWIDE
August 2010. The private security company formerly called Blackwater Worldwide, long plagued by accusations of impropriety, has reached an agreement with the State Department for the company to pay $42 million in fines for hundreds of violations of United States export control regulations.
The violations included illegal weapons exports to Afghanistan, making unauthorized proposals to train troops in south Sudan and providing sniper training for Taiwanese police officers, according to company and government officials familiar with the deal.
The settlement follows lengthy talks between Blackwater, now called Xe Services, and the State Department that dealt with the violations as an administrative matter, allowing the firm to avoid criminal charges.
A company spokeswoman confirmed Friday that a settlement had been reached. The settlement with the State Department does not resolve other legal troubles still facing Blackwater and its former executives and other personnel.
Those include the indictments of five former executives, including Blackwater's former president
MAHMOUD YADEGARI
On July 29, 2010, Mahmoud Yadegari was sentenced in a Canadian court in Toronto to four years and three months in prison for attempting to export pressure transducers that he had purchased in the United States to Iran, via Canada.
Yadegari purchased pressure transducers from a company in Massachusetts and transported them to Canada. Yadegari was found guilty on July 6, 2010 of nine charges, including the Customs Act, the United Nations Act,
the Export Import Permits Act, and the Nuclear Safety and Control Act. He was originally arrested by Canadian authorities in 2009 after a joint investigation by BIS, ICE and Canadian authorities.
STEVEN NEAL GREENOE
On July 26, 2010, Steven Neal Greenoe was charged by criminal complaint in the Eastern District of North Carolina with unlawfully shipping firearms on commercial aircraft without notifying the carrier and with violating the Arms Export Control Act in connection with the illegal export of firearms from the United States to the United Kingdom.
The investigation was conducted by ICE and ATF.
MAC AVIATION GROUP
On July 7, 2010, a superseding indictment was returned in the District of Columbia charging Mac Aviation Group, an Irish trading company, and its officers Thomas and Sean McGuinn of Sligo, Ireland,
with purchasing F-5 fighter aircraft parts from U.S. firms and illegally exporting them to Iran. The transaction with Iran was allegedly arranged through the Iran Aircraft Manufacturing Industrial Company,
known as HESA, which has been designated by the United States as an entity involved weapons mass destruction proliferation. The investigation was conducted by ICE and DCIS.
CHOU-FU HO
On June 25, 2010, Chou-Fu Ho was arrested after being indicted in the Southern District of California on charges of smuggling and illegally exporting military night vision systems to various locations overseas without the required State Department licenses.The investigation was conducted by ICE and DCIS.
AGAR CORPORATION INC.
On June 22, 2010, Agar Corporation Inc., a company in Houston, pleaded guilty in the Southern District of Texas to violating the International Emergency Economic Powers Act and agreed to pay $2 million in criminal fines and forfeiture as well as civil penalties to the U.S. Treasury's Office of Foreign Assets Control.
Agar Corporation illegally facilitated the export of multi-phase flow meters by an affiliate in Venezuela to the Sudan for use in the Melut Basin oilfield in violation of the embargo on the Sudan. The investigation was conducted by ICE.
ROCKY MOUNTAIN INSTRUMENT COMPANY
On June 22, 2010, in U.S. District Court for the District of Colorado, Rocky Mountain Instrument Company (RMI), a Colorado corporation located in Lafayette, Colorado, pled guilty to one count of knowingly and willfully exporting defense articles without a license in violation of the Arms Export Control Act.
The company was then immediately sentenced to five years of probation and ordered to forfeit $1,000,000. The case was investigated by ICE and DCIS.
MUTHANNA AL-HANOOTI
On June 21, 2010, Muthanna Al-Hanooti pleaded guilty in the Eastern District of Michigan to one count of violating the International Emergency Economic Powers Act (IEEPA) for unlawfully accepting an allocation of two million barrels of Iraqi oil from the Government of Iraq in December 2002 without the required U.S. government license.
This investigation was conducted by the FBI.
OMID KHALILI / MASUN
On June 17, 2010, Omid Khalili, an Iranian national, pleaded guilty in the Southern District of Alabama to attempting to illegally export U.S. fighter jet parts from the United States to Iran. Khalili, along with defendant &md Masun,II whose last name is unknown,
were charged in a nine-count indictment on Jan. 28, 2010, with conspiracy, money laundering, smuggling, as well as violations of the Arms Export Control Act and the International Emergency Economic Powers Act. The investigation was conducted by ICE and DCIS.
SAM CHING SHENG LEE / MULTIMILLION BUSINESS ASSOCIATE CORPORATION
On May 14, 2010, Sam Ching Sheng Lee, part-owner and chief operations manager of Multimillion Business Associate Corporation ("MBA"), pleaded guilty in the Central District of California to conspiracy to violate the International Emergency Economic Powers for illegally exporting national security-controlled thermal imaging cameras to China.
This investigation was conducted by the EAGLE Task Force in the Central District of California.
YI-LAN CHEN / LANDSTAR TECH COMPANY LIMITED
On May 13, 2010, Yi-Lan Chen, aka Kevin Chen, of Taiwan, and his Taiwan corporation, Landstar Tech Company Limited, pleaded guilty in the Southern District of Florida to a three count criminal information charging them with illegally exporting dual-use commodities to Iran that have potential military applications.
Among the dual-use items that Chen caused to be shipped to Iran were 120 circular hermetic connectors and 8,500 glass-tometal seals. While the goods have commercial applications, they also can make a significant contribution to the military or nuclear potential of other nations.
On Aug. 27, 2010, Chen was sentenced to 42 months in prison, while Landstar Tech Company Limited was sentenced to one year probation. The investigation was conducted by BIS and ICE.
BALLI AVIATION LTD.
On May 11, 2010, Balli Aviation Ltd., a subsidiary of the U.K.-based Balli Group PLC, was sentenced in the District of Columbia to pay a $2 million fine and to serve a five-year corporate period of probation after pleading guilty on Feb. 5, 2010,
to a two-count criminal information in connection with its illegal export of commercial Boeing 747 aircraft from the United States to Iran. The $2 million fine, combined with a related $15 million civil settlement among Balli Group PLC, Balli Aviation Ltd.,
the U.S. Department of Commerce's Bureau of Industry and Security (BIS), and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), represented one of the largest fines for an export violation in BIS history.
The investigation was conducted by BIS and OFAC.
ROYAL BANK OF SCOTLAND N.V.
On May, 10, 2010, the former ABN AMRO Bank N.V., now named the Royal Bank of Scotland N.V., agreed to forfeit $500 million in connection with a conspiracy to defraud the United States, to violate the International Emergency Economic Powers Act and to violate the Trading with the Enemy Act,
as well as a violation of the Bank Secrecy Act. A criminal information was filed in the District of Columbia. The bank waived indictment, agreed to the filing of the information, and accepted and acknowledged responsibility for its conduct. ABN AMRO agreed to forfeit $500 million as part of a deferred prosecution agreement.
The investigation was conducted by the IRS and FBI.
RUSLAN GILCHENKO / VICTOR DOBROGAIEV
On April, 23, 2010, a Feb. 24, 2010 indictment was unsealed in the District of Arizona charging Ruslan Gilchenko and Victor Dobrogaiev with conspiracy to violate the Arms Export Control Act, money laundering and fraud charges. The investigation was conducted by ICE.
HOK SHEK CHAN / WONG FOOK LOY / NGO TEK CHAI
On March 25, 2010, an indictment was unsealed in federal court in the District of Massachusetts charging Hok Shek Chan, Wong Fook Loy and Ngo Tek Chai with conspiring to and attempting to illegally export munitions without the required licenses. The case was investigated by ICE, BIS, and DCIS.
UNI-ARAB ENGINEERING / OIL FIELD SERVICES
On March 9, 2010, Uni-Arab Engineering and Oil Field Services, a firm incorporated in the United Arab Emirates and operated in part by two naturalized U.S. citizens, Jaime Radi Mustafa and Nureddin Shariff Sehweil, pleaded guilty in the Eastern District of Louisiana to violating U.S. sanctions against Libya.
According to the plea agreement, Uni-Arab caused goods to be shipped from Texas to the Netherlands in 2001 and 2002, where they were repackaged and illegally shipped to Libya.
BAE SYSTEMS PLC
On March 1, 2010, BAE Systems PLC (BAES), a multinational defense contractor with headquarters in the United Kingdom, pleaded guilty in the District of Columbia to conspiracy to defraud the United States, conspiracy to make false statements about its Foreign Corrupt Practices Act compliance program,
and conspiracy to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). BAES was sentenced on March 1, 2010 to a $400 million fine, 36 months probation, and a $400 assessment. With respect to the conspiracy to violate AECA,
BAES admitted to making false statements and failing to make required disclosures to the U.S. government in connection with the administration of certain regulatory functions, including statements and disclosures related to applications for arms export licenses, as required by the AECA and ITAR.
As part of the licensing scheme, applicants are required to identify associated commissions to the State Department- whether they are legitimate commissions or bribes - paid to anyone who helps secure the sales of defense materials. BAES admitted that, as part of the conspiracy,
it knowingly and willfully failed to identify commissions paid to third parties for assistance in soliciting, promoting or otherwise securing sales of defense items in violation of the AECA and ITAR. The case was investigated by the FBI and ICE, with assistance by DCIS and the General Services Administration, Office of Inspector General.
JUNIOR ESTIVEN
On Feb. 23, 2010, a grand jury in the Southern District of Florida returned an indictment charging Junior Estiven with conspiracy to smuggle firearms, making false statements in connection with the acquisition of firearms, and possession of firearms with obliterated serial numbers.
Estiven and others allegedly conspired to smuggle semi-automatic pistols to the Cayman Islands. The investigation was conducted by ICE and ATF.
CEDAR DISTRIBUTORS, INC. / TRANSAMERICA EXPRESS OF MIAMI, INC. / JUMBO CARGO, INC.
On Feb. 19, 2010, federal authorities in the Southern District of Florida announced the indictment of four individuals and three Miami businesses on charges involving the illegal export of electronics to a U.S. designated terrorist entity in Paraguay. According to the indictment, from March 2007 through January 2008,
freight-forwarders Talavera, through Transamerica, and Gonzalez-Neira, through Jumbo, exported Sony brand electronics, including Play station 2 consoles and digital cameras, to Samer Mehdi, owner of Jomana Import Export, an electronics business located within the Galeria Page, a shopping center in Ciudad del Este, Paraguay.
Safadi,through Cedar, was a distributor of the electronics to the freight-forwarders. Since Dec. 6, 2006, the shopping center known as Galeria Page in Ciudad del Este, Paraguay, has been designated as a Specially Designated Global Terrorist entity by the U.S.
Treasury Department, on grounds that it serves as a source of fundraising for Hizballah in the Tri-Border Area and is managed and owned by Hizballah members in the Tri-Border Area. Consequently, any transaction or dealing by a U.S. person with Galeria Page is prohibited. The OFAC designation banned trade with Galeria Page and all tenants located therein.
The investigation was conducted by ICE FBI, CBP, BIS, OFAC, and U.S. Secret Service.
DONGFAN — GREG II CHUNG
On Feb. 11, 2010 former Rockwell and Boeing engineer Dongfan — Greg II Chung was sentenced to 188 months imprisonment and three years supervised release after his July 16, 2009 conviction in the Central District of California. Chung was convicted of charges of economic espionage and acting as an illegal agent of the People’s Republic of China (PRC),
for whom he stole restricted technology and Boeing trade secrets, including information related to the Space Shuttle program and the Delta IV rocket. The investigation was conducted by the FBI and NASA.
ALI AMIRNAZMI / TRANTECH CONSULTANTS, INC.
On Jan. 11, 2010, Ali Amirnazmi, of Berwyn, PA, was sentenced in the Eastern District of Pennsylvania to 48 months in prison for his Feb. 13, 2009 conviction on one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA); three counts of violating IEEPA, three counts of making false statements;
and three counts of bank fraud. Amirnazmi was also ordered to forfeit $64,000 and to pay $17,277 restitution to Penn Liberty Bank. Amirnazmi, the owner of Trantech Consultants, Inc., in Pa., was charged by superseding indictment in October 2008 with crimes relating to his participation from 1996 to July 2008 in illegal business transactions and investments with companies located in Iran,
including companies controlled in whole or in part by the government of Iran, as well as lying to federal officials about those transactions, and bank fraud. The case was investigated by the FBI and IRS.
IOANNIS PAPATHANASSIOU / TAIPAN ENTERPRISES, LTD.
On Jan. 7, 2010, Ioannis Papathanassiou, of Vienna, Va., entered a guilty plea on behalf of his company, Taipan Enterprises, Ltd., in the Eastern District of Virginia for attempting to illegally broker the sale of weapons, night vision goggles and other military equipment to purchasers in Yemen, Libya, Chile and other nations. Taipan Enterprises was ordered to pay a fine of $15,000.
Court records indicate that Papathanassiou attempted to arrange the sale of Swiss-made machine pistols to a purchaser in Yemen, attempted to arrange the sale of Canadian night vision technology from Canada to Libya, attempted to arrange the sale of Canadian armored vehicles to the Chilean marine corps, attempted to arrange the sale of M4 rifles, gas grenades,
armored vehicles and other military equipment to Chile, and attempted to arrange the sale of a number of military armored vehicles from a Belgian defense manufacturer to a Missouri-based company for final use in Vietnam. The investigation was conducted by ICE and CBP.
On Dec. 18, 2009, Ugur Yildiz, a former suburban Chicago gun shop owner, was sentenced in the Northern District of Illinois to 7½ years in prison for illegally exporting more than 200 firearms to Canada — some of which were later used in violent crimes. Yildiz, of Park Ridge, owned the Chicagoland Bells gun store.
He was charged with violations of the Arms Export Control Act. Canadian authorities recovered several guns registered to Yildiz — including one traced to a killing and another that was pointed at a law enforcement officer.
AMIR HOSSEIN ARDEBILI
On Dec. 2, 2009, criminal indictments were unsealed in the Districts of Delaware and Massachusetts relating to the prosecution of Iranian arms procurement agent Amir Hossein Ardebili. Defendant Ardebili pled guilty to these indictments on May 19, 2008.
Ardebili has pled guilty to multiple violations of the Arms Export Control Act, International Emergency Economic Powers Act, smuggling, conspiracy and money laundering. The charges result from a three year international undercover investigation which exposed Ardebili's role as a prolific arms acquisitions agent for the government of Iran.
During the investigation, Ardebili negotiated the purchase and illegal export of a number of military components, including: QRS-11 Gyro Chip Sensors, which are used in numerous advanced aircraft, missile, space and commercial applications; MAPCGM0003 Phase Shifters,
which perform a key function in electronically steered antennae and have many applications including phased array radar, which is used in military target acquisition and missile guidance; and Digital Air Data Computer,
which is a replacement for the computer installed on the U.S. F-4 fighter aircraft used by Iran that calculates flight parameters including altitude, air speed, static pressure, mach number, and true angle of attack.
Ardebili's negotiations with undercover agents culminated in a face-to-face meeting in a foreign nation in October of 2007, after which Ardebili was arrested and extradited to the United States in January 2008.
On Dec. 14, 2009, Ardebili was sentenced to five years in prison. The investigation was conducted by ICE and DCIS.
DANI NEMR TARRAF / DOURI NEMR TARRAF
On Nov. 24, 2009, a grand jury in the Eastern District of Pennsylvania returned an indictment charging Dani Nemr Tarraf and Douri Nemr Tarraf, with conspiring to illegally export anti-aircraft missiles (FIM-92 Stingers) machine guns (approximately 10,000 Colt M4 Carbines), as well as M72 Light anti-armor weapons, Glock pistols, as well night vision equipment,
from Philadelphia to the Port of Latakia, Syria. In addition, these two defendants and Hassan Mohamad Komeiha, and Hussein Ali Asfour — were charged with conspiring to transport stolen goods. Dani Nemr Tarraf and Ali Fadel Yahfoufi were also charged with conspiring to commit passport fraud. According to a criminal complaint filed in the case, in or about mid-June 2009,
Dani Tarraf asked whether an undercover law enforcement official (UC) could supply guided missiles and told the UC that he (Tarraf) wanted the UC to export approximately 10,000 —commandoII machine guns [Colt M4 Carbines with short barrels] from the United States. On or about July 28, 2009, in Philadelphia,
Tarraf paid the UC a deposit of approximately $20,000 toward the cost of purchasing FIM-92 Stinger missiles and approximately 10,000 Colt M4 Carbines and shipping these items outside the United States to the Port of Latakia, Syria. Dani Tarraf was arrested on Nov. 21, 2009. The investigation was conducted by the FBI's Joint Terrorism Task Force,
ICE, IRS, Secret Service, DCIS, ATF, and other law enforcement agencies.
LAURA WANG — WOODFORD / MONARCH AVIATION PTE LTD
On Nov. 5, 2009, Laura Wang-Woodford, a U.S. citizen who served as a director of Monarch Aviation Pte Ltd., a Singapore company that imported and exported military and commercial aircraft components for more than 20 years, was sentenced in the Eastern District of New York to 46 months in prison and ordered to forfeit $500,000 for conspiring to violate the U.S. trade embargo by exporting controlled aircraft components to Iran.
On March 13, 2009, Wang-Woodford pled guilty to the charges. She was arrested on Dec. 23, 2007, at San Francisco International Airport after arriving on a flight from Hong Kong. She and her husband, Brian D. Woodford, a U.K. citizen who served as chairman and managing director of Monarch, were originally charged in a 20-count indictment on January 15, 2003. Brian Woodford remains a fugitive.
A superseding indictment charging Wang-Woodford with operating Jungda International Pte. Ltd (—JungdaII), a Singapore-based successor to Monarch, was returned on May 22, 2008. According to the superseding indictment, the defendants exported controlled U.S. aircraft parts from the U.S. to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to companies in Tehran, Iran,
without obtaining the required U.S. government licenses. The defendants also falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the U.S. government. The aircraft parts illegally exported to Iran include aircraft shields, shears, —oII rings, and switch assemblies, as well as U.S. military aircraft components, designed for use in Chinook military helicopters.
At the time of her arrest, Wang-Woodford possessed catalogues from a Chinese company, the China National Precision Machinery Import and Export Corporation (—CPMIECII), containing advertisements for surface-to-air missile systems and rocket launchers. CPMIEC has been sanctioned by the Treasury Department as a specially designated Weapons of Mass Destruction proliferator, based, in part,
on CPMIEC's history of selling military hardware to Iran. The investigation was conducted by BIS and ICE.
AVIATION SERVICES INTERNATIONAL
On Sept. 24, 2009, Aviation Services International (ASI), a Netherlands-based aviation services company, its owner, Robert Kraaipoel, and his son Robert Neils Kraaipoel, pleaded guilty in the District of Columbia to a one-count criminal information alleging conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations.
From about October 2005 to about October 2007, the defendants received orders from customers in Iran for U.S.-origin goods, including various aircraft components that were restricted from being transshipped into Iran. The defendants then contacted companies in the United States and negotiated purchases of materials on behalf of Iranian customers.
The defendants provided false end-user certificates to certain U.S. companies to conceal that customers in Iran would be the true recipients of the goods. The goods were routed to Iran through the Netherlands, the United Arab Emirates, and Cyprus. In 2006 alone, Aviation Services obtained some 290 aircraft-related components from the U.S. and caused them to be shipped to Iran.
Many of these U.S.-origin goods were sent to Iranian government agencies, Iranian procurement agencies or companies doing business in Iran. ASI agreed to pay a $100,000 fine and corporate probation for five years. The investigation was conducted by BIS, ICE, DCIS and FBI.
AARON HENDERSON / VAHALLA TACTICAL SUPPLY
On Sept. 18, 2009, Aaron Henderson, doing business as Vahalla Tactical Supply, pleaded guilty in the Southern District of Iowa to a criminal information, arising from his illegal export of restricted sighting devices to Taiwan and Afghanistan without the required export licenses. Henderson was sentenced to time served and two years-supervised release.
The investigation was conducted by BIS, ICE and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
DHL EXPRESS (USA) / DPWN Holdings (USA)
August 2009. DHL has agreed to pay a civil penalty of US$9.44 million for violating U.S. export regulations, and will conduct external audits covering exports to Iran, Syria and Sudan for the period March 2007 through December 2011.
The Commerce Department's Bureau of Industry & Security (BIS) and the Treasury Department's Office of Foreign Assets Control (OFAC) entered into the joint settlement agreement with DPWN Holdings (USA) and DHL Express (USA) regarding allegations that DHL unlawfully aided and abetted the illegal exportation of goods to Syria,
Iran and Sudan and failed to comply with record keeping requirements of the Export Administration Regulations (EAR) and OFAC regulations. BIS charged that, on eight occasions between June 2004 and September 2004, DHL caused, aided and abetted acts prohibited by EAR when it transported items subject to the EAR from the U.S. to Syria,
and that with regard to 90 exports between May 2004 and November 2004, DHL failed to retain air waybills and other export control documents required to be retained under Part 762 of the EAR. OFAC charged that DHL violated various OFAC regulations between 2002 and 2006 relating to thousands of shipments to Iran and Sudan.
Like DHL's EAR violations, its OFAC violations primarily involve DHL's failure to comply with applicable record-keeping requirements. "Preventing exports to sanctioned countries and preserving export records are fundamental components of effective compliance," said Kevin Delli-Colli, acting assistant secretary of commerce for export enforcement.
"Large-scale compliance breakdowns lead to significant sanctions aimed at ensuring that freight forwarders put into place and maintain necessary measures to meet their compliance responsibilities." In addition to the monetary penalty, DHL will hire an expert on U.S. export controls laws and sanctions regulations for an external audit of DHL transactions to Iran,
Sudan and Syria between March 2007 and December 2009. Thereafter, annual calendar year audits will be conducted in 2010 and 2011. The external auditor will assess DHL's compliance with the EAR and OFAC regulations.
On Aug. 3, 2009, William Chai-Wai Tsu, an employee of a Beijing-based military contracting company called Dimigit Science & Technology Co. Ltd, and the vice president of a Hacienda Heights, CA, front company called Cheerway, Inc., was sentenced in the Central District of California to 40 months in prison.
Tsu illegally exported more than 400 restricted integrated circuits with applications in military radar systems to China over a 10-month period, according to court documents.
These dual-use items are restricted for export for national security reasons. Tsu purchased many of the items from U.S.— distributors after falsely telling these U.S. companies that he was not exporting the circuits abroad.
According to court documents, Tsu supplied restricted U.S. technology to several customers in China, including the — 704 Research Institute, which is known as the — Aerospace Long March Rocket Technology CompanyII and is affiliated with the state-owned China Aerospace Science & Technology Corporation.
Tsu's employer in China, Dimigit, boasted in brochures that its mission was — providing the motherland with safe, reliable and advanced electronic technical support in the revitalization of our national military industry.
Tsu was indicted in the Central District of California on Feb. 6, 2009 on charges of violating the International Emergency Economic Powers Act. He later pleaded guilty to two federal counts of the indictment on March 13, 2009.
This case was the product of an investigation by the Export and Anti-proliferation Global Law Enforcement (EAGLE) Task Force in the Central District of California, which includes BIS, ICE, FBI, CBP, Diplomatic Security Service and the Transportation Security Administration.
DR. JOHN REECE ROTH / DANIEL MAX SHERMAN
On July 1, 2009, Dr. John Reece Roth was sentenced in the Eastern District of Tennessee to 48 months in prison, two years supervised release and a $1,700 assessment for illegally exporting sensitive military technical data related to a U.S. Air Force contract. Roth, a former Professor Emeritus at the University of Tennessee,
was convicted on Sept. 2, 2008 of 15 counts of violating the Arms Export Control Act, one count of conspiracy, and one count of wire fraud. Roth had illegally exported military technical data relating to plasma technology designed to be deployed on the wings of Unmanned Aerial Vehicles (UAVs) or —drones operating as a weapons or surveillance systems.
The illegal exports involved technical data related to an Air Force research contract that Roth provided to foreign nationals from China and Iran. In addition, Roth carried multiple documents containing controlled military data with him on a trip to China and caused other controlled military data to be e-mailed to an individual in China.
On Aug. 20, 2008, Atmospheric Glow Technologies, Inc (AGT), a privately-held plasma technology company in Tennessee, also pleaded guilty to charges of illegally exporting U.S. military data about drones to a citizen of China in violation of the Arms Export Control Act. AGT was sentenced on Feb. 12, 2010 to a $4,000 assessment and a $25,000 fine.
Roth and AGT were first charged on May 20, 2008. In a related case, on April 15, 2008, Daniel Max Sherman, a physicist who formerly worked at AGT, pleaded guilty to an information charging him with conspiracy to violate the Arms Export Control Act in connection with this investigation.
Sherman was later sentenced to 14 months in prison on Aug. 10, 2009 after cooperating in the investigation. The investigation was conducted by the FBI, ICE, U.S. Air Force Office of Special Investigations, DCIS and BIS.
ROY LYNN OAKLEY
On June 18, 2009, Roy Lynn Oakley, of Harriman, Tenn., was sentenced in the Eastern District of Tennessee to six years in prison for unlawful disclosure of restricted data under the Atomic Energy Act in connection with his efforts to sell materials used in the production of highly enriched uranium to a foreign government.
Oakley pleaded guilty to this offense on Jan. 26, 2009. Oakley had worked as a contract employee at the East Tennessee Technology Park (ETTP), in Oak Ridge, Tenn., which was previously a Department of Energy facility that produced highly enriched uranium.
While employed at ETTP, Oakley stole restricted nuclear materials from the facility and offered them for sale to the French government. The French government officials did not pursue the purchase of these items.
The FBI launched an undercover investigation posing as an agent of the foreign government and arrested Oakley after he offered them the nuclear materials in exchange for $200,000 cash.
The materials involved were pieces of equipment known as — barrier and associated hardware items that play a crucial role in the production of highly enriched uranium. The investigation was conducted by the FBI and Department of Energy.
TRAIAN BUJDUVEANU / KESH AIR INTERNATIONAL
On June 11, 2009, Traian Bujduveanu was sentenced in the Southern District of Florida to 35 months in prison followed by three years supervised release for his role in a conspiracy to illegally export military and dual-use aircraft parts to Iran. Bujduveanu appeared on behalf of himself and his now defunct corporation, Orion Aviation Corp.,
in federal court to announce his guilty plea on April 2, 2009. Bujduveanu's co-defendant, Hassan Keshari, and his corporation, Kesh Air International, pleaded guilty in January 2009 to charges of conspiring to illegally export military and commercial aircraft components to Iran. Keshari was sentenced to 17 months in prison on May 14, 2009.
On July 3, 2008, Keshari, Kesh Air International, as well as Bujduveanu, and his company Orion Aviation, were indicted for their participation in a conspiracy to export U.S.-made military and dual-use aircraft parts to Iran. In June 2008, agents arrested Keshari at Miami International Airport as he walked off a flight from Atlanta.
Bujduveanu was arrested at his Plantation, Florida, home on June 21, 2008. Since August 2006, Keshari and Bujduveanu have allegedly procured U.S.-made military aircraft parts for buyers in Iran and have illegally shipped the parts to a company in Dubai, UAE, for shipment to buyers in Iran.
Keshari allegedly received the orders for specific parts by e-mail from buyers in Iran. Keshari then requested quotes, usually by e-mail, from Bujduveanu and made arrangements with Bujduveanu for the sale and shipment of the parts to a company in Dubai. From Dubai, the parts were then shipped on to Iran.
Keshari and Bujduveanu are alleged to have obtained and illegally shipped to buyers in Iran parts for the CH- 53 military helicopter, the F-14 Tomcat fighter jet, and the AH-1 attack helicopter. Keshari is also alleged to have requested quotes for other parts for other military aircraft,
including F-4 Phantom aircraft. This investigation was conducted by BIS, ICE, and DCIS.
JOSEPH PIQUET / ALPHATRONX
On May 14, 2009, JosephPiquet, the owner and President of AlphaTronX, a company in Port St. Lucie, Fla., that produces electronic components, was sentenced in the Southern District of Florida to 60 months in prison followed by two years supervised release.
On March 5, 2009, he was convicted of seven counts arising from a conspiracy to purchase military electronic components from Northrop Grumman Corporation, and to ship them to Hong Kong and the People’s Republic of China without first obtaining required export licenses under the Arms Export Control Act and the International Emergency Economic Powers Act.
Among those items involved in the conspiracy were highpower amplifiers designed for use by the U.S. military in early warning radar and missile target acquisition systems, as well as low noise amplifiers that have both commercial and military use. Piquet was first indicted on June 5, 2008, along with his company, AlphaTronX, Inc,
as well as Thompson Tam, and Ontime Electronics Technology Limited. Tam is a director of Ontime Electronics, an electronics company in China. On March 2, 2009, the Court ordered the dismissal of the indictment against AlphaTronX. This investigation was conducted by BIS and ICE.
RIGEL OPTICS, INC / DONALD WAYNE HATCH
On May 12, 2009, Rigel Optics, Inc. was sentenced in the Southern District of Iowa to pay a $90,000 fine and a $400 special assessment for illegally exporting military night vision goggles to Italy. Rigel's owner, Donald Wayne Hatch, was sentenced to two years probation and ordered to pay a $5,000 fine for making false statements in connection with the illegal export.
On July 31, 2008, the defendants pleaded guilty to these violations. The defendants were indicted on June 24, 2008 for illegally exporting military night vision systems. The case was investigated by ICE and BIS.
FUSHINE TECHNOLOGY, INC. / EVERJET SCIENCE AND TECHNOLOGY CORPORATION
On April 7, 2009, Fu-Tain Lu was arrested in San Francisco pursuant to an April 1, 2009 indictment in the Northern District of California charging him with lying to federal agents and conspiring to illegally export restricted microwave amplifier technology to China. According to the indictment, Lu,
and the two companies he founded, Fushine Technology, Inc., of Cupertino, Calif., and Everjet Science and Technology Corporation, based in China, conspired to export sensitive microwave amplifier technology that was restricted for national security reasons to China without first obtaining a Commerce Department license.
On Feb. 17, 2010, a superseding indictment was returned charging Fu-Tain Lu, Fushine Technology, Inc., and Everjet Science and Technology Corporation with conspiracy to violate export regulations and making false statements.
This investigation was conducted by the Department of Commerce (BIS), the FBI, ICE, and U.S. Customs and Border Protection.
SHU QUAN-SHENG, AMAC INTERNATIONAL
On April 7, 2009, Shu Quan-Sheng, a native of China, naturalized U.S. citizen and PhD physicist, was sentenced to 51 months in prison for illegally exporting space launch technical data and defense services to the People’s Republic of China (PRC) and offering bribes to Chinese government officials.
Shu pleaded guilty on Nov. 17, 2008, in the Eastern District of Virginia to a three-count criminal information. He was arrested on Sept. 24, 2008. He was the President, Secretary and Treasurer of AMAC International, a high-tech company located in Newport News, Va., and with an office in Beijing, China.
Shu provided the PRC with assistance in the design and development of a cryogenic fueling system for space launch vehicles to be used at the heavy payload launch facility located in the southern island province of Hainan, PRC. The Hainan facility will house launch vehicles designed to send space stations and satellites into orbit,
as well as provide support for manned space flight and future lunar missions. Shu also illegally exported to the PRC technical data related to the design and manufacture of a — Standard 100 M3 Liquid Hydrogen (LH) 2 Tank. In addition,
Shu offered approximately $189,300 in bribes to government officials with the PRC’s 101 Institute to induce the award of a hydrogen liquefier project to a French company he represented. In January 2007, the $4 million hydrogen liquefier project was awarded to the French company that Shu represented. This investigation was conducted by the FBI, ICE, BIS and DCIS.
DAVID LEE / LUCENA TECHNOLOGY, INC.
On March 25, 2009, David Lee plead guilty in the Northern District of Illinois to a one count indictment charging that he illegally exported thermal imaging cameras to South Korea without obtaining the required export license. Lee, the owner of Lucena Technology, Inc., an export company in Park Ridge, III.,
exported seven thermal imaging cameras to South Korea in June 2007 without obtaining the required U.S. Department of Commerce export license. Under the terms of the plea agreement, Lee agreed to forfeit $59,500 which represents the proceeds from the sale of the cameras.
Lee was originally indicted on Dec. 16, 2008. On June 29, 2009, Lee was sentenced to two years probation and a $3,000 fine. The investigation was conducted by BIS and U.S. Customs and Border Protection.
MAC AVIATION GROUP
On March 24, 2009, a 25-count indictment was unsealed in the District of Columbia charging Mac Aviation Group, a trading company in Ireland, and three of its officers with purchasing aircraft engines and components from U.S. firms and illegally exporting these components to Iran via Malaysia and the United Arab Emirates. Among the alleged recipients of these goods was the Iran Aircraft Manufacturing Industrial Company (HESA),
a military entity designated by the U.S. for its role in Iran’s nuclear and ballistic missile program, as well as Iran Aircraft Industries (IACI). The three Mac Aviation officers charged in the indictment, which was filed on July 22, 2008, are Thomas McGuinn, his son, Sean McGuinn, and Sean Byrne.
According to the indictment, the defendants purchased 17 aircraft engines from Rolls-Royce in Indiana and caused them to be exported to a publishing company in Malaysia, and later shipped on to HESA in Iran. The indictment also alleges that the defendants purchased 50 aircraft components known as — 5th Stage vanes from the United States and illegally exported them to Iran,
and also obtained various U.S.-origin aircraft bolts, which they routed through a trading company in the United Arab Emirates to Iran. The defendants are alleged to have worked with Hossein Ali Khoshnevisrad and his Tehran business,
Ariasa, AG, in purchasing some of these components for Iran. Khoshnevisrad was arrested on March 14, 2009 in San Francisco on federal export violations. This case was investigated by ICE and BIS.
MAJID KAKAVAND / EVERTOP SERVICES SDN BHD
On March 20, 2009, Iranian national and resident Majid Kakavand was arrested in France pursuant to a provisional U.S. arrest warrant issued in the Northern District of California. An April 7, 2009 indictment charges Kakavand and two co-defendants, Amir Gasemi and Alex Ramzi, with overseeing an international network that allegedly purchased thousands of military and commercial items from U.S. companies and illegally exported these goods to Iran via Malaysia.
The alleged recipients of these goods included two Iranian military entities designated by the United States for their role in Iran's nuclear and ballistic missile program. According to court documents, Kakavand served as a director of a company in Malaysia called Evertop Services Sdn Bhd, that he and others created to procure goods from the United States and Europe for export to Iran. Gasemi was also a director of Evertop Services,
while Ramzi served as the purchasing supervisor. Evertop Services' primary customers in Iran were two Iranian military entities, Iran Electronics Industry (IEI), and Iran Communication Industries (ICI), both of which were designated in 2008 by the United States for their role in Iran’s nuclear and ballistic missile programs. Furthermore,
IEI was listed by the European Union as an entity linked to Iran's proliferation-sensitive nuclear activities or Iran's development of nuclear weapon delivery systems. Using Evertop Services, Kakavand and his-codefendants allegedly purchased products for Iran from U.S. companies in several states, including California, Alabama, Florida,
Washington, and New Jersey. Kakavand has allegedly exported more than 30 shipments of goods from the United States to Iran since February 2006. These shipments contained electronic and avionic components, including capacitors, spectrometers, resistors, sensors, connectors, and airborne antennae.
Kakavand allegedly concealed from the U.S. companies that the ultimate end-users of these products were in Iran, and at no time did he have a license to export or re-export goods to Iran. For example, in one transaction, Kakavand allegedly purchased 41,900 radial connectors from a company in California and,
in January 2008, wired $51,425 to the firm as payment for the goods. The affidavit indicates that these goods were exported from the United States to Evertop Services in Malaysia, then re-exported to ICI in Iran.
In other transactions spelled out in the affidavit, Kakavand used similar techniques to illegally export sensors, inductors and other materials to Iran. On May 5, 2010, the U.S. extradition request for Kakavand was denied by a French court.
Kakavand was released by French authorities and returned to Iran. This investigation was conducted by BIS and ICE.
HOSSEIN ALI KHOSHNEVISRAD / ARIASA, AG
On March 14, 2009, Hossein Ali Khoshnevisrad was arrested in San Francisco pursuant to a sealed criminal complaint charging him and his Tehran-based business, Ariasa, AG, with purchasing helicopter engines and advanced aerial cameras for fighter bombers from U.S. firms and illegally exporting them to Iran using companies in Malaysia, Ireland and the Netherlands.
Among the alleged recipients of these U.S. goods was an Iranian military firm that has since been designated by the United States for being owned or controlled by entities involved in Iran's nuclear and ballistic missile program. The criminal complaint, which was filed under seal in the District of Columbia on Aug. 1, 2008,
charges Khoshnevisrad and Ariasa with two counts of unlawfully exporting U.S. goods to Iran and two counts of conspiracy to unlawfully export U.S. goods to Iran in violation of the International Emergency Economic Powers Act. According to the complaint, from Jan. 2007 through Dec. 2007, Khoshnevisrad and Ariasa caused Mac Aviation GGhroup, a trading company in Ireland,
to purchase 17 model 250 turbo-shaft helicopter engines from Rolls-Royce Corp. in Indiana for $4.27 million. Mac Aviation allegedly company concealed from Rolls-Royce the end user of the engines, and arranged for them to be exported from the U.S. to a purported — book publisher in Malaysia, and later shipped to Iran. Among the recipients in Iran was the Iran Aircraft Manufacturing Industrial Company,
known as HESA, which was designated by the United States for being controlled by Iran's Ministry of Defense and Armed Forces Logistics and providing support to the Iranian Revolutionary Guard Corps. According to the complaint, Khoshnevisrad and Ariasa also caused to be exported to Iran several aerial panorama cameras from the United States.
These cameras were designed for the U.S. Air Force for use on bombers, fighters and surveillance aircraft, including the F-4E Phantom fighter bomber, which is currently used by the Iranian military. According to the affidavit, in 2006, Khoshnevisrad instructed a Dutch aviation parts company to place an order for these cameras with a U.S. company located in Pennsylvania and to ship them to an address in Iran.
According to the affidavit, the Dutch company ordered the aerial panorama cameras from the Pennsylvania firm, falsely stating that the Netherlands would be the final destination for the cameras. This investigation was conducted by BIS, FBI, ICE and DCIS.
YAMING NINA QI HANSON / HAROLD DEWITT HANSON
On March 12, 2009, a federal grand jury in the District of Columbia returned an indictment charging Yaming Nina Qi Hanson, her husband Harold Dewitt Hanson (an employee at Walter Reed Army Medical Center), and a Maryland company, Arc International, LLC,
with illegally exporting miniature Unmanned Aerial Vehicle (UAV) Autopilots to a company in the People's Republic of China. The UAV components are controlled for export to China for national security reasons.
On Feb. 3, 2010, Harold Dewitt Hanson was sentenced to 24 months imprisonment, while his wife, Yaming Nina Qi Hanson was sentenced to time served. The investigation was conducted by BIS and FBI.
SHAHRAZAD MIR GHOLIKHAN
On March 6, 2009, Shahrazad Mir Gholikhan was sentenced in the Southern District of Florida to 63 months in prison for brokering defense articles to Iran and other export violations in connection with an effort by she and her husband, Mahmoud Seif,
to illegally procure 3,500 sets of Generation III military night vision goggles from the United States for Iran's military and police forces. Gholikhan was convicted of the charges on Dec. 19, 2008. Gholikhan and her husband were first arrested in 2004 in Vienna,
Austria, after a meeting with undercover law enforcement officials in which they received the first sample shipment of U.S. night vision goggles destined for Iran. After her arrest, Gholikhan told authorities that she and her husband were not allowed to transport the items from Austria to Iran,
but that the Iranian Embassy in Austria was to organize the shipment of night vision goggles to Iran. Austrian authorities subsequently released the couple and they returned to Iran. Seif remains a fugitive. Gholikhan was arrested by U.S. authorities in December 2007 upon her arrival in the United States.
She later pleaded guilty to one count of conspiracy. However, she subsequently withdrew the plea after a dispute over her sentence and represented herself at a new trial in 2008, where she was convicted of three of six counts. This investigation was conducted by ICE, DCIS, and Austrian law enforcement.
SCHNEIDER GMBH/ HANS SCHNEIDER / CHRISTOF SCHNEIDER
On Feb. 5, 2009, two German nationals and a German company were indicted in the District of Massachusetts for conspiring to illegally export pump parts worth more than $200,000 to Iran in violation of the International Emergency Economic Powers Act.
According to the indictment, Hans Schneider and Christof Schneider conspired with an individual in Jordan to obtain pump parts from a U.S. company for centrifugal sulphuric acid and sulphur pumps located in Iran.
The pump parts would be delivered to Germany and re-exported to Iran by the defendants via their company, Schneider Gmbh. The case was investigated ICE and BIS.
MICHAEL MING ZHANG / POLICARPO CORONADO GAMBOA
On Jan. 20, 2009, Michael Ming Zhang and Policarpo Coronado Gamboa were arrested pursuant to indictments in the Central District of California charging them with separate schemes involving the illegal export of controlled U.S. electronic items to China and the illegal trafficking of counterfeit electronic components from China into the United States. Zhang was the president of J.J. Electronics,
a Rancho Cucamonga, CA, business, while Gamboa owned and operated Sereton Technology, Inc., a Foothill Ranch, CA, business. Zhang allegedly exported to China dual-use electronic items that have uses in U.S. Army battle tanks. He also allegedly imported and sold in the United States roughly 4,300 Cisco electronic components bearing counterfeit marks from China.
Gamboa is charged with conspiring with Zhang to import Sony electronic components with counterfeit marks from China for distribution in the United States. On July 9, 2009, Gamboa pleaded guilty one count of the indictment and was later sentenced to 5 years probation and was ordered to pay $13,600 restitution to Sony Electronics.
On July 6, 2009, Zhang pleaded guilty to count one in each of the indictments. The case was investigated by the FBI, BIS, DCIS, ICE, the U.S. Postal Inspection Service, and the Orange County Sheriff's Department, in conjunction with the EAGLE Task Force in the Central District of California.
On Dec. 12, 2008, in the Eastern District of Michigan, Fawzi Assi was sentenced to 10 years' imprisonment for attempting to provide material support to Hizballah, a foreign terrorist organization. Assi's offense conduct took place in 1998, when he attempted to board an airplane at Detroit Metro Airport with restricted military items destined for two men in Lebanon whom he believed to be members of Hizballah.
Specifically he attempted to illegally export night vision goggles, global positioning satellite modules, and a thermal imaging camera. Assi pled guilty on Nov. 29, 2007. Assi had been a fugitive until he voluntarily surrendered to the FBI in Lebanon and was flown to the United States on May 17, 2004.
The case was investigated by the FBI and ICE.
HANJUAN JIN
On Dec. 9, 2008, in the Northern District of Illinois, Hanjuan Jin was charged in a superseding indictment that added three counts of economic espionage in violation of 18 U.S.C. § 1831. The charges were added to an April 1, 2008, indictment that charged Jin with theft of trade secrets under 18 U.S.C. § 1832. Jin is a former Motorola employee who started with the company in 1998.
On February 28, 2007, one day after quitting Motorola, Jin was stopped at O'Hare airport with over 1,000 Motorola documents in her possession, both in hard copy and electronic format. A review of Motorola computer records showed that Jin accessed a large number of Motorola documents late at night. At the time she was stopped, Jin was traveling on a one-way ticket to China.
The section 1831 charges are based on evidence that Jin intended that the trade secrets she stole from Motorola would benefit the Chinese military. Motorola had spent hundreds of millions of dollars on research and development for the proprietary data that Jin allegedly stole. The investigation was conducted by the FBI, with assistance from U.S Customs and Border Protection.
MOHAMMAD REZA VAGHARI / MIR HOSSEIN GHAEMI / SAAMEN COMPANY
On Nov. 17, 2008, the U.S. Attorney for the Eastern District of Pennsylvania unsealed an indictment charging Mohammad Reza Vaghari and Mir Hossein Ghaemi with violations of the International Emergency Economic Powers Act for illegally exporting a variety of U.S.—origin goods to the United Arab Emirates for ultimate delivery to Iran.
Operating through a Pennsylvania company called Saamen Company, the defendants allegedly illegally exported computers, fuel cell systems, ultrasonic liquid processors, ultrasound machines, and other laboratory equipment. The investigation was conducted by the FBI and BIS.
RYAN MATHERS / CHARLES CARPER / RONALD WILLIAM ABRAM / JASON FLEGM / MARK VAUGHT / BRENDON SHULTZ
On Oct. 29, 2008, a criminal complaint was filed in the District of Hawaii against six U.S. Marines based at Kane’ohe Bay, Hawaii, for conspiring to illegally export stolen military night vision. Ryan Mathers, Charles Carper, Ronald William Abram, Jason Flegm, Mark Vaught, and Brendon Shultz were each charged with conspiracy to smuggle goods out of the United States. According to the complaint,
the investigation began when agents learned that one of the defendants was selling stolen U.S. military night vision equipment on the Internet via eBay. A cooperating defendant subsequently purchased several night vision systems from the defendants, representing they would be illegally exported to Hong Kong. The Court later dismissed the indictment against defendants Schultz (April 24, 2009),
Flegm (March 5, 2009), and Vaught (March 24, 2009) and a second superseding indictment was filed on April 14, 2010 charging Defendants Mathers, Carper, Abram, and Joshua Vaughn with conspiring to illegally export stolen military night vision monocular devices. The case was investigated by ICE, DCIS, and NCIS.
SEYED MAHMOOD MOUSAVI
On Oct. 14, 2008, Seyed Mahmood Mousavi, a former interrogator for the Islamic Revolutionary Court in Iran, was sentenced in the Central District of California to 33 months in prison and a $12,500 fine for violating the trade embargo with Iran, false statements to the FBI, and filing a false tax return.
Mousavi entered into consulting contracts to support a company in Iran in their efforts to bid for a mobile communication license and to establish a bank and leasing company in Iran. On April 24, 2008, Mousavi was convicted at trial of all counts of a June 8, 2007 indictment. The investigation was conducted by the FBI.
DAWN HANNA
On Oct. 2, 2008, Dawn Hanna was convicted by a jury in the Eastern District of Michigan on eight counts of an indictment charging her with illegally exporting telecommunications and other equipment with potential military applications to Iraq during the administration of Saddam Hussein and during the embargo on that country. Codefendant Darrin Hanna was acquitted at trial. On July 19, 2007,
both defendants were indicted on charges of conspiracy, violating the International Emergency Economic Powers Act, money laundering conspiracy, and false statements. From 2002 to 2003, the defendants allegedly received $9.5 million in proceeds to supply telecommunications and other equipment to Iraq in violation of the U.S. embargo that existed prior to the invasion by coalition forces in 2003. On March 25, 2009,
Dawn Hanna was sentenced to six years in prison and ordered to pay $1.1 million, which represented profits to her and her business. This investigation was conducted by ICE, the Internal Revenue Service (IRS) and the FBI.
QING LI
On Sept. 26, 2008, Qing Li was sentenced in the Southern District of California to 12 months and one day in custody, followed by three years of supervised released, and ordered to pay $7,500 for conspiracy to smuggle military-grade accelerometers from the United States to the People's Republic of China (PRC).
Li pleaded guilty on June 9, 2008 to violating Title 18, USC Section 554. She was indicted for the offense on Oct. 18, 2007. According to court papers, Li conspired with an individual in China to locate and procure as many as 30 Endevco 7270A-200K accelerometers for what her co-conspirator described as a — special scientific agency in China.
This accelerometer has military applications in — smart bombs and missile development and in calibrating the g-forces of nuclear and chemical explosions. The investigation was conducted by ICE and the DCIS.
MAYROW GENERAL TRADING / ATLINX ELECTRONICS / MICATIC GENERAL TRADING / MADJICO MICRO ELECTRONICS / AL-FARIS / NEDA INDUSTRIAL GROUP / ECO BIOCHEM SDN BHD / VAST SOLUTION SDN BHD
On Sept. 18, 2008, a 13-count indictment was unsealed in the Southern District of Florida charging eight individuals and eight companies with conspiracy, violations of the International Emergency Economic Powers Act, the U.S. Iran embargo, and false statements in connection with their participation in conspiracies to illegally export electronics,
Global Positioning Systems (GPS) systems, and other dual-use commodities to Iran. All the items had potential military applications, including in the construction of Improvised Explosive Devices (IEDs). Among other things, the indictment alleges the defendants illegally exported to Iran 345 GPS systems and 12,000 Microchip brand microcontrollers.
These specific types of microcontrollers have been found in IEDs in Iraq
As part of the enforcement action, the Department of Commerce added 75 individuals and companies affiliated with this Iranian procurement network to its Entities list. This investigation was conducted by Commerce BIS, DCIS, ICE, and the Treasury Department’s Office of Foreign Assets Control (OFAC.)
BORIS GAVRILOV / D&B COMPAS LTD / KIFLET ARM
On Sept. 11, 2008, a grand jury in the Middle District of Pennsylvania indicted Boris Gavrilov, D&B Compas Ltd, and Kiflet Arm on charges of illegally exporting military-grade and dual-use rifle scopes to Russia without the required U.S. government licenses. Gavrilov is believed to be a resident of Israel. D&B Compas is located in Israel,
while Kiflet Arm is located in Humboldt, Texas. Extradition proceedings for Gavrilov have commenced. The investigation was conducted by ICE and BIS.
On Sept. 9, 2008, in the District of Columbia, a grand jury returned a five-count indictment against Siddabasappa Suresh, an Indian national, and Rajaram Engineering Corporation, an Indian corporation, on charges of illegally supplying the Government of India with controlled goods and technology without the required licenses.
According to the indictment, from 2001 to 2003, Suresh and Rajaram caused the illegal export of more than 100 controlled goods with an approximate value of $136,000. The indictment specifically identified six shipments to Vikram Sarabhai Space Centre (VSSC), which was within the Department of Space of the Government of India and responsible for research,
development, and production of India's space launch system. These activities encompassed both civilian spacecraft and ballistic missiles. All of these transactions involved complex electronic instruments used in high performance testing and monitoring essential in the research and development of launching systems,
including missile delivery systems. The investigation was conducted by the Department of Commerce BIS.
GEORGE FRANK MYLES, JR.
On Sept. 5, 2008, George Frank Myles, Jr. pleaded guilty to conspiring to illegally export military aviation parts without obtaining the permission of the State Department, in violation of the Arms Export Control Act. Myles was indicted for this offense on Sept. 6, 2007 in the Southern District of New York, and the case was transferred to the Southern District of Florida pursuant to Rule 21.
Myles was sentenced to 51 months imprisonment in November 2008. During the conspiracy, which spanned from April 2005 to March 2007, Myles supplied a number of military aviation parts, including F-14 parts, to an Iranian national, who allegedly picked up the parts in Dubai, United Arab Emirates and Bangkok, Thailand. On Nov. 7, 2008,
Defendant Myles was sentenced to 51 months imprisonment and 2 years supervised release This investigation was conducted by ICE.
NOE GUADALUPE CALVILLO / JUAN LUIS HERNANDEZ-RAMOS / GUADALUPE RAMIRO MUNOZ-MENDEZ / ROGELIO GARCIA
On Sept 5, 2008, Noe Guadalupe Calvillo, Juan Luis Hernandez- Ramos, Guadalupe Ramiro Munoz-Mendez and Rogelio Garcia were sentenced in the Southern District of Texas to 46 months in prison, 37 months in prison, 30 months in prison, and 39 months in prison, respectively, after pleading guilty to illegally exporting thousands of rounds of ammunition to Mexico. Calvillo pleaded guilty to illegally exporting 51,400 rounds of ammunition, while Garcia,
Hernandez-Ramos and Munoz-Mendez pleaded guilty to exporting 30,900 rounds of ammunition. This investigation was conducted by ICE.
MYTHILI GOPAL
On Aug. 11, 2008, in the District of Columbia, Mythili Gopal was sentenced to four years’ probation and fined $5,000 after pleading guilty on Oct. 30, 2007 to one count of conspiracy to violate the International Emergency Economic Powers Act and the Arms Export Control Act. Gopal cooperated with the government against her co-conspirator, Parthasarathy Sudarshan,
who on June 16, 2008, was sentenced to 35 months in prison. Sudarshan, the owner of an international electronics company called Cirrus Electronics, pleaded guilty in March 2008 to conspiring to illegally export 500 controlled microprocessors and other electronic components to government entities in India that participate in the development of ballistic missiles,
space launch vehicles, and combat fighter jets. Among the recipients of the U.S. technology were the Vikram Sarabhai Space Centre and Bharat Dynamics, Ltd., two Indian entities involved in ballistic missile production, as well as the Aeronautical Development Establishment, which is developing India's Tejas fighter jet.
Sudarshan was one of four defendants indicted in the case on March 8, 2007. Sudarshan and Gopal were arrested in South Carolina on March 23, 2007. The other two defendants, Akn Prasad and Sampath Sundar remain at large. Court documents in the case indicate Sudarshan was working with an Indian government official located in Washington, D.C. as part of the conspiracy.
The investigation was conducted by the FBI, BIS, and ICE.
JAMES ANGEHR / JOHN FOWLER / ENGINEERING DYNAMICS, INC.
On Aug. 7, 2008, James Angehr and John Fowler, the owners of Engineering Dynamics, Inc. were sentenced to five years probation, fined $250,000 and ordered to forfeit $218, 583. On April 24, 2008, both pleaded guilty to a one-count information charging them with conspiring to violate the International Emergency Economic Powers Act in connection with a plot to export controlled engineering software to Iran.
Engineering Dynamics, Inc, was a Louisiana company that produced software to design offshore oil and gas structures. As part of the case, on May 22, 2008, in the Eastern District of Louisiana, Nelson S. Galgoul, a resident of Brazil and the director of Suporte, a Brazilian engineering company, was sentenced to 13 months in prison for violating the International Emergency Economic Powers Act. Galgoul pleaded guilty on Aug. 2, 2007,
to exporting and attempting to export controlled engineering software to Iran without the required U.S. authorization. Galgoul was charged in May 2007. He acted as an agent for Engineering Dynamics, Inc. in the marketing and support of this software and trained users of the software in Iran. As part of the same case.
The investigation was conducted by ICE, BIS and FBI.
ALLIED TELESIS LABS, INC.
On July 28, 2008, Allied Telesis Labs, Inc. was sentenced in the Eastern District of North Carolina to a $500,000 criminal fine and was placed on probation for two years. The company pleaded guilty on March 18, 2008, to conspiracy to violate the International Emergency Economic Powers Act as part of a scheme to land and execute a $95 million contract with the Iranian Information Technology Company to rebuild the telecommunications systems of 20 Iranian cities.
The company was first charged via criminal information on Jan. 23, 2008. The investigation was conducted by BIS. Euro Optics Inc. On July 24, 2008, Euro Optics Inc., was sentenced in the Middle District of Pennsylvania to a $10,000 corporate fine, $800 special assessment, and five years of corporate probation after pleading guilty on March 17, 2008 to illegally exporting advanced combat gun sights to Sweden and Canada without the required licenses.
Euro Optics was charged via criminal information on Oct. 5, 2007. This investigation was conducted by ICE and Department of Commerce BIS.
CRYOSTAR SAS
On July 17, 2008, Cryostar SAS, formerly known as Cryostar France, a corporation headquartered in France, was sentenced in the District of Columbia to a criminal fine of $500,000 and corporate probation of two years. On April 11, 2008, the company pleaded guilty to conspiracy, illegal export, and attempted illegal export of cryogenic submersible pumps to Iran without a license. Cryostar specialized in the design and manufacturing of cryogenic equipment, such as pumps, that are used to transport and process natural gases at extremely cold temperatures.
The company was charged on March 24, 2008. The investigation was conducted by BIS.
AIR SHUNT INSTRUMENTS, INC.
On July 17, 2008, in the Central District of California, Air Shunt Instruments, Inc., was sentenced to pay a criminal fine of $250,000 and a special assessment of $400 for making false statements on Shipper's Export Declaration in claiming that a military gyroscope being sent overseas in 2003 did not require an export license, when in fact the item required such a license. Air Shunt, a Chatsworth, California company that buys and sells aircraft and aerospace components, was charged via criminal information and pleaded guilty on July 15, 2008.
John Nakkashian, a Vice President for International Sales at Air Shunt, was responsible for obtaining the required licenses for such exports. During the investigation, Nakkashian fled the country and remains a fugitive today. On May 20, 2008, Nakkashian was indicted on four counts of violating the Arms Export Control Act. The indictment alleges he illegally exported components for the J85 engine, used on the F-5 fighter jet, and other military items to Dubai, United Arab Emirates, without first obtaining the required export license from the State Department.
The indictment also alleges that he illegally exported a military gyroscope to Thailand. The investigation was conducted by DCIS and ICE.
PLATTE RIVER ASSOCIATES
On July 15, 2008, Platte River Associates, a Colorado company, was charged in U.S. District Court in Denver by Information for trading with the enemy. The president of Platte River Associates, Jay E. Leonard, was charged in separate Information on July 15, 2008, for unauthorized access of a protected computer. According to the Platte River Associates Information, on or about October 2000, the corporation allegedly provided specialized technical computer software and computer training,
which was then used to create a model for the potential exploration and development of oil and gas within the territorial waters of Cuba, without first having obtained a license. This case was investigated by ICE. In the second case, Leonard allegedly used a wireless network connection at Houston International Airport to access a password protected computer website server located in Georgia, belonging to Zetaware Inc., a Texas Corporation.
The Information charges that the unauthorized information obtained by the defendant was done by means of interstate commerce. On Oct. 3, 2008, Platte River Associates pleaded guilty to violating the Trading with the Enemy Act and was sentenced on Sept. 14, 2009, to a $400 assessment, and a fine of $14,500. On Oct. 2, 2008, Leonard pleaded guilty to unauthorized access to a protected computer and was sentenced on Dec. 15, 2008 to one year probation.
This case was investigated by the FBI.
XIAODONG SHELDON MENG
On June 18, 2008, Xiaodong Sheldon Meng was sentenced in the Northern District of California to 24 months in prison, three-years of supervised release, and a $10,000 fine for committing economic espionage and violating the Arms Export Control Act. Meng pleaded guilty in August 2007 to violating the Economic Espionage Act by misappropriating a trade secret used to simulate motion for military training and other purposes, with the intent to benefit China's Navy Research Center in Beijing.
He also pleaded guilty to violating the Arms Export Control Act for illegally exporting military source code involving a program used for training military fighter pilots. Meng was the first defendant in the country to be convicted of exporting military source code pursuant to the Arms Export Control Act. He was also the first defendant to be sentenced under the Economic Espionage Act. Meng was charged in a superseding indictment on Dec. 13, 2006. The investigation was conducted by FBI and ICE.
CVC SERVICES
On June 9, 2008, CVC Services was sentenced in the Central District of California to a fine of $51,000 and five years probation for illegal transactions with Iran. In March 2008, the company pleaded guilty to selling to Iran valves that turn gas and oil pipelines on and off without a license. The company was charged on Jan. 31, 2008. The National Iranian Oil Company had sought the valves. This investigation was conducted by BIS.
WAVELAB, INC.
On June 6, 2008, WaveLab, Inc. of Reston, Virginia, was sentenced in the Eastern District of Virginia to one year of supervised probation and a $15,000 fine, together with $85,000 in forfeiture previously ordered, for the unlawful export of hundreds of controlled power amplifiers to China. The exported items, which have potential military applications, are controlled and listed on the Commerce Control List for national security reasons. Wave Lab purchased these items from a U.S. company and assured the company that the products would not be exported from the United States, but would be sold domestically.
WaveLab pleaded guilty on March 7, 2008 to a criminal information filed the same day. The investigation was conducted by BIS and ICE.
AFSHIN REZAEI
On May 15, 2008, Afshin Rezaei was sentenced in the Northern District of Georgia to six months' imprisonment and agreed to forfeit $50,000. Rezaei pleaded guilty on April 24, 2008 to one count of violating the International Emergency Economic Powers Act for the unlicensed export of computers to Iran via the United Arab Emirates. The computers were controlled for anti-terrorism reasons. Rezaei was indicted on Nov. 14, 2007. The investigation was conducted by BIS and ICE.
MOHAMMAD MAYSSAMI / SUPER MICRO COMPUTER, INC
On April 28, 2008, Mohammad Mayssami was sentenced in the Northern District of California to two years probation, a $10,000 fine and 160 hours of community service for his role in financing illegal exports to Iran. On Dec. 17, 2007, Mayssami pleaded guilty to failing to report a suspicious transaction for his part in financing export transactions by Super Micro Computer, Inc. He was originally charged by information on Dec. 3, 2007. Super Micro pleaded guilty on Sept. 18, 2006 to illegally exporting motherboards controlled for national security reasons to Iran and was sentenced to pay a criminal fine of $150,000.,
and agreed to pay an administrative fine of $125,400 to settle charges for related transactions. Super Micro was first charged on Sept. 1, 2006. The case was conducted by BIS.
PETER SPITZ
On April 8, 2008, Peter Spitz, a resident of Hallandale, Fla., and the owner of Russian Aircraft Services LLC, was arrested in Miami pursuant to a criminal complaint alleging that he conspired to sell seven MI-24 Russian attack helicopters and three MI-8T Russian military transport helicopters to undercover law enforcement officials who represented that the helicopters would be going to a Cabinet member of the government of Zimbabwe. Spitz was charged in the Southern District of Florida with illegal arms brokering activities. Spitz pleaded guilty to count one of the indictment in the case on Sept. 12, 2008.
The investigation was conducted by ICE and DCIS.
CHI MAK
On March 24, 2008, Chi Mak, a former engineer with a U.S. Navy contractor, was sentenced in the Central District of California to 293 months (more than 24 years) in prison for orchestrating a conspiracy to obtain U.S. naval warship technology and to illegally export this material to China. Mak was found guilty at trial in May 2007 of conspiracy, two counts of attempting to violate export control laws, acting as an unregistered agent of the Chinese government, and making false statements.
The investigation found that Mak had been given lists from co-conspirators in China that requested U.S. Naval research related to nuclear submarines and other information. Mak gathered technical data about the Navy’s current and future warship technology and conspired to illegally export this data to China. Mak’s four codefendants (and family members) also pleaded guilty in connection with the case. On April 21, 2008, Chi Mak's brother, Tai Mak, was sentenced to 10 years imprisonment pursuant to a June 4, 2007,
plea agreement in which he pleaded guilty to one count of conspiracy to export defense articles. On Oct. 2, 2008, Chi Mak's wife, Rebecca Chiu, was sentenced to 3 years in prison for her role in the plot. On Oct. 1, 2008, Fuk Heung Li was sentenced to 3 years probation. On Sept. 24, 2007, Yui Mak was sentenced to 11 months imprisonment. The investigation was conducted by FBI, NCIS, and ICE.
PROCLAD INTERNATIONAL PIPELINES, LTD
On March 14, 2008, Proclad International Pipelines, Ltd, a British corporation headquartered in Scotland, was sentenced in the District of Columbia to a criminal fine of $100,000 and corporate probation of five years for attempting to export from the United States to Iran via the United Kingdom and United Arab Emirates specialty alloy pipes without an export license from the U.S. government. Proclad pleaded guilty to one count of attempted export without an export license on Nov. 30, 2007 after being charged via information on Oct. 16, 2007.
The investigation was conducted by ICE and BIS.
MTS SYSTEMS CORP
On March 12, 2008, MTS Systems Corp, of Eden Prairie, Minnesota, pleaded guilty in the District of Minnesota to two misdemeanor counts and was sentenced to two years probation and a $400,000 fine for submitting false export license applications to the Department of Commerce in connection with the proposed shipment of seismic testing equipment with nuclear applications to an entity in India. MTS knew the end-user in India would likely use the seismic testing equipment for nuclear purposes, but, in its export applications to the Department of Commerce, MTS falsely certified that the equipment would be used only for non-nuclear purposes.
Commerce denied the export license. The company was charged on March 11, 2008. The investigation was conducted by BIS and ICE.
SEYED MAGHLOUBI
On March 10, 2008, Seyed Maghloubi was sentenced to three years and five months in prison in the Central District of California to attempting to illegally export goods to Iran. As part of his Aug. 27, 2007, plea agreement, Maghloubi admitted that he had plotted to illegally export as many as 100,000 Uzi submachine guns as well as night vision goggles to officials in Iran's government. According to the facts of the plea agreement, the defendant sought to have the weapons shipped from the U.S. to Dubai and later transported over the border to Iran. Maghloubi was first charged on June 1, 2007.
The investigation was conducted by the FBI and the Los Angeles Police Department.
MAZEN GHASHIM
On Feb. 14, 2008, Mazen Ghashim was sentenced in the Southern District of Texas to three years probation for violating the International Emergency Economic Powers Act and attempted export without a license. He was also ordered to forfeit computers and related equipment valued at $32,000. The violations occurred in February 2003 when Ghashim and his company KZ Results exported computers and related equipment to Syria without the required licenses. Ghashim was charged on Aug. 14, 2006, and pleaded guilty on Nov. 1, 2006. This investigation was conducted by BIS.
BERTRAND LALSINGH
On Feb. 8, 2008, Bertrand Lalsingh of Hollywood, Florida, pleaded guilty in the U.S. District Court for the Southern District of Florida, to exporting knowingly and willfully an EOTech 553 Holgraphic Weapon Sight, an item designated a — defense article in Category I of the U.S. Munitions List, from the United States to Germany, without having first obtained authorization from the U.S. Department of State.
Laslingh was later sentenced to 5 months in prison.
MOJTADA MALEKI-GOMI / BABAK MALEKI
On Feb. 8, 2008, in the District of Columbia, Mojtada Maleki-Gomi was sentenced to 18-months and a $200,000 fine for violating the U.S. embargo against Iran for conspiring to sell textile machinery to Iran. Maleki-Gomi's son, Babak Maleki, was sentenced on the same day to probation for making false statements. On Sept. 29, 2006, Maleki-Gomi, his son, and a third defendant, Shahram Setudeh Nejad, were indicted for conspiracy to violate the International Emergency Economic Powers Act and the Iranian Transactions Regulations, and for violation of the United States Iranian Embargo. On November 19, 2007,
Maleki-Gomi pled guilty to the conspiracy charge and his son Babar Maleki pled guilty to superseding information charging him with making false statements.
GREEN SUPPLY, INC.
On Jan. 22, 2008, Green Supply, Inc., was sentenced in the Eastern District of Missouri to two years probation, a $17,500 fine and an $800 special assessment after pleading guilty in Nov. 2007 to export control violations involving the illegal export of controlled night vision systems. The company was charged via information on Nov. 2, 2007. The investigation was conducted by ICE and BIS.
Gary Roach / Laron Frazier / Nedson Jeanovil
On Jan. 11, 2008, in the Southern District of Florida, defendants Gary Roach and Laron Frazier were convicted on international firearms trafficking charges. The defendants were charged on July 26, 2007, for their role in a scheme in which they used straw purchasers to obtain handguns in Florida, Alabama, and Georgia. They then smuggled the guns to Canada in the door panels of rental cars. On March 28, 2008, Gary Roach was sentenced to 135 months imprisonment, while Laron Frazier was sentenced to 108 months imprisonment. On March 13, 2008, another defendant in the case, Nedson Jeanovil,
was sentenced to 51 years imprisonment. This case was investigated by the ATF and ICE.
On Dec. 19, 2007, Ding Zhengxing, Su Yang and Peter Zhu were indicted in the Western District of Texas for Arms Export Control Act violations in connection with an alleged plot to purchase and illegally export to China amplifiers that are controlled for military purposes. The amplifiers are used in digital radios and wireless area networks. Zhengxing and Yang were arrested in January 2008 after they traveled to Saipan to take possession of the amplifiers. Peter Zhu, of Shanghai Meuro Electronics Company Ltd., in China, remains at large. On July 1, 2009, Zhengxing was sentenced to 46 months imprisonment.
He pled guilty on October 17, 2008, to count 1 of the second superseding indictment. The case was investigated by ICE.
ANDREW FREYER / SHARON DOE
Andrew Freyer was convicted on December 17, 2007, in the U.S. District Court for the Central District of California, of five counts of violating the International Emergency Economic Powers Act and one count of conspiracy involving exporting, re-exporting, selling, and supplying valves from the United States to Iran, through Australia, without first obtaining the required U.S. authorization. On Dec.17, 2007, Freyer was sentenced to 17 months imprisonment. On Oct. 15, 2007, Sharon Doe, Inside Sales Manager for Crane Pacific Valves in California, was sentenced to three years probation after pleading guilty in Jan. 18, 2007 for her role in the export of petrochemical valves to Iran and Iraq through Australia in order to avoid the Export Administration Regulations.
Both Freyer and Doe were charged on Dec. 1, 2006. This investigation was conducted by BIS.
JERRI STRINGER
On Dec. 11, 2007, Jerri Stringer was sentenced to 48 months of imprisonment and three years of supervised release in the Northern District of Florida after pleading guilty to several violations in connection with a conspiracy with her son, former U.S. Air Force Staff Sgt. Leonard Allen Schenk, to steal restricted military night vision goggles, aviation helmets, and other equipment from the Air Force and sell them to overseas buyers. On Dec. 6, 2007, Schenk was sentenced to 235 months of imprisonment and three years of supervised release after pleading guilty to a 21-count indictment alleging the sale of stolen military equipment overseas and attempting to hire an undercover agent to kill a potential government witness.
Schenk and Stringer were charged in the superseding indictment brought on Aug. 21, 2007. This investigation was conducted by ICE.
PHILIP CHENG
On Dec. 3, 2007, Philip Cheng was sentenced in the Northern District of California to two years in prison and ordered to pay a $50,000 fine for his role in brokering the illegal export of a night vision camera and its accompanying technology to China in violation of federal laws and regulations. Mr. Cheng pleaded guilty on Oct. 31, 2006, to brokering the illegal export of Panther-series infrared camera,
a device which makes use of — night vision technology. He was indicted on June. 3, 2004. The technology used in the device was controlled for national security reasons by the United States Department of State. The case was the result of a joint investigation by ICE, the FBI, the Department of Commerce, and the IRS.
WORLD ELECTRONICS, INC
On Nov. 30, 2007, Murray Rinzler and his company World Electronics, Inc, were sentenced in the District of Connecticut to a criminal fine of $20,000 after pleading guilty on March 26, 2007 to charges that they conspired to violate the Arms Export Control Act by sending F-14 fighter jet components and other military items to Germany. Rinzler was also sentenced to two years probation.
Both defendants were charged via information on March 26, 2007. This investigation was conducted by ICE, DCIS and BIS.
YOUSEF BOUSHVASH / GLASGOW INTERNATIONAL LLC
On Nov. 20, 2007, a grand jury in the Southern District of New York returned an indictment charging Yousef Boushvash with violating the Arms Export Control Act, smuggling, conspiracy to commit money laundering and other violations in connection with his alleged acquisition of F-14 military fighter jet components and other military parts from the United States for export to Iran. The grand jury later returned two superseding indictments against Boushvash adding new offenses. According to the charges, Boushvash operated a company in Dubai, United Arab Emirates,
called Glasgow International LLC which served as a hub for his illegal arms deals. Boushvash and his coconspirators allegedly contacted numerous suppliers in the U.S. via e-mail and had them illegally export military components to the UAE, Thailand, and other locations, for ultimate transshipment to Iran. Boushvash had been arrested by Hong Kong authorities on Oct. 29, 2007 in Hong Kong pursuant to a provisional warrant issued by the Southern District of New York. The Justice Department commenced extradition proceedings to bring Boushvash to New York.
On April 11, 2008, days before the extradition hearing was scheduled to begin in Hong Kong, authorities in Hong Kong terminated the proceeding and released Boushvash from custody. Boushvash currently is a fugitive from justice and has been placed on Interpol’s list of wanted suspects. Three of Boushvash’s U.S. suppliers have been convicted in related cases. Lawrence Davis and Gwendolyn Douglas and George Frank Myles Jr. have all pleaded guilty in the Southern District of New York. This investigation was conducted by ICE and DCIS.
ROBERT CALDWELL
On Nov. 9, 2007, in the Western District of Texas, Robert Caldwell was sentenced to 20 months in prison and two years supervised release for attempting to illegally export to Iran specialized batteries for the Hawk Air Defense Missile system. Caldwell, along with co-defendants, Robert Gibson and Christopher Harold Tappin, were charged for their roles in the export plot on Feb. 2, 2007. Gibson later pleaded guilty and was sentenced on Aug. 24,
2007 to serve a two-year prison term. Tappin is in the United Kingdom fighting extradition to the United States. The case was investigated by ICE.
GO-TRANS (NORTH AMERICA) INC.
On Oct. 24, 2007, Roger Unterberger, Muhammad Bhatti, and Go-Trans (North America) Inc., three defendants involved with the investigation of Go-Trans (North American) Inc., were sentenced in the Northern District of Illinois after pleading guilty on Aug. 20, 2007 to making false statements in connection with the attempted export of pipe cutting machines to Iran via Germany. All were charged by criminal information on Aug. 1, 2007. In addition, on July 31, 2007,
Mohammed Meshkin was indicted on one count of violating the International Economic Emergency Powers Act in connection with the case. The investigation was conducted by BIS and ICE.
THERESA CHANG
On Oct. 11, 2007, Theresa Chang was sentenced in the Northern District of California to three years probation and to pay a $5,000 criminal fine. One June 21, 2007, Chang pleaded guilty to one count of making false statements related to the export of nickel powder controlled for nuclear proliferation reasons to Taiwan without an export license. The investigation was conducted by BIS.
SAIED SHAHSAVARANI / TAK COMPONENTS
On Oct. 11, 2007, Saied Shahsavarani, President of Tak Components, Inc. was sentenced in the Northern District of Illinois to three years probation and a $1,000 criminal fine after pleading guilty on June 14, 2007 to one count of aiding and abetting the operation of an unlicensed money transmitting business. Also, on Oct. 11, 2007 Tak Components was sentenced to one year probation and to forfeit $38,016. On June 14, 2007, Tak Components pleaded guilty to 16 counts of violating the International Emergency Economic Powers Act. Tak Components illegally exported a variety of equipment to Iran,
falsely claiming they were destined for the United Arab Emirates. Both defendants were charged on June 6, 2007. This investigation was conducted by ICE and BIS.
ABRAHAM TRUJILLO / DAVID WAYE
On Oct. 5, 2007, Abraham Trujillo and David Waye of Ogden, Utah, were charged in the District of Utah with attempting to illegally export components for F-4 and F-14 fighter jets using the Internet. According to the charges, the defendants attempted to illegally export military cable assemblies, wiring harnesses and other restricted components to Canada in 2006 and 2007. Such exports are of particular concern because F-14 components are widely sought by Iran, which is currently the only nation in the world that still flies the F-14 fighter jet. On Feb. 17, 2009, a forfeiture judgment was entered as to Abraham Trujillo for $44,474.50. He pleaded guilty on November 6, 2008 to Count 2 of a felony information and was sentenced on Dec. 16, 2008, to 36 months probation. On Nov. 14, 2008,
Defendant Waye was sentenced to 36 months probation after pleading guilty on Nov. 6, 2008 to count 2 of a Felony Information. The investigation was conducted by ICE and DCIS.
SPARESGLOBAL, INC.
On Oct. 4, 2007, SparesGlobal,Inc., a Pittsburgh company, was sentenced to pay a $40,000 criminal fine in the Western District of Pennsylvania for conspiring to falsify documents and make false statements about a 2003 illegal export to the United Arab Emirates (UAE) that ultimately ended up in Pakistan. According to court documents, SparesGlobal exported to a trading company in the UAE restricted graphite products that can be used in nuclear reactors and in the nose cones of ballistic missiles. The graphite products were routed to Pakistan. After the shipment, the company attempted to mislead federal investigators when questioned about the shipment and related documents. On July 7, 2007, SparesGlobal, represented by its President,
Om Sharma, pleaded guilty. The company was charged via information on April 23, 2007. The investigation was conducted by BIS.
FUNG YANG / EXCELLENCE ENGINEERING ELECTRONICS, INC.
On Aug. 1, 2007, Fung Yang, the president of Excellence Engineering Electronics, Inc., pleaded guilty in the Northern District of California to a charge of illegally exporting controlled microwave integrated circuits to China without the required authorization from the Department of Commerce.
Yang was charged by information on July 31,2007. The investigation was conducted by BIS and the FBI.
RAHMAT ABDHIR
On Aug. 1, 2007, Rahmat Abdhir was indicted in the Northern District of California on charges of conspiracy to provide material support to terrorists, providing material support to terrorists, and contributing goods and services to a Specially Designated Global Terrorist. According to the indictment, Rahmat Abdhir communicated frequently with Zulkifli Abdhir, his fugitive brother and a U.S.-specially designated terrorist who operates in the Philippines and is a member of the central command of Jemaah Islamiyah.
From his home in California, Rahmat allegedly sent his brother money, two-way radios, Colt .45 magazines, binoculars, rifle scopes, batteries and other materials, even as his brother evaded capture and battled Philippine troops. Zulkifli Abdhir was charged in the same indictment with conspiracy to provide material support to terrorists and providing material support to terrorists. The investigation was conducted by the FBI and ICE.
ALI KHAN / TURBOANALYSIS
On July 30, 2007, Ali Khan, the owner of TurboAnalysis in Phoenix, AZ, was sentenced in the Eastern District of New York to five years probation, a $1.4 million forfeiture,
and $100,000 criminal fine in connection with his role in a conspiracy to illegally export aircraft components to Iran. This investigation was conducted by BIS and ICE.
REZA TABIB / TERRI TABIB
On May 8, 2007, Reza Tabib was sentenced to 24 months in prison in the Central District of California to violating the International Emergency Economic Powers Act in connection with his efforts to illegally export military aircraft parts to Iran via associates in Germany and the United Arab Emirates. In 2006, federal agents intercepted maintenance kits for the F-14 fighter jet that Tabib and his wife, Terri Tabib, had sent to Iran. His wife Terri pleaded guilty on Dec. 14, 2006.
She was sentenced to 2 years probation on March 26, 2007. The investigation was conducted by ICE and DCIS.
LOGICACMG INC.
On April 25, 2007, LogicaCMG Inc.,pleaded guilty in the District of New Hampshire and was sentenced to pay a $50,000 criminal fine for illegally causing goods to be exported to Cuba. In 2001, LogicaCMG’s predecessor company, CMG Telecommunications, exported telecommunications equipment controlled for national security reasons to Cuba via Panama without the required export license.
The company was charged by information on March 30, 2007. This case was investigated by ICE and BIS.
ELECTRO-GLASS PRODUCTS
On April 19, 2007, a jury in the Western District of Pennsylvania convicted Electro-Glass Products, a Pennsylvania company, of violating the Arms Export Control Act. Evidence at trial established that Electro-Glass illegally exported 23,000 solder glass performs, which are components of military night vision equipment, to a company in India without the required State Department license. On July 13, 2007, Electro-Glass Products was sentenced to 2 years probation,
a fine of $20,000 and a special assessment of $1,600. The company was indicted on April 5, 2006. The investigation was conducted by ICE.
ANDREW HUANG
On April 10, 2007, Andrew Huang, the owner of McAndrew’s, Inc, an international export company, pleaded guilty in the District of Connecticut to one count of making false statements to the FBI. Huang was charged in 2006 with operating as a representative for the Chinese Electronic System Engineering Corporation, the technology procurement arm of the government of China. According to court documents, Huang allegedly helped broker the illegal sale and transfer of millions of dollars worth of telecommunications equipment from China to Iraq between 1999 and 2001.
Huang was sentenced to 2 years probation and a $5,000 fine. The investigation was conducted by the FBI, ICE, NCIS, IRS and BIS.
On January 6, 2003, Silicon Graphics, Inc. (SGI) of Mountain View, California pled guilty to two felony charges that it violated Commerce Department regulations by illegally exporting high performance computers to a Russian nuclear laboratory in 1996. SGI agreed to pay a $1 million criminal fine to resolve the charges. In a related administrative case, SGI agreed to pay $182,000 to settle civil charges arising from the same exports to the Russian nuclear laboratory, as well as additional charges relating to illegal computer exports to Israel and for failure to meet reporting requirements for exports to China, Qatar,
and the United Arab Emirates. The $182,000 was the maximum civil penalty for the charges that BIS had proposed to bring against SGI. As part of the settlement of the criminal charges, SGI admitted that, on two occasions in 1996, the company exported four Challenge L computer systems, upgrades, and peripheral equipment to the All-Russian Institute for Technical Physics (Chelyabinsk-70) in violation of the U.S. export control regulations. Chelyabinsk-70, located in Snezhinsk, Russia, is a nuclear laboratory operated by Russia's Ministry of Atomic Energy and is engaged in research, development, testing,
and maintenance of nuclear devices. In addition to the monetary penalties, the civil settlement agreement provided that SGI's exporting privileges to Russia will be ddenied fora period of three years. The denial of export privileges will be suspended providing that SGI does not commit any export control violations involving Russia during the suspension period. SGI also agreed to limitations on its use of license exception CTP and to additional reporting requirements.
On December 10, 2002, the Commerce Department imposed a $44,000 penalty and a two year denial of export privileges on Realtek Semiconductor Corporation (Realtek), Hsinchu, Taiwan, to settle allegations that he company violated the Export Administration Regulations (EAR). An investigation by the Boston Field Office revealed that on or about December 11, 1996, Realtek purchased commercial air-conditioning equipment from a U.S. manufacturer, in violation of a five year Denial Order issued against Realtek on August 3, 1995. Additional investigation disclosed that on or about December 6, 1999, Realtek attempted to purchase U.S. origin computer software, by signing a Master Software Licensing Agreement, and a Master Software Maintenance Agreement with a Massachusetts based corporation. At the time of these violations, Realtek was also subject to the denial order,
and as a result, could not receive U.S. origin commodities or enter into a purchase agreement to purchase U.S. origin commodities.
STURM, RUGER AND COMPANY,INC.
On November 8, 2002, the Commerce Department imposed a civil penalty of $11,000 on Sturm, Ruger and Company, Inc., Southport, Connecticut, to settle an allegation that the company exported rifle scopes to Oman, without the required export license.
At the time, the scopes were controlled for export under ECCN 0A985 for Crime Control reasons.
SIGMA-ALDRICH CORPORATION
On November 4, 2002, the Sigma-Aldrich Corporation, St. Louis, Missouri and two of its subsidiaries, agreed to pay a $1,760.00 civil penalty to settle charges involving the illegal export of biological toxins.
The settlement was reached after a significant legal ruling in the Commerce Department's favor by an administrative law judge adjudicating the dispute. The penalty is the largest imposed by the Commerce Department in a case involving biological toxins, and one of the largest penalties ever paid to the Department for export control violations.
The Department had instituted administrative enforcement actions against the Sigma-Aldrich companies alleging that a company they had acquired in 1997 had made unauthorized exports of controlled biological toxins to Europe and Asia on numerous occasions prior to the acquisition and had continued the unlicensed exports for more than a year after the acquisition. In a 15 page opinion,
an administrative law judge held that companies can be held liable for export control violations that have been committed by firms they acquired.
DIGITAL EQUIPMENT CORPORATION
On October 29, 2002 the Department of Commerce imposed a $39,000 civil penalty on Compaq Computer Corporation of Houston, Texas. The penalty was part of an agreement reached by the Department and Compaq to settle allegations that Digital Equipment Corporation now merged with and into Compaq, and two of its overseas subsidiaries violated U.S. export control laws in connection with the export of computers and computer equipment to various destinations in Asia, including the People's Republic of China (PRC).
The Department's Bureau of Industry and Security (BIS) alleged that Digital Equipment Corporation and its subsidiaries violated the Export Administration Regulations on ten occasions by exporting or reexporting computers and computer equipment without the required authorizations from BIS. Exports of these commodities were destined for South Korea. Reexports of the U.S.— origin goods were made from Hong Kong to the PRC and from Singapore to India.
HANS WRAGE & COMPANY
On August 29, 2002, the Department of Commerce imposed a $30,000 civil penalty on Hans Wrage & Co. (Wrage) of Hamburg, Germany, to settle allegations that Wrage violated U.S. export laws by reexporting U.S.-origin shotguns from Germany to Poland without the required authorization from the U.S. government. The Department's Bureau of Industry and Security (BIS) alleged that on three occasions between October 1996 and September 1998, Wrage shipped a total of 1,550 shotguns, originally acquired from a U.S. manufacturer, to Poland without obtaining the required authorization from BIS. At the time of the shipments,
U.S. Export Administration Regulations required a license for exports andreexports to Poland of shotguns with a barrel length of 18 inches but less than 24 inches.
THOMPSON/CENTER ARMS CO., INC.
The Department of Commerce has imposed a $25,000 civil penalty on Thompson/Center Arms Co., Inc. of Rochester, New Hampshire, on May 8, 2002 in settlement of allegations that the company exported rifle and pistol scopes from the United States without the required export licenses. The Bureau of Industry and Security (BIS) alleged that on five occasions in 1998, Thompson/Center Arms Co., Inc. exported rifle and pistol scopes to Argentina, the Czech Republic, and Switzerland without the export licenses required by the Export Administration Regulations. Thompson/Center Arms Co., Inc. has agreed to pay a civil penalty of $25,000 to settle these charges. Payment of $12,500 of the penalty was suspended and will be waived after one year, provided that the company does not commit any violations during that one-year period.
NORTH CENTRAL PLASTICS, INC. / WATERS INSTRUMENTS, INC.
On April 1, 2002 the Department of Commerce imposed a $186,000 civil penalty against Waters Instruments, Inc. of Minneapolis, Minnesota to resolve allegations that the company violated the Export Administration Regulations (EAR) on 31 occasions. The Department charged that, on 19 occasions between August 1996 and July 2000, North Central Plastics, Inc. — a company that subsequently merged with Waters Instruments, Inc. — exported electric cattle prods to Argentina, Honduras, Switzerland, Taiwan, Columbia, Ecuador, Ireland, and Mexico without the required export licenses.
The shipment of electric cattle prods to most destinations is subject to export licensing requirements for foreign policy reasons in order to promote the observance of human rights throughout the world. The Department also alleged that North Central Plastics committed 12 additional EAR violations by knowingly continuing transactions without an export license. Based upon the cooperation of Waters Instruments, Inc. with the investigation, BXA agreed to suspend $26,000 of the penalty. The suspended portion of the penalty will be waived after two years, provided that Waters Instruments, Inc. does not commit any violations of the EAR during the suspension period.
NEOPOINT, INC.
In February of 2002, the Bureau of Export Administration imposed a $95,000 civil penalty on Neopoint, Inc., of San Diego, California, to settle charges that on ten occasions between March 1998 and June 1999, the company exported 128-bit encryption software to South Korea without the requisite export licenses.
ELI COHEN
On January 30, 2002, the Commerce Department imposed a $10,000 civil penalty, and a five year denial of export privileges, on Eli Cohen of Haifa, Israel, pursuant to a settlement agreement. The Department's Bureau of Export Administration (BXA) had alleged that Cohen had concealed an illegal transfer of an infrared camera from BXA agents.
According to BXA's charging letter, Eli Cohen provided false and misleading information to Special Agents of BXA's Office of Export Enforcement concerning the camera's location when the agents sought to verify its end-use in Israel. The camera is capable of locating objects in day, night or adverse weather conditions, because of its ability to detect radiating heat. The camera was shipped to Israel under a BXA export license that authorized its use only by the company named on the license,
but was then illegally transferred. BXA controls the export of this type of camera for national security reasons because of its potential application in military surveillance.
BS&B PROCESS SYSTEMS
BS&B Process Systems Inc. settled charges that on or about April 15, 1996, on or about May 5, 1997, and on or about February 5, 1998, BS&B Process Systems, Inc. exported oil production equipment from the United States to Iran, through the United Kingdom, without obtaining the authorization it knew or had reason to know was required, thereby committing violations of Sections 764.2(a) and 764.2(e) of the Regulations, and that in connection with the export to Iran on or about May 5, 1997, BS&B Process Systems Inc. prepared a Shipper's Export Declaration stating that the ultimate destination of the export was the United Kingdom,
when in fact the ultimate destination was Iran, thereby making a false or misleading representation directly or indirectly to a U.S. Government agency in connection with the preparation of an export control document in violation of Section 764.2(g) of the Regulations, and that, in connection with the export to Iran on or about February 5, 1998, BS&B Process Systems, Inc. failed to prepare the required SED, thereby violating Section 764.2(g) of the Regulations. On January 17, 2002, BS&B Process Systems Inc.
was sentenced in federal court in Tulsa, Oklahoma for violating the International Emergency Economic Powers Act for making an unauthorized export to Iran. The company agreed to pay a criminal fine of $414,000 and a $400 special assessment. The company agreed to pay the Commerce Department an additional fine of $86,000 to settle administrative charges brought against it. The company also agreed that its export privileges would be suspended for three years, with all three years suspended provided it commits no further violations during this period. Black Sivalls & Bryson (UK) Ltd.,
a company affiliated with BS&B Process Systems Inc., also settled charges that on or about April 15, 1996, on or about May 5, 1997, and on or about February 5, 1998, Black Sivalls & Bryson (UK) Ltd., a United Kingdom corporation, received oil production equipment in the United Kingdom that it knew or had reason to know BS&B Process Systems, Inc., had exported from the United States without the required authorization, and forwarded the items to Iran, thereby violating Section 764.2(e) of the Regulations. On January 17, 2002, Black Sivalls & Bryson (UK) Ltd. was sentenced in federal court in Tulsa,
Oklahoma for violating the International Emergency Economic Powers Act, 50 U.S.C Appendix Section 1702 et seq, for making an unauthorized export to Iran. The company agreed to pay a criminal fine of $448,000 and a special assessment of $400. The company agreed to pay the Commerce Department an additional $52,000 to settle administrative charges brought against it. In addition, the company agreed that its export privileges would be denied for three years, with two years of the denial suspended provided the company commits no further violations during this period.
On December 28, 2001, the Commerce Department imposed a $210,000 civil penalty on Kaiser Aluminum & Chemical Corporation of Houston, Texas, to settle charges that it illegally exported sensitive items without Department of Commerce authorization. The agreement settled allegations that, between February 1996 and March 1999, Kaiser made 12 shipments of potassium fluoride to Jamaica and 10 shipments of high-strength aluminum rod to Israel and Taiwan without the required Department of Commerce export licenses. Potassium fluoride is a precursor for the production of toxic chemical agents.
High-strength aluminum rod can be used to manufacture equipment for the enrichment of uranium. The Department of Commerce controls the export of these items to prevent the proliferation of weapons of mass destruction. Kaiser voluntarily disclosed the unlicensed exports of potassium fluoride but not the shipments of the aluminum rod, and cooperated fully in the investigation. As part of the settlement, $45,000 of the penalty was suspended.
LION PRECISION
On December 20, 2001, the Commerce Department imposed a $52,500 civil penalty on Automated Quality Technology, doing business as Lion Precision, of Shoreview, Minnesota. The penalty settles allegations that the company illegally exported measuring probes on seven occasions between June 1996 and December 1997, to Singapore, Taiwan, and Thailand. A portion of the penalty, $42,500, was suspended for two years and will be waived, provided that the company does not commit any violations during this period. The probes that were exported were high performance devices, capable of precise measurements in the construction of military equipment.
The Commerce Department's Bureau of Export Administration controls the export of these items for nuclear nonproliferation and national security reasons.
MCDONNELL DOUGLAS
On November 14, 2001, the Department of Commerce imposed a $2.12 million civil penalty against McDonnell Douglas Corporation of St. Louis, Missouri, as part of a settlement of charges that the company violated federal export control laws. The penalty was the maximum fine possible for the alleged violations and was the second-largest civil fine ever imposed by the Commerce Department in an export control case. The Order imposing the penalty concluded a six-year investigation into exports of machine tools to China between 1994 and 1995.
The Department alleged that McDonnell Douglas submitted license applications containing false and misleading statements about the end-use and end-user of the machine tools. The Department also alleged that the exports violated the conditions of U.S. export licenses issued to the company. In addition to the civil penalty, the Order and settlement agreement require that McDonnell Douglas' parent company, The Boeing Company, assume responsibility and liability for all exports under the Commerce Department's jurisdiction made or to be made by McDonnell Douglas.
In a related case concluded in May 2001, the Department had imposed a $1.32 million civil penalty and a denial of export privileges on a group of Chinese government-owned companies and their U.S. affiliates that had received the machine tools from McDonnell Douglas.
DETECTOR ELECTRONICS
On November 8, 2001, the Commerce Department imposed a $15,000 civil penalty on Detector Electronics Corporation of Minneapolis, Minnesota. The penalty settled allegations that the company exported U.S.-origin ultraviolet fire detection systems to India on two occasions between November and December 1998, without the required Department of Commerce export licenses. The goods were exported to Bharat Heavy Electrical Limited, an organization on the Entity List. On May 5, 1997, BXA's Assistant Secretary for Export Enforcement issued a Temporary Denial Order (TDO) denying all U.S. export privileges of Thane-Coat, Inc., of Stafford, Texas;
its president, Jerry Vernon Ford; its vice-president, Preston John Engebretson; and two affiliates, Export Materials, Inc., of Stafford Texas, and TIC, Ltd., of Freeport, The Bahamas. BXA took this action based on evidence that, between 1994 and 1996, Thane-Coat, Inc., through Ford and Engebretson, and using Export Materials, Inc. and TIC, Ltd., made approximately 100 shipments of U.S.-origin pipe coating materials, machines, and parts valued at $35 million to Libya via the United Kingdom and Italy, without the authorizations required under U.S. law. BXA became aware of the shipments as a result of a joint investigation conducted by the Office of Export Enforcement's Dallas,
Texas Field Office, the U.S. Customs Service, and the U.S. Attorney's Office in Houston, Texas. The U.S. — origin commodities that were shipped to Libya were for coating the internal surface of prestressed concrete cylinder pipe for use in the Government of Libya's Great Man-Made River Project. This is a multi-phase, multi-billion dollar engineering endeavor designed to bring fresh water from wells drilled in southeast and southwest Libya to its coastal cities. The United States Government maintains a comprehensive economic sanctions program against the Government of Libya that prohibits virtually all commercial transactions involving U.S.-origin commodities or services of U.S. persons,
or both, with the Government of Libya, unless specifically authorized.
FLUOROWARE, INC., NOW OWNED BY ENTEGRIS, INC.
On October 22, 2001, the Commerce Department imposed a $496,000 civil penalty on Entegris, Inc., of Chaska, Minnesota. The Department had charged that, on 124 occasions between February 1996 and December 1998, Fluoroware, Inc., now owned by Entegris, Inc, exported diaphragm valves and components to the People's Republic of China, Israel, and Taiwan without the required Department of Commerce export licenses. The Department agreed to suspend $96,000 of the $496,000 penalty. Payment of the suspended amount will be waived after one year,
provided that Entegris does not violate either the Export Administration Act or the Export Administration Regulations or fail to meet other conditions of the Department's order imposing the civil penalty. The Department's Bureau of Export Administration controls the export of valves such as these and their components because of their ability to be used in the manufacture of chemical weapons.
THANE-COAT, INC. ET AL.
The respondents to the Administrative Law Judge for relief from the TDO but were unsuccessful. They then challenged the TDO in the U.S. District Court in Houston, Texas. The Court upheld the TDO. BXA renewed the TDO with certain modifications. On July 12, 1999, BXA's Under Secretary issued an order affirming the Administrative Law Judge's recommended decision and order of June 11, 1999. The Under Secretary imposed a 20-year denial of export privileges on two of Thane-Coat Inc.'s affiliates, Export Materials, Inc., of Stafford, Texas and TIC, Ltd., of Freeport, The Bahamas, for their involvement in the conspiracy. In a separate proceeding, BXA's Assistant Secretary for Export Enforcement renewed the TDO as to Thane-Coat, Inc.,
Jerry Vernon Ford, and Preston John Engebretson. This TDO was renewed periodically. On April 26, 2000, a federal grand jury in Houston, Texas, returned a 39-count criminal indictment against Thane-Coat, Inc., Jerry Vernon Ford, Preston John Engebretson, Eshbach Ltd., and TAM Ltd. The indictment against Thane-Coat, Inc., Ford, Engebretson, Eshbach Ltd., and TAM Ltd. charged the defendants with conspiracy, false statements, unauthorized exports, money laundering, and criminal forfeiture regarding the export of concrete pipe coating materials, spray machines and parts valued at over $20 million to the Great Man-Made River Project in Libya. On August 8, 2001, a superseding criminal information was filed by the U. S. Attorney's Office, Houston,
Texas charging Jerry Vernon Ford and Preston John Engebretson each with one count of violating the International Emergency Economic Powers Act (50 U.S.C. Appendix, Section 1701 et seq.) by making unauthorized exports to Libya. On October 11, 2001, Ford and Engebretson pled guilty in U.S. District Court to one count each of violating the International Emergency Economic Powers Act by exporting pipe coating materials to Libya. Ford and Engebretson each received three years probation and each was required to forfeit property that previously had been seized by the government and was valued at $800,000. In settlement of administrative charges, on January 24, 2002, BXA's Assistant Secretary for Export Enforcement imposed a $1.12 million civil penalty on Thane-Coat, Inc.
Thane-Coat's export privileges, as well as those of the company's president, Jerry Vernon Ford, and its vice-president, Preston John Engebretson, also were denied for a period of 25 years. BXA alleged that these parties committed 112 violations of the Export Administration Regulations, including conspiracy, failing to obtain the required BXA export licenses, and making false representations on Shipper's Export Declarations. Thane-Coat, Inc. was required to pay $600,000 of the penalty within 90 days of the date of the order. Payment of the remaining $520,000 was suspended for two years and will be waived provided that Thane-Coat does not commit any violations during the two year period.
ANSIMAG, INC., A SUBSIDIARY OF THE SUMNER CORPORATION
On September 19, 2001, the Commerce Department imposed a $75,000 civil penalty on The Sumner Corporation, of Evanston, Illinois. The penalty settled allegations that Ansimag, Inc., a subsidiary of The Sumner Corporation, had, between October 1995 and January 1998, illegally exported centrifugal pumps on 15 occasions to Israel and Taiwan. The Commerce Department's Bureau of Export Administration controls these specific centrifugal pumps because of their ability to be used in the development of chemical weapons.
PARS COMPANY, INC
On September 4, 2001, Pars Company, Inc. plead guilty to exporting two STX Gas Monitors to Iran through the United Arab Emirates without the required U.S. Department of Commerce license, in violation of the International Emergency Economic Powers Act. As a result of the plea, Pars Company, Inc. was ordered to pay a $10,000 criminal fine.
FJ TECHNOLOGY, INC.
On July 3, 2001, Zhongda "Mark" Jin and FJ Technology, Inc., of San Jose, CA were indicted for the illegal export and conspiracy to illegally export chemicals to the People's Republic of China. An Arrest Warrant has been issued for Zhongda Jin, who has fled the U.S. and is believed to be in the People's Republic of China. On July 31, 2001, the Commerce Department denied the export privileges of FJ Technology and Mark Jin also known as Zhongda Jin for a period of 25 years.
SAEED HOMAYOUNI/YEW LENG FUNG/MULTICORE, INC.
On June 11, 2001, Saeed Homayouni and Yew Leng Fung, officials of Multicore, Inc. of Bakersfield, California, pleaded guilty in U.S. District Court, in San Diego in connection with the firm's purchase of commercial and military aircraft parts and missile components, for export to Iran. Homayouni pleaded to a charge of conspiracy to violate the Arms Export Control Act and the International Emergency Economic Powers Act. Fung pleaded guilty to misprision of a felony. On September 4, 2001, Homayouni was sentenced to two years imprisonment and Fung was sentenced to time served (ten months). Fung was transferred to the custody of the Immigration and Naturalization Service to begin deportation proceedings.
IMMEDIATE CUSTOMS SERVICE INC.
On June 6, 2001, the Commerce Department imposed a $30,000 civil penalty against Immediate Customs Service Inc., an international freight forwarder and customs broker. The civil penalty was based on a finding that on four occasions, Immediate Customs Service engaged in export transactions with a person whose U.S. export privileges had been denied. The denied person, Cosmotrans AG, was a Swiss based customs broker that had its export privileges denied for 20 years in 1988 based on a Department of Commerce finding that it illegally diverted electronic test equipment, controlled for national security reasons, to the former Soviet Union. The penalty on Immediate Customs Service was imposed after a hearing before an administrative law judge and review by the BXA Under Secretary.
The Under Secretary ordered that Immediate Customs pay $10,000 of the fine and suspended payment of the remaining $20,000.
OPTO POWER
On May 22, 2001, the Commerce Department imposed a $80,000 civil penalty ($40,000 suspended) on Opto Power Corporation of Tucson, Arizona. Opto Power paid the penalties as part of a settlement of charges that it illegally exported diode lasers to Israel between 1995 and 1997 on sixteen separate occasions.
UCAR INTERNATIONAL, INC.
On May 22, 2001, the Commerce Department imposed a $237,000 civil penalty on UCAR International, Inc., of Nashville, Tennessee. The penalty settles allegations that the company illegally exported ATJ grade graphite to various foreign countries over a period of two years. The Commerce Department's Bureau of Export Administration controls ATJ grade graphite because of its usage in rocket nozzles and reentry vehicle nose tips.
TAL INDUSTRIES, INC.
On May 11, 2001, criminal and civil sanctions were imposed on TAL Industries, Inc., a wholly owned subsidiary of the China National Aero-Technology Import and Export Corporation (CATIC), a People's Republic of China (PRC) government owned corporation. TAL entered a plea of nolo contendere to a felony violation of the Export Administration Act for making false and misleading statements in connection with an application submitted by the McDonnell Douglas Corporation (MDC) and CATIC for a license to export machine tools to the PRC. Pursuant to the plea,
TAL was sentenced to pay a criminal fine of $1 million and to the maximum 5-year period of corporate probation. TAL and related Chinese entities were indicted by a federal grand jury in October 1999. TAL's plea marks the first time in U.S. history that a corporate entity, wholly owned by the PRC, has waived sovereign immunity and been convicted of a criminal offense against the United States. In addition, the Commerce Department imposed a $1.32 million fine and denied TAL's export privileges for a period of 10 years. CATIC, CATIC USA, and CATIC Supply were denied export privileges for a period of five years,
all of which were suspended provided that they comply with the terms of the denial order and do not violate the Export Administration Act or Regulations during the denial period. Further CATIC, CATIC USA, CATIC Supply, and TAL agreed to cooperate with the Commerce Department in any other administrative proceedings related to the export of the machine tools to China.
DOW BENELUX N.V.
On May 9, 2001, the Commerce Department imposed a $30,000 civil penalty on Holland- based Dow Benelux N.V., a wholly-owned subsidiary of Dow Chemical Company. The Commerce Department alleged that Dow Benelux N.V. reexported U.S.-origin triethanolamine to the Ivory Coast and Turkey without obtaining the required authorizations. Dow Benelux N.V. neither admitted nor denied the allegations, but agreed to pay a $30,000 civil penalty, $10,000 of which was suspended. Payment of the suspended amount will be waived at the end of one year, provided that Dow Benelux N.V. does not violate the Export Administration Act or Regulations during that period. Dow Benelux N.V. voluntarily disclosed the violations.
Special Agents from the Commerce Department's Office of Export Enforcement Chicago Field Office investigated the case.
OPTICAL ASSOCIATES, INC.
On April 26, 2001, the Commerce Department denied the export privileges to India of Optical Associates, Inc., of Milpitas, California, for the illegal export of semiconductor manufacturing equipment to India. Optical Associates also received a criminal fine of $100,000 and was placed on two years probation by the U.S. District Court for the Northern District of California. On March 7, 2001, Optical Associates pled guilty in district court to illegally exporting the equipment to the Bhaba Atomic Research Center, a division of India's Department of Atomic Energy, without the required Department of Commerce license. On March 15, 2001, the Department of Commerce denied Optical Associates its U.S. export privileges to India for three years.
QUEST TECHNOLOGIES, INC.
On April 26, 2001, the Commerce Department imposed a $225,000 civil penalty on Wisconsin based Quest Technologies, Inc., for exporting chlorine and sulphur dioxide gas sensors to Vietnam, Taiwan, India, the United Arab Emirates, Egypt, and Saudi Arabia, on 45 separate occasions between January 1997 and March 2000, without obtaining Department of Commerce licenses as required. The Department agreed to suspend $135,000 of the $225,000 penalty. Payment of the suspended amount will be waived at the end of the year, provided that Quest Technologies, Inc., does not violate either the Export Administration Act and the Export Administration Regulations or fail to meet other conditions of the Department order imposing the civil penalty.
Special Agents from the Commerce Department's Chicago Office of Export Enforcement investigated the case.
REFINERY INDUSTRIES, INC.
On March 12, 2001, criminal and civil sanctions were imposed on Refinery Industries, Inc., of Budd Lake, New Jersey, for attempted exports of gas detection equipment to Iran. The company received five years probation from Judge Dickenson R. Debevoise of the U.S. District Court in Newark, New Jersey. As part of the plea agreement in the criminal case, the company agreed to forfeit the seized 195 units of methane gas detectors to the U.S. government. The Commerce Department imposed a $22,000 civil penalty against Refinery Industries, Inc., and denied the export privileges of the company and its president, Mahmood Reza Hashemi, for a period of ten years, five years of which were suspended. The Commerce Department alleged that between May 1998 and August 1998, Refinery Industries, Inc.,
attempted to export illegally gas detection equipment to Iran. The Commerce Department's New York office of Export Enforcement investigated the case.
LIFE TECHNOLOGIES, INC.
On February 28, 2001, the Commerce Department imposed a $230,000 civil penalty on Life Technologies, a Division of Invitrogen Corporation (Life Technologies, Inc.) of Rockville, Maryland, to settle allegations that the company illegally exported biotoxins to Australia, Belgium, Germany, Hong Kong, Japan, Peru, and the United Kingdom. The Department alleged that on 46 separate occasions in 1995 and 1996, Life Technologies, Inc., exported alpha-toxin and microcystin without the required licenses. The toxins are controlled because they can be used in the development or production of chemical and biological weapons. Life Technologies voluntarily disclosed the violations to the Department and cooperated fully in the investigation.
As part of the settlement, $100,000 of the penalty was suspended. Commerce's Office of Export Enforcement Washington Field Office investigated the case.
On October 23, 2000, the Commerce Department imposed a $40,000 civil penalty on Worchell Transport, Inc., doing business as Prime Transport, a freight forwarder and customs broker, in Springfield Garden, New York. The civil penalty resolved allegations that on eight separate occasions Prime Transport engaged in export transactions with a person whose U.S. export privileges had been denied. In this case, Prime Transport shipped U.S.-origin commodities to Cosmotrans AG in Switzerland. The Department denied Cosmotrans' U.S. export privileges in 1988 for 20 years. The transactions that led to the penalty on Prime Transport took place in 1995 and 1996. As part of the settlement, the Department will suspend $7,000 of the $40,000 fine for one year,
and will waive that amount provided that Prime Transport commits no further violations. Special Agents from Commerce's Export Enforcement office in New York investigated the case.
TRIJICON, INC.
On September 29, 2000, the Commerce Department imposed a $64,000 civil penalty on Trijicon, Inc., a Michigan company, to settle allegations that it illegally exported U.S.-origin optical sighting devices for firearms. The Commerce Department alleged that on four separate occasions between 1994 and 1998 Trijicon, Inc., exported U.S.-origin optical sighting devices for firearms from the United States to Argentina and South Africa without the licenses that it knew were required by the Export Administration Regulations. While neither admitting nor denying the allegations, Trijicon, Inc. agreed to settle the allegations. Special Agents from Commerce's Chicago Office of Export Enforcement investigated the case. A portion of the fine, $19,500, has been suspended for one year.
OSCAR OSMAN
On September 11, 2000, the Commerce Department issued an order pursuant to Section 11(h) of the EAA denying export privileges to Miami businessman Oscar Osman, president of the firm Antilliana Trading Corporation until September 23, 2006. Osman previously pleaded guilty in U.S. District Court in Miami on charges related to illegal export of U.S. origin paints, plastics, motor vehicles, and hotel supplies to Cuba. Osman pleaded guilty to a criminal information charging him with conspiracy and violating the Trading With the Enemy Act and the Export Administration Act by exporting goods valued at $800,000 from the United States to Cuba without the required Commerce Department export licenses. The Court sentenced Osman to one year imprisonment, three years supervised release and a $30,000 fine.
PETER H. LEE
On August 29, 2000, the Commerce Department denied Peter H. Lee all U.S. export privileges for 8 years based on Section 11(h) of the Export Administration Act. On March 26, 1998, Peter H. Lee was convicted in the United States District Court for the Central District of California for violating the Espionage Act. Lee was convicted of willfully attempting to communicate nuclear technology, that he had obtained while working for Lawrence Livermore and Los Alamos National Laboratories, to a person not entitled to receive it, namely an agent of the People's Republic of China (PRC), with reason to believe the information could be used to the advantage of the PRC. This investigation was conducted by OEE's Los Angeles Field Office.
DEXIN INTERNATIONAL, INC.
On August 18, 2000, the Commerce Department imposed a $50,000 civil penalty ($35,000 suspended) on Dexin International, Inc., of West Covina, California, for alleged violations of the Export Administration Regulations (EAR) involving shipments to China. The Department alleged that on two occasions in 1994 and 1995, Dexin International, Inc., exported thermal video systems to China without obtaining the export licenses it knew or had reason to know were required under the EAR. Commerce also alleged that the company made a false and misleading statement of material fact on a Shipper's Export Declaration filed with the U.S. Government in connection with one export.
FEDERAL EXPRESS
On August 10, 2000, the Commerce Department imposed a $15,000 civil penalty on Federal Express (FedEx), of Memphis Tennessee, for allegedly facilitating the export of U.S.-origin equipment to a Denied Person and failure to maintain records of the subject transaction. The Department alleged that FedEx, in 1996, facilitated the export of semiconductor test equipment from the United States to Taiwan. The export was destined to a Denied Person, Realtek Semiconductor Co. Ltd., of Taipei, Taiwan. The Department also alleged that FedEx failed to maintain a proper record of the transaction.
The penalties were imposed as a result of an investigation conducted by the Office of Export Enforcement's Boston Field Office.
EXPEDITORS INTERNATIONAL
On August 9, 2000, the Commerce Department imposed a $5,000 civil penalty on Expeditors International, Inc., through its San Francisco office, for facilitating the export of U.S.-origin equipment to a Denied Person. The Department alleged that Expeditors International, in 1995, facilitated the export of semiconductor test equipment from the United States to Taiwan. The export was destined to a Denied Person, Realtek Semiconductor Co. Ltd. of Taipei, Taiwan. Commerce's Boston Office of Export Enforcement investigated the case.
S.R. TRAFFIC SERVICE
On August 3, 2000, the Commerce Department imposed a $10,000 civil penalty on Texas-based S.R. Traffic Service for alleged exports of U.S.-origin potassium fluoride from the United States to Mexico without the proper export licenses. Potassium fluoride is controlled for export by multilateral agreement with the 30-nation Australia Group of chemical producers because, in addition to its legitimate commercial uses, the chemical has potential to serve as a precursor in a chemical weapons program.
EMC CORPORATION
On August 3, 2000, the Commerce Department imposed a $13,000 civil penalty on EMC Corporation on behalf of its Data General Division (formerly the Data General Corporation), Westboro, Massachusetts. The penalty was imposed to settle allegations that Data General exported computer equipment to Israel in 1995 without the required authorization. The Department also alleged that Data General made a false statement on an export control document related to the shipment of computer equipment to Mexico. Commerce's Office of Export Enforcement Boston Field Office investigated the case. LOS
ALAMOS AND LAWRENCE LIVERMORE NATIONAL LABS
On June 26, 2000, the Commerce Department announced agreements with Los Alamos National Laboratory (LANL), Los Alamos, New Mexico, and Lawrence Livermore National Laboratory (LLNL), Livermore, California, concerning alleged shipments of various commodities without the proper Department of Commerce authorizations. In 1996, the Department of Energy (DOE) discovered that the labs may have made the unauthorized exports and brought the matter to the attention of the Department. LANL and LLNL fully cooperated in the investigation. The Department of Commerce alleged that LANL, on four occasions from 1994 to 1996, and LLNL, on one occasion in 1994,
shipped commodities to Russia without obtaining the export licenses required under the Export Administration Regulations. The exports by LANL occurred under the Department of Energy Material Protection, Control and Accounting Program, designed to reduce the threat to U.S. national security posed by unsecured Russian weapons-usable nuclear material. The commodities consisted of devices for measuring nuclear material, a communications router, a 486 computer and a printer. The export by LLNL occurred under a separate lab-to-lab project.
The agreements call for the labs to audit past transactions to ensure that exports to countries of concern were in compliance with the licensing requirements; increase their training of personnel on export controls; and provide increased technical training to the Bureau of Export Administration (BXA) on nuclear matters. The agreements will be reinforced by a new export control program implemented by the Departments of Commerce and Energy. Under this program, officials from the DOE complex will work at BXA so that they can enhance their compliance systems while at the same time providing BXA basic ongoing technical support on nuclear matters.
NEC TECHNOLOGIES, INC.
On May 10, 2000, the Commerce Department announced a $25,000 civil penalty, with $10,000 suspended, on NEC Technologies, Inc., of Boxborough, Massachusetts, to settle allegations that NEC illegally shipped automated finger print identification systems to several countries in violation of the Export Administration Regulations. The Commerce Department alleged that on five separate occasions in 1996, NEC Technologies, Inc., exported U.S.-origin automated finger print identification systems to Argentina, Peru, Singapore, South Africa, and Taiwan, without obtaining the required Commerce licenses. Commerce also alleged that the company made false and misleading statements of material fact on Shipper's Export Declarations filed with the U.S. government in connection with the exports.
NEC voluntarily disclosed the alleged violations. Commerce's Boston Office of Export Enforcement investigated the case.
FEDERAL PARTS INTERNATIONAL, INC.
On May 8, 2000, two Georgia men and their firm pled guilty in U.S. District Court in Atlanta to charges relating to the illegal export of automobile and jeep parts to Iran. Federal Parts International, Inc. located in Norcross, Georgia pled guilty to conspiracy to violate the U.S. embargo to Iran. The firm's owner, Mehdi (Michael) Azarin, a resident of Atlanta, and the firm's manager, Farhad Azarin, of Norcross, Georgia, both pled guilty to charges of making false statements to Commerce Department investigators. After President Clinton imposed comprehensive sanctions on Iran in May 1995, Federal Parts conspired to export automobile and jeep parts valued at approximately $600,000 to Iran using an intermediary in Germany.
The exports to Iran stopped in April 1996 when Export Enforcement agents executed a search warrant at Federal Parts offices in Norcross, and initiated the seizure of two pending shipments valued at $225,000. In pleading guilty to the charges, Mehdi and Farhad Azarin each face a maximum sentence of five years in prison and a $250,000 fine. The firm faces a maximum fine of $500,000.
ILLINOIS TOOL WORKS, INC.
On May 2, 2000, based on a investigation conducted by the Chicago Field Office, Commerce Assistant Secretary for Export Enforcement, F. Amanda imposed a civil penalty of $142,000 on Illinois Tool Works, Inc. (ITW), of Glenview, IL, to settle allegations that the Magnaflux Division of ITW exported U.S.-origin chemicals to Brazil on seven occasions between March 1994 and October 1997 without the required Commerce Department licenses, and that Magnaflux made false or misleading statements on Shipper's Export Declarations in connection with these exports. Of the $142,000 penalty imposed, $37,000 was suspended. The Commerce Department controls the export of certain U.S.- origin chemicals as part of a multilateral agreement with 30 chemical producing countries known as the Australia Group.
The controlled chemicals have legitimate commercial uses but also have the potential to be used as precursors in chemicals.
HANEFLEX SALES AND SERVICE COMPANY
In April 2000, Haneflex Sales and Service Company, in Hong Kong settled civil charges for violations of the Export Administration Regulations for the resale and transfer of diffusion pumps in violation of the conditions of the license issued by BXA authorizing the export of the pumps from the U.S. to Haneflex in Hong Kong. Haneflex agreed to pay a $20,000 fine to the Department of Commerce.
INTERNATIONAL HIGH TECH MARKETING
On March 27, 2000 International High Tech Marketing (IHTM), a Miami-based computer exporting company, pled guilty in U.S. District Court in Miami to a criminal information charging the firm with five counts of violating the International Emergency Economic Powers Act. The charges related to the illegal export of U.S.-origin goods to Libya and Sudan, and to making false or misleading statements on export control documents. The Court ordered the firm to pay a fine of $250,000. A criminal information charged IHTM, a wholly owned subsidiary of CHS Electronics, Inc.,
with two counts for illegally exporting computers and related items to Libya and Sudan, and three counts charging that the firm under-declared the value of export shipments, thereby evading reporting requirements to the U.S. Government. The charges involved violations of the International Emergency Economic Powers Act, and regulations administered by the Commerce Department's Bureau of Export Administration, and the Treasury Department's Office of Foreign Assets Control.
ANDREW PIETKIEWICZ
On March 5, 2000, Andrew Pietkiewicz was arrested for defaulting on a portion of a $25,000 civil penalty imposed upon him by the Department of Commerce for the illegal export of computers and computer accessories. Special Agents from the Office of Export Enforcement's Boston Field Office obtained a warrant for Pietkiewicz for violating an order issued by the Department, and arrested Pietkiewicz as he entered the U.S. from Poland.
BAYER CORPORATION
On March 1, 2000, the Commerce Department imposed a $200,000 civil penalty on Bayer Corporation, to settle allegations that Bayer Corporation, through its Diagnostics Division, exported glucose and other reagents from the United States to Hong Kong, Malaysia, Mexico, Singapore, South Africa, South Korea, and Taiwan, without obtaining the required validated export licenses. The chemicals are controlled for Chemical or Biological Warfare reasons.
The Office of Export Enforcement's Washington Field Office investigated the case.
HUA KO ELECTRONICS CO., LTD./NANSHING COLOR & CHEMICAL CO., LTD./GENERAL CHEMICAL CORP. OF NEW JERSEY
On December 21, 1999, the Commerce Department imposed a $174,000 civil penalty on Hua Ko Electronics Co., Ltd., a Hong Kong company which had previously been denied export privileges, for ordering and receiv ing U.S.-origin goods in violation of its denial order. The allegations involve shipments that occurred between August 1994 and May 1997. Hua Ko was also denied export privileges for five years. The denial and $87,000 of its fine were both suspended. In a related matter, the Department imposed a $38,500 civil penalty on Nanshing Color & Chemical Co., Ltd.,
also a Hong Kong company, for transferring U.S.-origin goods to Hua Ko. The lesser civil penalty imposed was due in large part to Nanshing's cooperation in the investigation. A third company, General Chemical Corporation of New Jersey, agreed to a $77,000 civil penalty to settle allegations that it exported U.S.- origin goods to Nanshing while knowing or having reason to know that the Nanshing would transfer the goods to Hua Ko Electronics Co. Ltd.
MICROTEK
On December 14, 1999, Microtek International Inc., Development Systems Division and its' company President, Joe-Pin Ouyang plead guilty in U.S. District Court in Portland, Oregon to criminal charges that the firm attempted to illegally export computer emulators to Iran. The plea agreement directs that the firm pay a criminal fine of $100,000 and agree to the civil forfeiture of $75,125, seized during the investigation. The agreements also recommends that Ouyang serve 5 months in prison and 5 months of home detention and pay a $3,000 criminal fine.
Evidence showed that Microtek attempted to illegally export two computer emulators valued at $75,125 to the R & D Company in Iran.
LAFAYETTE INSTRUMENT COMPANY, INC.
On December 8, 1999, the Commerce Department imposed a $10,000 civil penalty on Lafayette Instrument Company, Inc., to settle an allegation that the company violated the terms of an export license when a shipment of U.S.-origin polygraph machines was reexported without authorization from Hong Kong to the People' Republic of China. This investigation was started as a result of a post shipment verification conducted in Hong Kong.
MACOSIA INTERNATIONAL
On November 29, 1999, the Under Secretary for Export Administration issued an order affirming the recommended decision of the administrative law judge (ALJ) that imposed a seven-year denial of all export privileges against Macosia International, of Laredo, Texas. The ALJ found that Macosia had exported handcuffs and leg irons from the United States to Mexico without the validated export licenses required by the EAR. PRECISION SCIENTIFIC, INC. On September 30, 1999 the Commerce Department imposed a $10,000 civil penalty on Varlan Corporation to settle allegations that Precision Scientific, Inc., its former subsidiary, made a false statement on an export control document in connection with a shipment of incubators to Iran.
Precision Scientific stated on the Shipper's Export Declaration that the ultimate destination of the incubators was the Netherlands, when in fact the intended destination was Iran.
IMMUNOSTICS INC.
On September 17, 1999 Immunostics Inc., of Ocean, NJ, a manufacturer and distributor of medical test equipment including microbiological, serological and immunological reagents, pleaded guilty in U.S. District Court, Newark, NJ to a Criminal Information charging said firm with providing fraudulent export documents to both the U.S. Department of Commerce and the U.S. Customs Service. The plea was entered by Kenneth Kupits, Immunostics' president and chief executive officer, on behalf of the corporation, before District Judge William G. Bassler. On February 14, 2000 Judge Bassler sentenced Immunostics to five years probation and imposed a $60,000 criminal fine.
A two year investigation by the, Office of Export Enforcement's New York Field Office and the U.S. Customs Service, Newark, NJ disclosed that on more than 80 occasions, Immunostics supplied foreign customers in 17 different countries, with two commercial invoices for a particular shipment. One such invoice accurately reflected the cost of product and was directly sent to the customer for purposes of payment. A false invoice and corresponding Shipper's Export Declaration, reflecting a substantially lower cost of product was submitted in connection with the export, to be filed with the United States Customs Service and the Department of Commerce.
The overseas companies were thereby able to provide documents to their respective import tariff authorities, reflecting undervalued purchases.
PETER L. APPELBAUM
On August 18, 1999, Peter L. Appelbaum, president of Pacorp, Inc., Miami, Florida, pled guilty in U.S. District Court, Southern District of Florida, Miami Division, to charges of violating the Arms Export Control Act and the International Emergency Economic Powers Act by illegally exporting defense articles and crime control equipment to Honduras without the required State Department and Commerce Department licenses. The exported items included night vision equipment subject to the International Traffic in Arms Regulations, handcuffs, shackles, fingerprint powders, and dyes subject to the EAR. The conviction was the result of a joint investigation by the OEE's Miami Field Office and the U.S. Customs Service.
SUMMIT UNITED INDUSTRIES, INC.
On August 18, 1999, Summit United Industries, Houston, Texas, pled guilty in the Southern District of Texas to charges that the company illegally exported oil field equipment to Libya in violation of the International Emergency Economic Powers Act. Summit was ordered to pay a $10,000 fine and a special assessment of $400.
The conviction resulted from a joint investigation by the Office of Export Enforcement's Dallas field office and the U.S. Customs Service, Houston, Texas.
ROTHCO / MORRIS ROTHENBERG AND SONS INC.
On July 15, 1999, Morris Rothenberg and Sons, Inc., doing business as Rothco, a Smithtown, New York Company, plead guilty to charges that the company illegally exported and attempted to export handcuffs to the Republic of Croatia and gas masks to Japan. In connection with the plea, Rothco agreed to pay a criminal fine of $500,000 and prosecution costs in the amount of $200,000. In a related administrative action, the Department of Commerce ordered Rothco to pay a $200,000 civil penalty and denied its export privileges for one year to settle alleged violations of the EAR. The denial period was suspended and will be waived, provided that, during the period of suspension,
Rothco committed no violation of the EAR. The investigation was conducted jointly by OEE's New York Field Office and the U.S. Customs Service.
FAWZI MUSTAPHU ASSI
On July 12, 1999, the Commerce Department imposed a twenty-year denial of all U.S. export privileges on Fawzi Mustapha Assi, a Lebanese naturalized U.S. citizen, for attempting to export from the United States to Lebanon a thermal imaging camera without the export license that he knew or had reason to know was required.
The equipment that Assi was attempting to export was intended for Hizballah, which has been designated as a foreign terrorist organization by the Secretary of State. In a separate criminal action, in July 1998, Assi was arrested by special agents from the OEE's Chicago Field Office, the Federal Bureau of Investigations and the U.S. Customs Service for attempting to export U.S. origin items without the required export licenses and for attempting to provide material support and resources to a designated foreign terrorist organization. In August 1998, Assi was indicted on charges alleging violations of IEEPA, the Arms Export Control Act, and the Antiterrorism and Effective Death Penalty Act, and failing to appear in court. He is currently a fugitive.
SUN MICROSYSTEMS OF CALIFORNIA LTD. / GOLD VALLEY TECHNOLOGY COMPANY
On June 21, 1999, the Commerce Department imposed a $30,000 civil penalty on Sun Microsystems of California, Ltd., a Hong Kong company, to settle allegations that it violated the EAR by arranging for shipments of computers to the People's Republic of China (PRC) that did not adhere to a condition of the export license. In a related matter, on December 21, 1999, the Commerce Department's imposed a $20,000 civil penalty on Gold Valley Technology Company to settle allegations that it violated a term of an export license involving a shipment of computers to the People's Republic of China.
A portion of the civil penalty imposed against Gold Valley, $10,000, was suspended. The Department alleged that, in September 1993, Sun Microsystems and Gold Valley arranged for a shipment of computers to the PRC that they knew or had reason to know was contrary to the condition on the export license. The Department also alleged that in October 1993, Sun Microsystems arranged for a shipment of computers to the PRC falsely representing that the shipment was authorized under a BXA license. The investigation was conducted by OEE's Washington Field Office.
ALARIS MEDICAL SYSTEMS, INC.
On June 14, 1999, the Commerce Department imposed a $35,000 civil penalty on Alaris Medical Systems, Inc., a manufacturer of medical devices, formerly IMED Corporation, of San Diego, California, to settle allegations that the company failed to report the receipt of requests from Kuwait to participate in the boycott of Israel. The Department also alleged that the company failed to maintain records of reportable boycott requests.
INTERLINK COMPUTER TECHNOLOGY
In June 1999, a criminal sentence was imposed on Interlink Computer Technology Inc., a company owned and operated by Ali Mozaffari, by the U.S. District Court for the Northern District of California for violating the U.S. trade embargo against Iran. Interlink was required to pay a $30,000 criminal penalty. Mozaffari, individually and doing business as Interlink, also agreed to pay a $5000 civil penalty to the U.S. Department of Commerce and received a five- year denial of export privileges (suspended).
The investigation revealed that Mozaffari, doing business as Interlink, attempted to ship computer goods to Iran via Germany in September 1996 in violation of the Export Administration Regulations (EAR). The United States Government maintains a comprehensive economic sanctions program against the Government of Iran, which prohibits virtually all commercial transactions involving U.S.-origin goods or U.S. persons, or both, with the Government of Iran, unless specifically authorized.
DIEN DUC HUYNH/DIEN'S AUTO SALVAGE
On May 27, 1999, a U.S. District Court jury for the Western District of Louisiana found Dien Duc Huynh and his corporation, Dien's Auto Salvage, guilty of violating the Export Administration Act, Trading with the Enemy Act and theft of government property in connection with the illegal export of military surplus vehicles to Vietnam. Following his conviction, Dien Duc Huynh agreed to pay the government $250,000 in lieu of forfeiting his property to the government. The conviction resulted from a joint investigation by the Office of Export Enforcement's Dallas field office, the U.S. Customs Service and the Department of Defense.
Investigators found evidence that the defendants were purchasing surplus military vehicles from Army bases in the United States and Europe and exporting them to Vietnam through Singapore in violation of U.S. export control laws. The vehicles are controlled for national security, anti-terrorism, and regional stability reasons.
LANGHAM TRANSPORT SERVICES, INC.
On May 20, 1999, the Commerce Department imposed a $2,000 civil penalty on Langham Transport Services, Inc., a freight forwarder in Indianapolis, Indiana, to settle allegations that Langham Transport Services furnished information to a company in Dubai, United Arab Emirates regarding another person's business relationships with or in Israel.
The company voluntarily disclosed the alleged violation and cooperated fully with the investigation.
SABRE GROUP, INC.
On May 20, 1999, the Commerce Department imposed a $5,000 civil penalty on the SABRE Group, Inc. (SABRE), a Texas provider of travel- related products and services, to settle allegations that, in a 1998 contract with a company in Department.
INTERLINK COMPUTER TECHNOLOGY
On April 29, 1999, Interlink Computer Technology pleaded guilty in U.S. district court in San Francisco to charges of attempting to ship computer goods through Germany to Iran. This plea was the result of a joint investigation by special agents in the Office of Export Enforcement's San Jose field office and the U.S. Customs Service. In a related administrative action, the Commerce Department ordered the President of Inerlink, Ali Mozaffari, individually and doing business as Interlink, to pay a $5,000 civil penalty and denied both Interlink and Mozaffari's export privileges for five years; the denial period was suspended for five years.
WILLIAM F. MCNEIL/AMERICAN PROTECTION COPORATION
On April 27, 1999, the Commerce Department denied the export privileges of American Protection Corporation until August 8, 2001. The Commerce Department determined that American Protection Corporation is related to William F. McNeil, whose export privileges were denied pursuant to Section 11(h) of the Export Administration Act, based on his criminal conviction for violating the International Emergency Economic Powers Act. The Commerce Department issued the "related person order" to prevent evasion of the order against McNeil.
JOHN STROME/ABDULAMIR MAHDI
On April 23, 1999, a U.S. District Court judge in Orlando, Florida sentenced John R. Strome, President of the Melbourne, Florida firm, Brevard International Technical Services, to two years of imprisonment and two years of probation for violating U.S. restrictions on exports to embargoed destinations. Strome, a Canadian citizen, pled guilty on December 17, 1998 to conspiring to violate the International Emergency Economic Powers Act and the Export Administration Regulations by exporting industrial equipment and machinery to Iran, Iraq, and Libya via intermediaries in Canada and the United Kingdom.
In imposing the sentence, the judge took into account Strome's substantial assistance in providing the Office of Export Enforcement with information and evidence on other firms and individuals involved in circumventing U.S. restrictions on exports subject to the EAR to embargoed destinations. In a related matter, on November 19, 1999, Abdulamir Mahdi, a former associate of Strome and Canadian Businessman, was sentenced by a U.S. District Court judge in Orlando, Florida, to 51 months of imprisonment, a $7,500 criminal fine and 3 years of probation for violating U.S. export controls restricting trade with Iran and Iraq.
Mahdi, an Iraqi national, used two Toronto companies, OTS Refining Equipment Corporation and Tech-Link Development Corporation, to buy U.S. oil-field and industrial equipment for diversion to Iran and Iraq. The case was the result of a two-year investigation by special agents in the Office of Export Enforcement's Miami field office.
SCHOTT FIBER OPTICS, INC.
On April 13, the Commerce Department imposed a $50,000 civil penalty on Schott Fiber Optics, Inc., of Southbridge, Massachusetts, to settle allegations that the company exported fiber optic image inverters from the United States to the Netherlands without obtaining the required export licenses. A portion of the penalty, $10,000, was suspended for one year, and thereafter will be waived, provided no violations are committed during the one-year period.
The Office of Export Enforcement's Boston field office investigated the case.
KHALID KHALIL EL-AWAR
On April 12, 1999, the Commerce Department denied Khalid Khalil El-Awar (Khaled El-Awar) of Houston, Texas, all export privileges until August 5, 2003, pursuant to Section 11(h) of the Export Administration Act. On August 5, 1995, Khaled El- Awar was convicted in the U.S. District Court for the Southern District of Texas of violating the International Emergency Economic Powers Act by exporting steel pipe and oil field accessories from the United States to Rotterdam, Holland, for transshipment to Libya.
COLLIN XU / YI YAO / LION PHOTONICS
On March 9, 1999, a grand jury in Boston returned an indictment charging Collin Xu, Yi Yao, Lion Photonics, of Montreal, Canada, and Lion Photonics, of Beijing, China, with illegally exporting fiber optic gyroscopes to China, via Canada. The investigation disclosed that the defendants falsely described the exported items as fiber sensors for optical communication and listed Canada as the country of ultimate destination. On November 9, 2000, Xu pled guilty to a conspiracy to violate the Arms Export Control Act and was sentenced to 30 months in prison and 36 months supervised release. On February 1, 2001, Yi also pled guilty to a conspiracy to violate the Arms Export Control Act and was sentenced on April 10, 2001, to 30 months in prison and 36 months supervised release.
HANSON AGGREGATES WEST, INC.
On April 8, 1999, the Commerce Department imposed a $3,000 civil penalty on Hanson Aggregates West, Inc., formerly known as Gifford-Hill & Company, of Dallas, Texas, to settle allegations that it furnished information about its business relationships with Israel and failed to report the receipt of boycott requests. Hanson Aggregates West, Inc. voluntarily disclosed the alleged violations to the Department.
CN BIOSCIENCES, INC.
On March 29, 1999, the Commerce Department imposed a $708,000 civil penalty on CN Biosciences, Inc., of San Diego, California, and its subsidiary, Calbiochem-Novabiochem (UK) Ltd., of the United Kingdom, for alleged shipments of U.S.-origin biological toxins to various destinations without the required export licenses. The Department further alleged that Calbiochem (UK) Ltd reexported a U.S.-origin biotoxin from the United Kingdom to the Republic of Ireland without the required reexport authorization from BXA. Half the penalty, $354,00 is suspended for one year,
and will thereafter be waived, provided the companies commit no violation of the Export Administration Regulations during that time. The company voluntarily disclosed the shipments and cooperated with the investigation. Export controls on biological agents implement U.S. obligations to the 30-nation Australia Group. Biotoxins are among the most dangerous items controlled by Australia Group members because they can be used to produce biological weapons. The case resulted from an investigation conducted by special agents from the Office of Export Enforcement's field office in Irvine, California.
ALDRICH AMES
On March 23, 1999, the Commerce Department denied Aldrich Ames export privileges until April 24, 2004, pursuant to Section 11(h) of the Export Administration Act, based upon his conviction under the Espionage Act. Ames is serving time in federal prison.
HAROLD J. NICHOLSON
On March 23, 1999, the Commerce Department denied Harold J. Nicholson, of Eugene, Oregon, export privileges until June 7, 2007, pursuant to Section 11(h) of the Export Administration Act, based upon his conviction under the Espionage Act for conspiring with officers of the intelligence services of the Russian Federation, to communicate, deliver and transmit to Russia photographic negatives and information relating to the U.S. national defense. Nicholson is serving time in federal prison.
A.V.S. ARMOURED VEHICLES' SYSTEMS, INC.
On March 23, 1999, the Commerce Department denied A.V.S. Armoured Vehicles' Systems, Inc., of Plainview, New York, export privileges until April 10, 2000, pursuant to Section 11(h) of the Export Administration Act, based upon its conviction under the Arms Export Control Act for false statements relating to the end-user of replacement parts for a "Hawk" anti-aircraft missile system.
COLLIN XU/YI YAO/LION PHOTONICS
On March 9, 1999, a grand jury in Boston returned an indictment charging Collin Xu, Yi Yao, Lion Photonics, of Montreal, Canada, and Lion Photonics, of Beijing, China, with illegally exporting fiber optic gyroscopes to China, via Canada. The investigation disclosed that the defendants falsely described the exported items as fiber sensors for optical communication and listed Canada as the country of ultimate destination. Yao and Xu are currently in custody pending trial.
HADI SHALCHI
On March 2, 1999, Hadi Shalchi, president and owner of Continental A. P. Company, of Hopelawn, New Jersey, pleaded guilty in U.S. District Court in Newark on behalf of Continental A.P. Company to charges that the company violated the Export Administration Regulations by illegally exporting auto parts to Iran. Shalchi pleaded guilty on his own behalf to making false statements in connection with that transaction. Shalchi admitted that he had represented that the auto parts were bound for the UAE when, in fact, they were bound for Iran. The Office of Export Enforcement's New York field office investigated the case.
PPG INDUSTRIES DE MEXICO, S.A. DE C.V.
On February 26, 1999, the Commerce Department imposed a $60,000 civil penalty on PPG Industries de Mexico, S.A. de C.V. (PPG Mexico), a Mexican chemical company, to settle allegations that the company exported potassium fluoride from the United States to Mexico without the required Commerce Department licenses. The Department also alleged that, on two of those occasions, PPG Mexico knew that the violations would occur. A portion of the penalty, $20,000, will be suspended for one year, then waived, if PPG Mexico commits no violations during that time.
Potassium fluoride is controlled for export by multilateral agreement with the 30-nation Australia Group because, in addition to its legitimate commercial uses, the chemical has the potential to serve as a precursor in a chemical weapons program.
ALCOA
On February 19, 1999, Under Secretary for Export Administration William Reinsch imposed a $750,000 civil penalty on the Aluminum Company of America (ALCOA) for 100 violations of the Export Administration Regulations (EAR). Reinsch affirmed the findings of an Administrative Law Judge (ALJ) that ALCOA exported potassium fluoride and sodium fluoride to Jamaica and Suriname on 50 separate occasions without obtaining the required Commerce export licenses. Additionally, the ALJ found that ALCOA made false statements in connection with each of the 50 shipments.
ALCOA committed the violations because its export compliance program failed to recognize that the chemicals in question had been added to the Commerce Control List.
YUFENG WANG/A&C INTERNATIONAL TRADE
On February 12, 1999, Yufeng Wang, also known as Alan Wang, was arrested by Special Agents from the Office of Export Enforcement's Boston Field Office, as he reentered the United States from China. Wang and his company, A&C International Trade, Inc., were indicted in U.S. District Court, Washington, DC, and charged with the illegal export of an armored riot control vehicle, equipped with a pepper spray system, to China. On March 10, 2000, A&C International pled guilty to the export charges, and Wang pled guilty to submitting false documents to the U.S. Government in connection with the export.
Wang and A&C International are currently awaiting sentencing by the U.S. District Court.
FRITZ COMPANIES, INC.
On February 1, 1999, the Commerce Department imposed a $12,000 civil penalty on Fritz Companies, Inc. to settle allegations that its Houston, Texas office, furnished information regarding another person's business relationships with or in a boycotted country by certifying that the goods shipped were not of Israeli origin, were not shipped from Israel, and did not contain any material from Israel.
The company voluntarily disclosed the alleged violations to the Recent Antiboycott Cases.
YURI MONTGOMERY
On January 15, 1999, a U.S. district judge in Washington, D.C., sentenced Yuri Montgomery, doing business as Fortend USA, to three years' probation for violations of the Export Administration Act and the International Emergency Economic Powers Act. On November 6, 1998, Montgomery pleaded guilty to exporting laser rifle sights, ballistic helmets, optical sights, handcuffs, and stun guns to Macedonia and Slovenia in violation of U.S. export controls.
The case was investigated by special agents from the Office of Export Enforcement's Boston field office.
On September 4, 1998, the Commerce Department imposed a $20,000 civil penalty on Herb Kimiatek, individually and doing business as Kimson Chemical Inc., of Boston, Massachusetts, to settle allegations that Mr. Kimiatek exported sodium cyanide from the United States to the Dominican Republic without obtaining the license he knew or had reason to know was required for the shipment.
Sodium cyanide is controlled for nonproliferation reasons because it can be used as a precursor for chemical weapons.
CHEMICALS EXPORT COMPANY
On September 3, 1998, the Commerce Department imposed a $16,000 civil penalty on Chemicals Export Company, of Boston, Massachusetts, to settle allegations that the company exported sodium cyanide from the United States to Peru, Venezuela and Guatemala without obtaining the required validated export licenses.
SYNTEX S.A. de C.V./MARIO PALMEROS/VILLASANA AND COMPANY, INC.
On September 3, 1998, the Commerce Department imposed a $65,000 civil penalty on Syntex S.A. de C.V., a Mexican chemical company, to settle allegations that it caused, aided, or abetted the export of U.S.-origin hydrogen fluoride from the United States to Mexico without the required Commerce Department licenses. Syntex will pay $32,500 of the penalty; payment of the remaining fine will be suspended for one year, then waived, provided Syntex committs no violations of the Export Administration Regulations during the one-year probation period.
In two related cases involving freight forwarders for Syntex, the Commerce Department also imposed civil penalties. A $50,000 civil penalty and a two-year denial of export privileges was imposed on Mario Palmeros of Palmeros Forwarding, and a $2,500 civil penalty and a two-year denial of export privileges was imposed on Villasana and Company, Inc. All of the penalties against the forwarders, both of Laredo, Texas, were suspended for two years; they will be waived if the forwarders do not violate the Export Administration Regulations during the two-year probation period.
The freight forwarders agreed to the sanctions in order to settle allegations that they prepared and used export control documents representing that the chemicals needed no Commerce licenses when, in fact, licenses were required.
SOUTHERN INFORMATION SYSTEMS
On September 3, 1998, the Commerce Department imposed a $25,000 civil penalty on Southern Information Systems, located in Hsinchu, Taiwan, to settle allegations that the company exported digital microwave systems, which incorporated U.S.-origin parts, from Taiwan to Vietnam without obtaining the required Commerce authorization.
IBM EAST EUROPE/ASIA LTD.
On July 31, 1998, IBM East Europe/Asia Ltd., a Russian subsidiary of International Business Machines Corp., pleaded guilty in U.S. District Court in Washington, D.C. to charges that, in 1996 and 1997, it exported a total of 17 computers to a Russian nuclear weapons laboratory, Arzamas-16,
having reason to believe that the computers would be used "directly or indirectly" in research on, or development, design, manufacture, construction, testing or maintenance of nuclear explosive devices. The court imposed an $8.5 million criminal fine, the maximum permitted for the charges to which the company pled guilty.
In a related administrative action, Assistant Secretary Amanda DeBusk ordered IBM East Europe/Asia to pay $171,000 and denied its export privileges for two years. Imposition of the denial period was suspended, and will be waived, provided the company does not violate the Export Administration Regulations (EAR) or any order issued under the EAR during the two-year probation period. Additionally,
IBM East Europe/Asia agreed that, during the next two years, it will not use license exception CTP, and will not to engage in any transactions involving nuclear or military end users or end uses without written authorization from BXA.
EVI, INC.
On June 30, 1998, the Commerce Department imposed a $40,000 civil penalty on EVI, Inc., of Houston, Texas, to settle allegations that EVI, Inc., through its former subsidiary, Energy Ventures Mid-East, Inc., exported oil field equipment to Iran without obtaining the required export licenses. The Department also alleged that, in connection with each export, EVI, through its former subsidiary, Energy Ventures Mid-East, Inc., made false and misleading statements of material fact on export control documents. At the time, the products were controlled for export to Iran for foreign policy reasons. The Department suspended,
for one year, payment of $10,000 of the $40,000 civil penalty and will waive payment of the suspended portion of the penalty if EVI complies with the EAR during the one-year probation period.
GATEWAY 2000, INC.
On June 19, 1998, the Commerce Department imposed a $402,000 civil penalty on Gateway 2000, Inc. ("Gateway 2000"), of North Sioux City, South Dakota to settle allegations that, on 30 separate occasions, Gateway 2000 exported U.S.-origin computer systems to 16 countries, including Iran, Syria and China, without the required validated export licenses that it knew or had reason to know were required by the Export Administration Regulations. The Department also alleged that, on 27 separate occasions,
Gateway 2000 filed Shipper's Export Declarations containing false or misleading statements of material fact.
JOSE LUIS SESIN
On May 20, 1998, a U.S. district judge in Miami, Florida, sentenced Jose Juis Sesin, president of Sesin International Corp., a Miami food broker, to three years' probation, imposed a criminal fine of $20,000 and a $100 special assessment fee for violating U.S. restrictions on trade with Cuba. The judge also ordered Sesin to serve home confinement using an electronic monitor for the first six months of his probation period. On April 6, 1998, Jose Luis Sesin pled guilty in U.S. District Court in Miami to violations of the International Emergency Economic Powers Act,
the Trading with the Enemy Act, and the conspiracy statute for his involvement in the illegal exportation of commercial foodstuffs and restaurant supplies to Cuba. On February 1, 1999,
the Commerce Department denied Sesin all U.S. export privileges until May 20, 2006, pursuant to Section 11(h) of the Export Administration Act.
DAVID IRWIN PORTNOY
On May 5, 1998, the Commerce Department denied David Irwin Portnoy of Irving, Texas all U.S. export privileges until August 1, 2007, pursuant to Section 11(h) of the Export Administration Act. On August 1, 1997, Portnoy was convicted in the U.S. District Court in Dallas of violating the International Emergency Economic Powers Act by transshipping electronic components and telecommunications equipment through Switzerland to Libya without the required export licenses.
WAYNE P. SMITH
On May 5, 1998, the Commerce Department denied Wayne P. Smith of Vinton, Louisiana all U.S. export privileges until July 3, 2006, pursuant to Section 11(h) of the Export Administration Act. On July 3, 1996, Smith was convicted in the U.S. District Court in the Western District of Louisiana of violating the Arms Export Control Act by exporting 80 plain self-aligning ball bearings for McDonald Douglas F-4 Phantom II jets without the required export license from the Department of State.
PENNY RAY/JAMES LEE
On April 6, 1998, the Commerce Department denied Penny Ray and James Lee, both of San Jose, California, all U.S. export privileges until January 14, 2008, pursuant to Section 11(h) of the Export Administration Act. A jury in San Francisco convicted Penny Ray and James Lee of violating the Arms Export Control Act by exporting defense articles to the People's Republic of China without the required export license from the Department of State.
On January 14, 1998, Ray and Lee were sentenced to 18 months of imprisonment, followed by three years' supervised release, and a $50 special assessment fee.
WELL COMPLEX INTERNATIONAL/DAVID CHAN
On March 17, 1998, Well Complex International of Passaic, New Jersey, pled guilty in U.S. District Court in Newark, New Jersey, to charges of exporting hafnium granules to the People's Republic of China without obtaining a validated export license from the Department of Commerce. The export of hafnium is controlled to the People's Republic of China for foreign policy reasons. David Chan, owner of Well Complex International, pled guilty to charges that he violated the false statement statute in connection with the illegal exportation of hafnium granules to the People's Republic of China.
On July 8, 1998, Well Complex was sentenced to five years' probation, a $7,500 criminal fine and a $200 special assessment fee. David Chan was sentenced to three years' probation, a $500 criminal fine and a $100 special assessment.
The case was the result of an investigation by the Office of Export Enforcement's New York field office.
REPUBLIC-LAGUN MACHINE TOOL COMPANY
On March 15, 1998, the Commerce Department imposed a $20,000 civil penalty on Republic-Lagun Machine Tool Company, of Carson, California, to settle allegations that the company exported a vertical milling machine with a computer numeric controller (CNC) from the United States to the People's Republic of China without obtaining the validated export license that the company knew was required.
Exports of CNC-equipped milling machines are controlled for national security and nuclear nonproliferation reasons.
C.H. POWELL COMPANY
On March 2, 1998, the Commerce Department imposed a total civil penalty of $30,000 on C.H. Powell Company of Peabody, Massachusetts for allegedly preparing shipping documents containing false information and acting with knowledge or reason to know that a violation had occurred. The civil penalties were imposed in two separate cases. In one case, the Department alleged that C.H. Powell prepared export control documents with false information and used them in connection with the exports of sodium cyanide from the United States to Peru, Venezuela and Guatemala. In the second case,
the Department alleged that C.H. Powell arranged for an exporter to ship U.S.— origin sodium cyanide from the United States to the Dominican Republic, knowing or having reason to know that the exporter had failed to obtain the necessary Commerce Department authorization.
REPUBLIC CARGO SYSTEMS
On February 26, 1998, the Commerce Department imposed a $10,000 civil penalty on Republic Cargo Systems, successor to certain of the business of H&M International Air Freight Corp. in Kearny, New Jersey, for allegedly exporting U.S.— origin marine diesel engine parts from the United States to Vietnam without obtaining the required validated license.
The penalty is suspended for one year, and then will be waived provided that Republic Cargo Systems does not violate the export regulations during the suspension period.
LEP PROFIT INTERNATIONAL, INC.
On February 26, 1998, the Commerce Department imposed a $60,000 civil penalty on LEP Profit International, Inc. (LEP) of Marietta, Georgia, for allegedly preparing shipping documents containing false information. The Department alleged that the Seattle office of LEP prepared and used export control documents to effect exports to Vietnam, representing that the commodities were licensed for export to Vietnam, when, in fact, none of the exports was licensed. A portion of the penalty, $15,000,
will be suspended for two years then waived provided that LEP does not violate the export regulations during the suspension period.
HENRY JOSEPH TROJACK/HAMID ABDOL RASHIDIAN
On February 18, 1998, a federal jury in Portland, Oregon, convicted Henry Joseph Trojack for conspiring with others to illegally export impregnated alumina (a chemical catalyst) to Iran through Dubai, United Arab Emirates, while operating under the name of R & H International. On January 12, 1999, a U.S. district judge in Portland, Oregon, sentenced Henry Joseph Trojack to seven years' imprisonment for his part in the conspiracy. On April 6, co-defendant Hamid Abdol Rashidian pled guilty in U.S. District Court in Portland, Oregon,
to conspiring with others to export General Electric gas turbine parts and impregnated alumina to Iran through the United Arab Emirates. On June 8, 1998, a federal judge in Portland, Oregon, sentenced Hamid Abdol Rashidian to serve 21 months in prison, followed by three years' supervised release and a $100 special assessment fee for his participation in the conspiracy. As part of his guilty plea, Rashidian agreed to forfeit $10,000 to the United States.
The case was the result of a joint investigation by the Office of Export Enforcement's San Jose field office and the U.S. Customs Service.
NF&M INTERNATIONAL INC.
On February 9, 1998, the Commerce Department imposed a $82,500 civil penalty on NF&M International Inc. (NF&M), a manufacturer of titanium alloy in Jericho, New York, for allegedly exporting titanium alloy products to consignees in Australia, Austria, England, Germany, and Israel without obtaining the required export licenses.
The Department agreed to suspend payment of $42,500 for one year and then to waive that payment, provided that NF&M complies with export control regulations.
ALLERGAN, INC.
On January 26, 1998, the Commerce Department imposed a $824,000 civil penalty on Allergan, Inc. ("Allergan") of Irvine, California to settle allegations that Allergan violated export controls on biological agents by shipping botulinum toxin pharmaceutical product from the United States to various countries without the required export licenses. The export controls on biological agents are part of U.S. obligations to the 30-nation Australia Group, whose members are committed to curbing the proliferation of chemical and biological weapons.
All member countries require licenses to export biological agents with both legitimate civilian uses and possible uses in biological weapons. Biotoxins are considered among the most dangerous items controlled by Australia Group members because some nonmember countries have produced or acquired them for biological weapons purposes.
The Commerce Department's Office of Export Enforcement field office in Los Angeles conducted the investigation.
BE AEROSPACE
On January 13, 1998, BE Aerospace, Inc., headquartered in Wellington, Florida, pled guilty in the United States District Court in New Haven, Connecticut to violating the Export Administration Regulations and was fined $2.5 million and given three years' probation. In a related administrative action, the Commerce Department imposed a $500,000 civil penalty on PTC Aerospace, a division of BE Aerospace, to settle allegations stemming from the same transactions which involved the export of aircraft parts, mainly seats,
from PTC Aerospace to France for installation in Iran Air aircraft without obtaining the required validated export licenses from the Department of Commerce. The Department also denied PTC Aerospace's export privileges for three years, but suspended the denial conditioned on PTC Aerospace not committing another violation during that period. On May 12, 1998, the Commerce Department imposed a $10,000 civil penalty on Marc A. Leveille, a French national and manager of BE Aerospace, S.A. in Paris,
for allegedly directly or indirectly falsifying or concealing a material fact in the course of an action instituted under the authority of the Act regarding the export of aircraft parts to France for installation on Iran Air aircraft. The case was the result of a joint investigation by the Commerce Department's Office of Export Enforcement field office in New York and the U.S. Customs Service.
KIYOYUKI YASUTOMI
On January 5, 1998, Kiyoyuki Yasutomi, a Japanese businessman, pled guilty in U.S. District Court in Washington, D.C. to violating the Export Administration Act by illegally reexporting computer equipment valued at $1.4 million from Japan to Pakistan without the required export license. The U.S. District Court Judge sentenced Yasutomi to eighteen months' imprisonment and a $10,000 fine. On November 23, 1998, the Commerce Department denied Yasutomi all U.S. export privileges until January 5, 2008,
pursuant to Section 11(h) of the Export Administration Act.
On December 22, 1997, the Commerce Department imposed a $298,000 civil penalty on Grove Europe Limited ("Grove Europe"), a controlled-in-fact foreign affiliate of a U.S. company located in Sunderland, England, to settle allegations that Grove Europe furnished information about its and other companies' business relationships with or in Israel or with companies known or believed to blacklisted.
Also, the Department alleged that Grove Europe agreed to comply with the Arab boycott of Israel in connection with exports of U.S.-origin parts to Libya.
JACK BAUGHER
On December 19, 1997, a U.S. district judge in Yakima, Wasington sentenced Jack Baugher to pay a $130,000 fine, and a $400 special assessment fee, serve five years' probation with four months of home detention, and to perform 100 hours of community service, based on his guilty plea to illegally exporting pepper spray and stun guns to the Philippines and Mexico. In addition, on August 3, 1998, the Commerce Department denied Baugher all U.S. export privileges until December 19, 2005,
pursuant to Section 11(h) of the Export Administration Act.
WILLIAM F. MCNEIL
On November 7, 1997, the Commerce Department imposed a five-year denial of export privileges on William F. McNeil, of Pittsfield, Massachusetts, based on his conviction for illegally exporting riot shields to Romania without the required export license.
BEN H. ATTIA
On October 30, 1997, the Commerce Department's Under Secretary for Export Administration William A. Reinsch denied Ben H. Attia, also known as Adnan Attia, of Miami Beach, Florida, individually and doing business as General Polyphase, Inc. of Tunis, Tunisia, all U.S. export privileges for 15 years for exporting ballistic shields to Tunisia without obtaining the required export license.
The Commerce Department's Office of Export Enforcement field office in Boston investigated the case.
SUMMIT MARKETING, INC.
On September 26, 1997, Sanford Groetzinger, president and corporate counsel of Summit Marketing, Inc., were convicted on four counts of violating the Arms Export control Act in connection with the export of numerous military aircraft components to Iran via France, without having obtained the required export licenses from the Department of State. On May 11, 1998, the Commerce Department denied Sanford Groetzinger and Summit Marketing, Inc. all export privileges until September 26, 2005, pursuant to Section 11(h) of the Export Administration Act.
The Commerce Department's Office of Export Enforcement field office in Boston investigated the case.
ELHAM ABRISHAMI
On August 20, 1997, Elham Abrishami, of Dublin, Ohio, was sentenced to two terms of five months to run consecutively following a guilty plea on January 13, 1997, in the U.S. District Court for the Southern District of Ohio, to charges of violating provisions of the Commerce Department's Export Administration Regulations. On August 3, 1998, the Commerce Department denied Elham Abrishami, of Dublin, Ohio, all U.S. export privileges until August 20, 2007, pursuant to Section 11(h) of the Export Administration Act. Abrishami's conviction resulted from an investigation that disclosed that Abrishami knowingly and willfully exported and caused to be exported items on the U.S. Department of Commerce's Control List,
consisting of radio communications equipment valued at $9,660, from the United States to the United Arab Emirates for transshipment to Iran without authorization from the Department, and with knowledge that the radio equipment was destined for Iran, a country to which exports are controlled for foreign policy purposes. Abrishami also pled guilty to attempting to export defense articles, 100 Sectrone ST-25 Mobilcall Encryption Modules, from the United States to the United Arab Emirates for transshipment to Iran without first having obtained the required U.S. Department of State license, in violation of the Arms Export Control Act. This investigation was conducted jointly by the Commerce Department's Office of Export Enforcement field office in Herndon,
Virginia, and the U.S. Customs Service.
IAN ACE/KARL CORDING/A. ROSENTHAL
On August 8, 1997, the Commerce Department's Under Secretary for Export Administration, William A. Reinsch, affirmed an Administrative Law Judge's recommended decision and order and denied Ian Ace's export privileges for a period of 20 years, finding that Ace, Manager of A. Rosenthal (Pty) Ltd., Capetown, South Africa, conspired with others to export and exported U.S.-origin shotguns to Namibia and South Africa without obtaining the proper Commerce Department licenses. The Under Secretary further found that, in connection with those exports, Ace made false material statements of fact in connection with the preparation,
submission, or use of export control documents. Separately, on June 6, 1997, one of Ace's co-conspirators, Karl Cording, was also denied export privileges for a period of 20 years.
The Commerce Department's Office of Export Enforcement field office in Los Angeles investigated the case.
SUBURBAN GUNS (PTY) LTD.
On July 25, 1997, Suburban Guns (Pty) Ltd. of Capetown, South Africa, was fined $10,000 and placed on two-year's probation, and ordered to pay a $600 special assessment fee in the U.S. District Court for the Southern District of New York, for illegally exporting shotguns, rifles, and ammunition to South Africa. On March 23, 1998, the Commerce Department imposed a 10-year denial of export privileges pursuant to Section 11(h) of the EAA.
The Commerce Department's Office of Export Enforcement's field office in New York investigated the case jointly with the U.S. Customs Service.
HONGKONG AND SHANGHAI BANKING CORP.
On July 24, 1997, the Commerce Department's Acting Assistant Secretary for Export Enforcement, Frank Deliberti, imposed a $23,000 civil penalty on the New York branch of The Hongkong and Shanghai Banking Corporation Limited of Hong Kong to settle allegations that the bank confirmed a letter of credit from the United Arab Emirates that contained a request for a certification that shipped goods were not of Israeli origin. The Department also alleged that, in connection with three other letters of credit from Qatar, the bank agreed to refuse to do business with banks on the Arab boycott list or agreed to require other persons to refuse to do business with companies on the Arab boycott list,
and failed to report, or failed to report in a timely manner, boycott-related requests it received from Jordan, Oman, Qatar and the United Arab Emirates.
WILLIAM A. ROESSL
On July 22, 1997, the Commerce Department's Under Secretary for Export Administration William A. Reinsch issued a final decision and order affirming the Administrative Law Judge's recommended decision and order, finding that William A. Roessl of Beverly Hills, CA, when doing business as Enigma Industries,
exported a Floating Point Systems model 164 Array Processor from the United States through Canada to the Federal Republic of Germany without the required export license, and denying all of Roessl's export privileges for ten years.
I.G.G. CORPORATION
On July 17, 1997, I.G.G. Corporation (I.G.G.), King of Prussia, Pa., a wholly-owned subsidiary of IGG Component Technology, Ltd., Portsmouth, England, pleaded guilty in the U.S. District Court for the Eastern District of Pennsylvania to knowingly exporting electronic components from the United States to the Indian Space Research Organization (ISRO) without the required export licenses. I.G.G. was assessed a $50,000 criminal fine, a special assessment of $200 and placed on probation for five years. In addition, on July 17, 1997,
Acting Assistant Secretary Frank Deliberti ordered I.G.G. to pay a $400,000 civil penalty to settle allegations that I.G.G. exported U.S. — origin electronic equipment knowing the goods were intended for end-use by ISRO without the required export licenses in violation of the Commerce Department's Export Administration Regulation that implements the Enhanced Proliferation Control Initiative (EPCI). BXA had issued an "is informed letter" to I.G.G. under the authority of EPCI advising that an individual export license or reexport authorization was required for all exports to ISRO.
EPCI was established to prevent any exports of products to end-users which are known or believed to be involved with the development of weapons of mass destruction. I.G.G. was also denied export privileges for a period of seven years. This denial was suspended for seven years and will thereafter be waived if the company does not violate U.S. export control laws during the suspension period. The case was investigated by the Commerce Department's Office of Export Enforcement field office in New York and the U.S. Customs Service, Philadelphia, PA.
LANSING TECHNOLOGIES CORPORATION
On June 17, 1997, Lansing Technologies Corporation (Lansing Technologies), represented by its president, Red-Chin Yang, pleaded guilty in the U.S. District Court for the Eastern District of New York to exporting a vector computer processor and a data acquisition control system to the People's Republic of China without obtaining the required export licenses from the Department of Commerce. On October 16, 1997, U.S. District Court Judge, Eastern District of New York, imposed a $10,000 fine and a $400 special assessment on Lansing Technologies.
The case was investigated by the Department of Commerce's Office of Export Enforcement field office in New York.
DELL COMPUTER CORPORATION
On June 17, 1997, the Commerce Department imposed a $50,000 civil penalty on Dell Computer Corporation, of Austin, Texas, to settle allegations that it violated the Export Administration Regulations. The Department alleged that, on three separate occasions from March 1992 through June 1992, Dell shipped U.S.- origin computer equipment from the United States to Iran without first obtaining the required validated export licenses from the Department of Commerce.
The allegations are the result of an investigation conducted by Export Enforcement's Dallas Field Office.
DELFT INSTRUMENTS, N.V.
On June 16, 1997, the Commerce Department imposed a $50,000 civil penalty on Delft Instruments, N.V., a firm located in the Netherlands, to settle allegations that Delft made false statements to the Department in connection with an enforcement action. The Department alleged that, on five separate occasions between August 2, 1991 and February 10, 1992, Delft made false and misleading statements of material fact to the Department when Delft opposed the renewal of a 1991 temporary denial order.
The alleged false statements related to representations Delft made to the Department concerning whether members of its Executive Board knew that Delft had exported thermal imaging prototypes to Iraq and Jordan without the required U.S. export licenses. Delft plead guilty in 1992 to charges that it had violated the Arms Export Control Act by exporting U.S.-origin thermal imaging prototypes to Iraq without the required export license. The allegations were the result of an investigation conducted by Export Enforcement's Washington Field Office.
DIGITAL CREATIONS
On June 13, 1997, United States District Court Judge William Walls of the District of New Jersey fined Digital Creations Corporation of Closter, New Jersey, $800,000 for violating the Export Administration Act and Regulations. In December 1994, Digital Creations Corporation had plead guilty to charges that it illegally exported DEC computer equipment to the People's Republic of China without first having obtained the required export license from the Commerce Department. Lawyers for Digital Creations then requested postponement of the sentencing.
The case was investigated by Export Enforcement's New York Field Office.
AAT COMMUNICATIONS
On June 10, 1997, the Commerce Department imposed the maximum civil penalty of $30,000 against AAT Communications of Staten Island, New York, to settle allegations that, in shipping electronic test equipment and communications components that AAT believed to be destined for Iran, the company violated U.S. export control laws. On three separate occasions between December 1990 and February 1991,
AAT exported U.S. — origin electronic test equipment and communications components from the United States to the United Kingdom using general license G-DEST as the authority to export the commodities. The Department alleged that AAT misused general license G-DEST in making those exports because the company knew or had reason to believe that the commodities would be reexported from the United Kingdom to Iran. In each case, the reexport of the commodities from the United Kingdom to Iran had not been approved by the Commerce Department.
The Department's allegations were based on an investigation conducted by Export Enforcement's New York Field Office.
LASERTECHNICS, INC.
On May 30, 1997, the Commerce Department imposed a $180,000 civil penalty on the Albuquerque, New Mexico firm, Lasertechnics, Inc., for allegedly exporting U.S. — origin thyratrons from the United States without the required export licenses.
While neither admitting nor denying the allegations, Lasertechnics cooperated with BXA in connection with the investigation, which was conducted by Export Enforcement's Los Angeles Field Office. Based on the investigation, the Department alleged that, on 36 separate occasions from November 1991 through March 1994, Lasertechnics, Inc.,
exported U.S.-origin thyratrons from the United States to Hong Kong, Ireland, Malaysia, and Singapore without first obtaining the licenses required under the Export Administration Regulations. Thyratrons send a high voltage current through a device and can be used as a nuclear triggering device, but can also be used for medical and scientific purposes.
Hydrogen thyratrons were controlled at the time of the violations for nuclear nonproliferation reasons and are currently controlled for anti-terrorism reasons. Payment by Lasertechnics of $80,000 of the civil penalty will be suspended for three years, and thereafter waived provided that the company commits no violations of the Export Administration Act or Regulations during the period of suspension.
PRESIDENT TITANIUM/HELLMANN INTERNATIONAL FORWARDERS/THYSSEN HANIEL LOGISTICS/JML FREIGHT FORWARDING/ MORRISON EXPRESS CORPORATION
On May 29, 1997, the Commerce Department imposed a $125,000 civil penalty on President Titanium of Hanson, Massachusetts, for allegedly exporting titanium bars on 25 separate occasions from the United States to various foreign countries, England, France, Germany, Sweden, South Africa, Switzerland, and the Netherlands, without the required validated licenses, in violation of the Export Administration Regulations. The civil penalty imposed on President Titanium was the final settlement in a series of related cases that were investigated by Export Enforcement's Boston Field Office. The other four cases, detailed below,
involved the freight forwarders hired by President Titanium, and resulted in the imposition of civil penalties on each of the forwarders. On May 1, 1997, the Commerce Department imposed a $15,000 civil penalty on Hellmann International Forwarders, Inc., of Miami, Florida, for allegedly preparing shipping documents that contained false information. The Department alleged that on three occasions, the Chelsea, Massachusetts, office of Hellmann prepared and used export control documents to ship titanium bars from the United States to Sweden, representing that the exports qualified for export under general license G-DEST, when in fact a validated license was required.
On April 2, 1997, the Commerce Department imposed a $30,000 civil penalty on Thyssen Haniel Logistics, Inc., of Atlanta, Georgia, formerly known as Amerford International Corporation, for allegedly preparing shipping documents that contained false information. The Department alleged that, on six occasions, the Boston office of Thyssen prepared and used export control documents for the purpose of effecting exports of titanium bars from the United States to Germany, representing that the exports qualified for export under general license G-DEST, when in fact a validated license was required. On March 26, 1997,
the Commerce Department imposed a $15,000 civil penalty on JML Freight Forwarding, Inc., of Kearny, New Jersey, formerly known as Jacky Maeder, Ltd., for allegedly preparing shipping documents that contained false information. The Department alleged that, on three occasions, the East Boston, Massachusetts, branch of JML prepared and used export control documents for the purpose of effecting exports of titanium bars from the United States to Switzerland, representing that the exports qualified for export under general license G-DEST, when in fact a validated license was required.
On February 26, 1997, the Commerce Department imposed a $5,000 civil penalty on Morrison Express Corporation, of Chelsea, Massachusetts, for allegedly preparing a shipping document that contained false information. The Department alleged that Morrison represented on a shipping document that titanium bars could be exported under general license G-DEST, when in fact a validated license was required.
FRANCISCO FERREIRO-PARGA/ CARLOS FERNANDEZ/KENNETH BRODER/MANUEL TORRES/PEDRO BORGES
An indictment filed in May of 1997 charged that, from November 1993 through April 1997, Francisco Ferreiro-Parga, Carlos Fernandez, Kenneth Broder, and two co-defendants Manuel Torres and Pedro Borges, illegally exported 38 container loads of commercial foodstuffs and restaurant supplies from South Florida to Cuba by falsely claiming the shipments were destined for the Dominican Republic, Netherlands Antilles, and Mexico. On September 18, 19, and 25, 1997, Ferreiro — Parga, Fernandez, and Broder respectively, pled guilty in the U.S. District Court for the Southern District of Florida to criminal charges relating to the illegal export of commercial foodstuffs and restaurant supplies to Cuba.
Ferreiro-Parga and Broder pled guilty to charges that they violated the International Emergency Economic Powers Act, the Trading with the Enemy Act, and the federal criminal conspiracy statute. Fernandez pled guilty to charges that he violated the Trading with the Enemy Act and the federal criminal conspiracy statute. The pleas were the result of a nine-month investigation by Commerce Department's Office of Export Enforcement field office in Miami, the U.S. Customs Service, and the U.S. Attorney's Office in Miami. On December 5, 1997, a U.S. District Court judge in Miami sentenced Ferreiro-Parga to 18 months' imprisonment and two years' probation for violating U.S. restrictions on trade with Cuba.
On January 25, 1999, the Commerce Department denied Ferreiro-Parga all U.S. export privileges until December 12, 2007, pursuant to Section 11(h) of the Export Administration Act. On February 2, 1998, the Judge sentenced Fernandez to five months' imprisonment, two years' supervised release, five months of which must be spent in home detention and imposed a special assessment of $250. The Judge sentenced Broder to five months' imprisonment, two years' supervised release, imposed a fine of $30,000 and a special assessment fee of $200. On February 2, 1999, the Commerce Department denied Broder all U.S. export privileges until February 2, 2007, pursuant to Section 11(h) of the Export Administration Act.
Torres was found not guilty in a jury trial. Borges remains a fugitive in the case.
ADVANCED VACUUM SYSTEMS, INC. (AVS)
On May 1, 1997, the Commerce Department imposed a $5,000 civil penalty on Advanced Vacuum Systems, Inc. (AVS), of Ayer, Massachusetts, for allegedly exporting commodities to the People's Republic of China (PRC) without obtaining the required export license. Based on an investigation conducted by Export Enforcement's Boston Field Office, the Department alleged that AVS exported a low pressure sintering furnace and spare parts valued at over $600,000 to the PRC without the required export license.
At the time of the export, the furnace was controlled worldwide for nuclear nonproliferation reasons. Because the company disclosed the alleged violation to the Department and took effective action to resolve the problem, $2,000 of the $5,000 penalty was suspended for three years. The suspended portion of the penalty will be waived after three years as long as there are no further violations.
COMPAQ COMPUTER CORPORATION
On April 18, 1997, the Commerce Department imposed a civil penalty of $55,000 on Compaq Computer Corporation, of Houston, Texas, for allegedly exporting computer equipment without obtaining the required validated licenses, in violation of the Export Administration Regulations. Based on an investigation conducted by Export Enforcement's Dallas Field Office, BXA alleged that, on three separate occasions from September 1992 through June 1993, Compaq exported computer equipment from the United States to Venezuela, Chile, and the People's Republic of China without obtaining the required validated licenses.
At the time of the exports, the computer equipment was controlled for national security reasons. The penalty imposed reflects the fact that Compaq disclosed the alleged violation to the Department and took action to ensure that future exports would have the necessary authorization from BXA.
ALLVAC
On January 22, 1997, the Department imposed a $122,500 civil penalty on Allvac, a Monroe, North Carolina, manufacturer, to settle allegations that the company violated the Export Administration Regulations. Based on an investigation conducted by Export Enforcement's Washington Field Office, the Department alleged that Allvac made 48 shipments of titanium alloy products from the United States to Australia, China, France, Ireland, Israel, Italy, Japan, Germany, Switzerland, Taiwan, and the United Kingdom,
as well as one shipment of a maraging steel product from the United States to Germany, all without the required U.S. export licenses. The shipments of the titanium alloy and maraging steel products, which are controlled for nuclear nonproliferation reasons, occurred from September 1991 to June 1993. Allvac voluntarily disclosed these shipments to the Department, and the Department agreed to suspend payment of $47,500 of the penalty for one year, and then to waive payment of that amount provided Allvac commits no violation of the Regulations during that period.
RMI TITANIUM
On January 8, 1997, the Commerce Department imposed a $160,000 civil penalty on RMI Titanium, of Niles, Ohio, for alleged violations of the Export Administration Act and Regulations. Based on an investigation conducted by Export Enforcement's Washington Field Office, the Department alleged that RMI Titanium violated the Export Administration Act and Regulations when it made six shipments of titanium alloy products to France and Israel without obtaining the required export licenses. The Department also alleged that RMI Titanium made false and misleading statements of material fact on export control documents.
The export of these titanium alloy products from the United States is controlled for nuclear nonproliferation reasons.
On December 20, 1996, New World Transtechnology (NWT), Galveston, Texas, plead guilty to a criminal information that charged the company with two counts of violating the International Emergency Economic Powers Act, and one count of making false statements.
A criminal fine of $10,000 was imposed and a special assessment fine of $600 was levied against NWT. On March 19, 1998, the Department imposed a ten-year denial of export privileges on New World Transtechnology pursuant to Section 11(h) of the EAA.
Export Enforcement's Dallas Field Office initiated an investigation of NWT based on information provided by Export Enforcement's San Jose Field Office. As a result of the Dallas Field Office's investigation, the criminal information filed in the Galveston, Texas,
division of the U.S. District Court for the Southern District of Texas, alleged that NWT had exported three Sun Microsystems computers to a nuclear equipment factory located in the People's Republic of China in August 1992, without the required validated export license. It was also alleged that, in October 1992, NWT attempted to illegally export a MIPS computer to the same destination in the People's Republic of China.
Export Enforcement Special Agents seized another computer before it could be shipped to China via Hong Kong.
KORELSKI/DOORNBOS GMBH/HELCO COMPANY, INC.
On December 18, 1996, the Department imposed a four-year denial of export privileges on both Doornbos GmbH of Solingen, Germany, and its general manager, Helmut Korelski, to settle allegations that they conspired to evade export control laws which restrict shipments of U.S.-origin equipment to Libya. As a result, neither Doornbos nor Korelski may engage in any transaction involving commodities, technology, or software exported from the United States. Based on a joint investigation conducted by Export Enforcement's Washington Field Office and the U.S. Customs Service,
the Department alleged that Doornbos and Korelski acquired U.S.-made machine parts and construction equipment by claiming that the ultimate destination was Germany, when in fact the goods were sold to the Dong Ah Consortium for use in the Great Man-Made River Project in Libya. As a result of the investigation, Doornbos and Korelski also plead guilty to one count of conspiracy and Doornbos received a criminal fine of $500,000 in U.S. District Court in Ohio. On February 19, 1998, the Commerce Department imposed a two-year denial of export privileges and a $90,000 civil penalty on Helco Company Inc.
of Warren, Ohio for allegedly conspiring to evade U.S. export laws that restrict exports to Libya by selling equipment and spare parts for use in construction in the Great Man- Made River Project in Libya to Doornbos GmbH. As part of the settlement, $40,000 of the civil penalty and the denial of export privileges will be suspended and then waived provided that Helco does not violate U.S. export control laws during the suspension period. Helco also pled guilty in federal court to a criminal charge of conspiring to export machine parts to Libya. Helco will pay a $250,000 criminal fine and a special assessment of $200.
YUCHAI AMERI
On October 2, 1996, Yuchai America Corporation of Cleveland, Ohio, agreed to pay a civil penalty of $200,000 for alleged violations of the Export Administration Regulations. As the result of an investigation conducted by Export Enforcement's New York Field Office, the Commerce Department alleged that, in May 1994, Yuchai America attempted to export two five-axis milling machines to the People's Republic of China without the required validated U.S. export license, and made false and misleading statements of material fact on export control documents.
Yuchai America neither admitted nor denied the allegations. Yuchai America is an affiliate of Yuchai Machinery Company, Ltd. of China.
SIGMA CHEMICAL COMPANY
On July 8, 1996, the Commerce Department imposed a civil penalty of $480,000 on Sigma Chemical Company, based in St. Louis, Missouri, for allegedly violating export controls on biological agents by shipping U.S. — origin biotoxins to various countries on 48 separate occasions between July 1992 and January 1993 without the required export licenses.
This action marked the first settlement with a firm alleged to have exported biological agents illegally. The investigation which led to this settlement began in 1992. It was prompted by a General Accounting Office (GAO) study of U.S. and international efforts to ban biological weapons, requested by then-Senator Al Gore. After the follow-up investigation by BXA's Chicago Export Enforcement Field Office,
it became clear that Sigma's export compliance system failed to properly interpret and implement the licensing requirements of the Export Administration Regulations.
SOMBERGS/ROTHCO
On June 3, 1996, Milton Somberg, president of Rothco, Smithtown, New York, and his son, Howard Somberg, vice president of the company, were arrested by Special Agents from Export Enforcement's New York Field Office and from the U.S. Customs Service. In a complaint filed in U.S. District Court for the Eastern District of New York, the two were charged with illegally exporting military and police products controlled for export by the U.S. Departments of State and Commerce.
The illegal exports included stun guns, tear and pepper gas, handcuffs, night vision equipment, semi-automatic ammunition magazines, deactivated hand grenades and chemical protective suits. The illegal exports were destined to various countries, including Japan, Peru, Bolivia, Paraguay and the Czech Republic. The investigation which led to the arrests began after the receipt of allegations of possible links between U.S. military and police surplus equipment firms and the Aum Shinrikyu ("Aum"),
a Tokyo-based religious sect whose leader was prosecuted for the March 20, 1995, fatal sarin gas attack on the Tokyo subway system. The investigation revealed that, in the days prior to the March 20 attack, a company owned by the Aum had contracted with Rothco for the purchase and export of 400 Israeli-made gas masks. On March 2, 1995, Rothco shipped ten cartons of the gas masks, falsely labeled as "facemasks," to Fremont, California, for transshipment to Tokyo. U.S. Customs agents seized the gas masks prior to their scheduled export to Japan.
David McKeeve, a Scottish national, was arrested on November 2, 1995, by Special Agents from Commerce's Export Enforcement Boston Field Office and from U.S. Customs. At the time, McKeeve was attempting, but failed, to export controlled computer equipment to Libya, via Cyprus. He and his company, McNeil International, were subsequently indicted for violations of both the Export Administration Regulations and of the Office of Foreign Assets Control's Libyan Sanctions Regulations. He was also charged with conspiracy and making false statements. On May 30, 1996, McKeeve and McNeil International were found guilty on all charges in the U.S. District Court in Boston, Massachusetts. On August 22, 1996, McKeeve was sentenced to 51 months in federal prison,
36 months' supervised release, and a $150 special assessment, while McNeil International received a criminal fine of $125,000 and a $200 special assessment.
JAMES L. STEPHENS/WEISSER'S SPORTING GOODS
On November 28, 1995, the Commerce Department imposed a 15-year denial of export privileges and a $60,000 civil penalty on James L. Stephens, president and co-owner of Weisser's Sporting Goods, National City, California, for the alleged illegal export of certain U.S.-origin shotguns to Namibia and South Africa. Separately, on January 16, 1996, Weisser's Sporting Goods was fined of $30,000 and placed on three years' probation in the U.S. District Court for the Southern District of California. Weisser's Sporting Goods had pled guilty to one count of violating U.S. export control laws in connection with the export of shotguns to South Africa in the District Court on November 20, 1995.
The case was the result of an investigation by the Commerce Department's Los Angeles Office of Export Enforcement.
EDWARD A. JOHNSON AND SWISSCO MANAGEMENT GROUP, INC.
On August 7, 1995, Edward A. Johnson, an employee of Teledyne Industries, Inc., was sentenced by a U.S. District Court judge in Miami to 41 months' imprisonment and fined $25,000 for his role in illegally exporting 150 tons of zirconium to Chilean arms maker Carlos Cardoen. The zirconium was used as an incendiary agent in cluster bombs Cardoen sold to Iraq in the 1980's. Johnson was convicted by a jury in Miami on April 4, 1995, on charges of conspiracy, false statements on export licenses submitted to the Commerce Department, and violating the Arms Export Control Act. Evidence presented in the eight-week trial showed that Johnson, a salesman at Teledyne's Wah Chang division in Oregon, knew Cardoen was using the zirconium to make cluster bombs for Iraq,
even though export license applications submitted to the Commerce Department claimed the end use was for civilian mining purposes in Chile and Peru. Johnson was also sentenced to three years' supervised release after serving 41 months. On April 28, the U.S. Court of Appeals for the 11th Circuit affirmed Johnson's conviction. Additionally, the judge sentenced Johnson's co- defendant at trial, Swissco Management Group, Inc., to pay fines totaling $1,309,230. The same jury that convicted Johnson found Swissco guilty of conspiracy and violating the Export Administration Act. Swissco is a defunct Miami company which acted as Cardoen's U.S. purchasing arm on the zirconium sales. Teledyne was also a co-defendant in the case, but settled pending charges before trial (see preceding story).
CARLOS CARDOEN Carlos Cardoen, the Chilean arms merchant involved with Teledyne in the matters described above, and several related parties, were also indicted in connection with the scheme to illegally export zirconium to Chile, where it was used to manufacture cluster bombs for Iraq. Cardoen is a fugitive from justice. Cardoen has paid $8.6 million to resolve civil forfeiture actions that arose from activities relating to the illegal acts that are the basis for the indictment returned against him in Miami.
HALLIBURTON
On July 25, 1995, Assistant Secretary for Export Enforcement John Despres signed an order assessing a civil penalty of $2,610,000 against the Halliburton Company of Texas. The civil penalty was the largest fine imposed by the Department for export violations, and was part of a global settlement related to unauthorized exports and reexports of oil field equipment made to Libya by two Halliburton subsidiaries, Halliburton Logging Services (HLS) and Halliburton Geophysical Services (HGS). HLS exported six pulse neutron generators to Libya between December 1987 and August 1989,
and made three unauthorized exports of pulse neutron generators to Kuwait or Yemen between August 1988 and January 1989. HGS made 68 unauthorized reexports of spare parts to Libya between April 1989 and April 1991, and one illegal export of U.S.-origin technical data to Libyan nationals in Tunisia in May 1990. Resolving the criminal proceedings in this case, a judge in the U.S. District Court for the Southern District of Texas accepted Halliburton's plea agreement with the U.S. Attorney's Office,
and imposed a criminal penalty of $1,200,000 for three violations of the International Emergency Economic Powers Act in connection with the export of the pulse neutron generators to Libya. Pakistan, SABRE agreed to refuse to subcontract any work to Israeli-based businesses or individuals. Additionally, the Department alleged that SABRE failed to report promptly its receipt of the request to make this agreement. SABRE voluntarily disclosed the transaction that led to the allegations and fully cooperated with the Department's investigation.
FIBER MATERIALS, INC.
On March 31, 1995, Fiber Materials, Inc., a Maine corporation; its wholly-owned subsidiary, Materials International of Acton, Massachusetts; and the company's top two officers, Walter L. Lachman of Concord, Massachusetts, and Maurice H. Subilia, Jr. of Kennebunkport, Maine,
were each found guilty of one count of violating the Export Administration Act and one count of conspiracy. The evidence at trial established that the defendants conspired to, and did, export a control panel in April 1988 from the United States to the Defense Research Development Laboratory in India, intending for it to operate a production-size hot isostatic press to be subsequently provided by the defendants.
The control panel required a validated export license from the U.S. Department of Commerce for export from the United States to India. The evidence showed that no such license was ever obtained by the defendants. The evidence also established that a production-size hot isostatic press was, in fact, later manufactured in Europe at the defendants' direction, and shipped from there to India. In 1991 and 1992, defendants Subilia and Fiber Materials, Inc.,
directed employees to travel to India to install and make fully operational the carbon/carbon processing equipment in India, which included connecting the control panel to the production-size hot isostatic press.
STORM KHEEM
Storm Kheem, a resident of Bayshore, New York, pled guilty on January 27, 1995, to violating provisions of the Commerce Department's Export Administration Regulations that implement the Enhanced Proliferation Control Initiative (EPCI). The EPCI regulations prohibit, inter alia, U.S. persons from directly contributing to the design, development, production, stockpiling, and use of weapons of mass destruction. The investigation discovered that Kheem and others arranged to transport ammonium perchlorate, a highly-explosive chemical used to manufacture rocket fuel, from the People's Republic of China to Iraq via Jordan. The chemical had been deliberately mislabeled as a non-explosive water purification chemical to disguise its contents.
The Commerce EPCI regulations reached Kheem's activities regarding this transaction even though it involved foreign-origin rocket fuel. Kheem also plead guilty to violating the Iraqi Sanctions Regulations. This investigation was conducted jointly by Commerce, Customs, and the FBI.
ELEDYNE INDUSTRIES, INC./TELEDYNE WAH CHANG
Teledyne Industries, Inc. plead guilty in two separate cases, one in Miami, Florida, on January 26, 1995, and the other in Washington, D.C. on January 27, 1995. In addition, a division of the company, Teledyne Wah Chang of Albany, Oregon, was denied export privileges and fined by the Commerce Department, all for illegally exporting zirconium and making false statements on Commerce license applications and shipping documents. In the Miami case, Teledyne Industries, Inc. was assessed a $3.9 million criminal fine for violations relating to zirconium exports to companies controlled by Carlos Cardoen, a Chilean arms manufacturer.
Cardoen used the zirconium to make cluster bombs which he then sold to Iraq. In the Washington case, Teledyne Industries, Inc. was assessed a $5,498,125 criminal fine for violations relating to zirconium exports that were supposedly destined for Greece, but which actually were rerouted to another destination. Commerce imposed a $2 million civil penalty against Teledyne Wah Chang, the division that made the illegal exports at issue in the criminal cases. Commerce also imposed a three-year export denial against Teledyne Wah Chang, all but three months of which were suspended. During the remainder of the denial period,
the division was on "probation." The State Department also imposed a $1.5 million civil penalty against Teledyne Industries, Inc.
