Arizona Aviation Company and CEO Indicted for Alleged Violations of the Arms Export Control Act

A federal grand jury in Phoenix returned a two-count indictment against Floyd D. Stilwell, of Phoenix, Arizona, and Marsh Aviation Company, of Mesa, Arizona, for a violation of the Arms Export Control Act and Conspiracy.

The indictment alleges that beginning on and before November 2005 and continuing up to February 5, 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 engines are a designated item on the United States Munitions List which under the Arms Export Control Act makes it illegal to export without a license or written authorization from the Department of State. The T-76 aircraft engine was designed for the OV-10 Bronco Aircraft which is a Light Armed Reconnaissance Aircraft specifically suited for counter-insurgency missions.

Additionally, the indictment alleges that Stilwell and Marsh Aviation Company furnished assistance to members of the Venezuelan Air Force, including training in the assembly, testing, repair, maintenance, modification, operation, and use of the T-76 military aircraft engine, without having obtained the necessary license or written authorization from the Department of State. As a result of the indictment, Stilwell and Marsh Aviation were summoned to appear in court.

It seems that the violations in this case stem from the lack of a proper license. Unfortunately, Stilwell and the Company cannot claim lack of knowledge as a defense. The law in this area, specifically export licensing, is very strict on imposing licensing requirements. If the government can prove failure to acquire a license beyond a reasonable doubt, it will result in a violation. The Company will most likely receive a fine, however, Stilwell may be facing a fine and/or a prison sentence.

It is also unfortunate that the government is legally permitted to include a conspiracy charge against an individual and a corporation. Because a corporation is considered a legal entity, an individual can be held liable for conspiring with it, regardless of the fact that it seems counter-intuitive.

A conviction for a violation of the Arms Export Control Act carries a maximum penalty of 10 years, a $250,000 fine, or both. A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine, or both.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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