Accused Military Tech Exporter Pleads Not Guilty in N.Y.

October 22, 2012

Bloomberg Businessweek on October 22, 2012 released the following:

“By Christie Smythe

Alexander Fishenko, owner of Houston-based Arc Electronics Inc., pleaded not guilty in a Brooklyn, New York, federal court to illegally exporting microelectronics to Russian military and intelligence agencies.

Fishenko, a U.S. citizen formerly of Kazakhstan, appeared today before U.S. District Judge Sterling Johnson. He’s accused in a 25-count indictment of violating the International Emergency Economic Powers Act and the Arms Export Control Act, obstructing justice and operating as an unregistered agent of the Russian government.

Arc shipped at least $50 million worth of technology goods to Russia without an export license, the government alleged. Ten other individuals, most of whom were employees of either Arc or a Moscow-based procurement firm Apex System LLC, were charged in the indictment, which was unsealed on Oct. 3.

The computer chips supplied by Arc appear similar to those used in missiles and fighter jets, the government said in court papers. One of the end users of the electronics was the Federal Security Service, successor to the KGB spy agency, according to the filings.

A lawyer for Fishenko, Richard Rosenberg, who was appointed by the court today, said in a phone interview after the hearing that he wasn’t sure whether his client will seek bail. He declined to comment further.

The case is U.S. v. Fishenko, 1:12-cr-626, U.S. District Court, Eastern District of New York (Brooklyn).”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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


Former security firm Blackwater settles with criminal prosecutors

August 9, 2012
Blackwater
“A special police SWAT team from Blackwater. Credits: Blackwater/Police Times”

Examiner.com on August 8, 2012 released the following:

“BY: JIM KOURI

The liberal-left’s least favorite company, security contractor Blackwater, through it’s new corporate name Acadmi LLC, agreed on Tuesday to pay more than $7 million in fines in order to settle federal charges regarding alleged arms smuggling and other crimes.

The documents. which were unsealed Tuesday in U.S. District Court in Raleigh, North Carolina, stated that the company’s executives agreed to pay the fine as part of a deferred prosecution agreement to settle all 17 violations of law.

The agreement also acknowledges and references a $42 million settlement between the company and the Department of State as part of a settlement of violations of the Arms Export Control Act and the International Trafficking in Arms Regulations, according to officials at Justice Department.

According to Justice Department documents, list of violations includes the possession automatic weapons in the United States without registration, deceptive statements made to government firearms officials about weapons tranferred to the Kingdom of Jordan, and passing secret plans for armored personnel carriers to Sweden and Denmark without U.S. government approval.

A separate violation entailed illegally shipping body armor to nations overseas.

“Compliance with the firearms laws of the United States in both domestic and international commerce is essential to maintaining order and accountability,” stated ATF Special Agent in Charge Wayne L. Dixie. “Whether it is an individual or a corporation, we will enforce the provisions of the federal gun laws equally. If violations are discovered, we will move to hold those responsible for the violations accountable for their actions.”

Federal prosecutors and law enforcement officials said Blackwater, which has held billions in U.S. security contracts in Iraq and Afghanistan, repeatedly flouted U.S. laws.

Blackwater was founded in North Carolina in 1997 by a former Navy SEAL officer, Erik Prince, and the company became well-known working for the U.S. government during the Iraq War. Prince is said to be worth over one billion dollars.

IRS-Criminal Investigation Special Agent in Charge Jeannine A. Hammett stated, “High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. That trust is broken when such officials abuse their power and commit crimes to line their own pockets. An international fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing.”

A provision in Academi-United States settlement prohibits the company executives from making any public statements “contradicting any aspect” of the agreement. Any such statement opens the door to nullification of the settlement by the U.S. Justice Department.

“Blackwater profited substantially from Department of Defense (DoD) contracts in support of overseas contingency operations over the past decade,” commented Special Agent in Charge John F. Khin, Southeast Field Office, Defense Criminal Investigative Service (DCIS). “This investigation showed that no contractor is above the law and that all who do business with the DoD will be held accountable. With this agreement, Blackwater acknowledged their wrongdoing and took steps to remedy and mitigate the damage they caused to the United States and the public trust.”

“For an extended period of time, Academi/Blackwater operated in a manner which demonstrated systemic disregard for U.S. government laws and regulations. Today’s announcement should serve as a warning to others that allegations of wrongdoing will be aggressively investigated,” said Chris Briese, Special Agent in Charge of the Charlotte Division of the FBI.

The agreement also acknowledges and references a $42 million settlement between the company and the Department of State as part of a civil administrative settlement of violations of the Arms Export Control Act and the International Trafficking in Arms Regulations, according to the Justice Department.

“The left-wing media and political activists hate the military and police but fear being fingered as anti-Americans, so all their hatred for soldiers and cops is transferred to private firms that offer military and law enforcement services,” said Sid Franes, a former Marine, police detective and security firm owner.

“Now that we have an administration that shares the views of the radical left, you will see more and more cases against private security, military and intelligence firms,” Franes predicted.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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


Two Taiwanese Nationals Charged in New Jersey with Allegedly Conspiring to Export Sensitive U.S. Military Technology to China

April 25, 2012

The Federal Bureau of Investigation (FBI) on April 25, 2012 released the following:

Alleged Conspiracy Uncovered Through Investigations into Large-Scale, International Schemes to Import Counterfeit Goods and Drugs Through Port Newark

NEWARK—Two Taiwanese nationals are charged for allegedly seeking to export sensitive U.S. military technology to China after federal agents investigating counterfeit goods smuggling uncovered plots to smuggle drugs into and sensitive defense articles out of the United States, Paul J. Fishman, U.S. Attorney for the District of New Jersey; and Michael B. Ward, Special Agent in Charge for the FBI Newark Division, announced today.

Hui Sheng Shen, aka “Charlie,” 45; and Huan Ling Chang, aka “Alice,” 41, were previously charged in connection with an alleged scheme to import 50 kilograms of crystal methamphetamine, or “meth,” from Taiwan into the United States. Those charges arose as a result of parallel international investigations that also disrupted conspiracies to import hundreds of millions of dollars in counterfeit goods from China.

Federal agents arrested Shen and Chang on February 25, 2012 in New York. The pair was charged in a criminal complaint unsealed March 2, 2012, with one count of conspiracy to import and one count of importation of meth. The amended complaint unsealed today also charges Shen and Chang with conspiracy to violate the Arms Export Control Act.

According to the amended complaint, approximately one kilogram of nearly pure crystal meth was purchased from Shen and Chang as part of an undercover law enforcement operation, which stopped the importation of dozens of additional kilograms of the drug. Based on relationships undercover law enforcement agents built with Shen and Chang, the two defendants allegedly provided a list of sensitive defense articles they sought to buy and planned to return to connections in China. The articles included unmanned aerial vehicles (commonly known as drones), E-2C Hawkeye surveillance airplanes, and stealth technology relating to F-22 fighter planes.

Shen and Chang are scheduled to appear before U.S. Magistrate Judge Cathy L. Waldor this afternoon in Newark federal court.

“Initial investigations into counterfeit goods importation led federal law enforcement to a meth trafficking operation and an alleged plot to export some of America’s most sensitive weapons and related technology to China,” said U.S. Attorney Fishman. “The charges against Shen and Chang illustrate starkly why we do this work, and what is at stake when the security of our ports is breached for any reason. National security isn’t an a la carte enterprise. The same conduits that bring knockoff sneakers flood our communities with illegal drugs and establish dangerous criminal relationships.”

According to documents filed in this and related cases and the amended criminal complaint unsealed today:

Soon Ah Kow, 72, of Hong Kong, was charged by indictment with drug importation, smuggling, and counterfeit goods trafficking offenses by a Newark federal grand jury on January 6, 2012 and arrested on February 25, 2012 in Manila, the Philippines. Ah Kow was in the business of brokering international transactions of illegal goods. Operating out of Southeast Asia, he met with and introduced his co-conspirators to undercover federal agents (FBI UCs) for the purpose of importing counterfeit goods and narcotics from Asia to the United States.

In late 2010, Ah Kow began discussions with FBI UCs about narcotics importation, meeting in February 2011 with FBI UCs in Manila where he introduced them to his associates, Shen and Chang. In Manila, Ah Kow told the FBI UCs that Shen and Chang represented the interests of Ah Kow’s associates, wealthy narcotics dealers who had been trafficking drugs for more than 25 years. Ah Kow and Shen arranged for the delivery of a sample of crystal meth to the FBI UCs’ hotel lobby, which arrived within hours of a call Ah Kow placed to an associate.

Following negotiations over recorded telephone calls and intercepted e-mails, the FBI UCs arranged payment to cover the price of one kilogram of crystal meth, shipping costs, and a broker’s fee for Ah Kow. In July 2011, the FBI UCs received a bill of lading for the container that included the meth, which arrived at the port on August 9, 2011. The drugs were discovered secreted within the container in the exact location described by Shen and Chang.

During negotiations for the one kilogram meth deal, Shen and Chang made clear they usually did larger transactions, but agreed to do a smaller transaction to establish trust among the parties. They discussed shipping more than 50 kilograms of meth to the United States.

In September 2011, Shen and Chang asked whether the FBI UCs could obtain and pass along highly sensitive military technology, specifically, a Hawkeye reconnaissance aircraft, which the defendants instructed should be referred to as the “big toy.”

During other recorded conversations, the defendants indicated their clients were interested in a range of American military technology. Shen, Chang, and an FBI UC met in October 2011 in Las Vegas, where they discussed narcotics and the export of the technology. Chang provided the FBI UC with a list of specific military technology items they sought.

At a Las Vegas meeting, FBI UCs asked what purposes Shen and Chang had for any military technology they were seeking to obtain. When an FBI UC stated, “I would prefer not to make money on something that would hurt the United States,” Shen replied, “I think that all items would hurt America.”

During a series of recorded phone conversations and in-person meetings, the defendants told FBI UCs that their associates were connected to the Chinese government, worked for a Chinese intelligence company like the CIA, and would be using government money to make the purchases.

Describing their associates in one call, Chang said, “Their status is a bit special, so in order to travel to U.K. or United States, all developed countries, for them it’s hard for them to…” Shen interrupted, “They are spies. They, they, they are very hard to get a visa. They cannot go to U.S. or U.K.”

Shen and Chang returned to the United States in February 2012 to finalize negotiations for a series of larger drug transactions and to look at and photograph certain military technology that the FBI UCs said they had acquired. Shen and Chang met with FBI UCs in New York to see a small drone, used by the U.S. military, as well as manuals associated with other drones. Shen and Chang had purchased cameras for the explicit purpose of taking photographs of the defense technology. The pair planned to avoid law enforcement detection by taking photographs, deleting those photographs, and bringing the memory cards back to China, where a contact had the ability to recover deleted items. The defendants took the photos, but FBI agents were there to arrest them before the photos could be deleted.

The conspiracy to violate the Arms Export Control Act charge carries a maximum potential penalty of five years in prison and a $250,000 fine. The meth importation conspiracy and meth importation charges each carry a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison and a $4 million fine.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Ward in Newark, for the investigation leading to the export violation conspiracy charge, as well as ICE Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees, for its work in the parallel investigation. He also thanked Customs and Border Protection, under the direction of Robert E. Perez, Director, New York Field Operations, for its important role. U.S. Attorney Fishman also credited the U.S. Air Force Office of Investigations; FBI special agents in Manila, Beijing, Hong Kong, and Taiwan; the Philippine authorities; and the Department of Justice’s Organized Crime and Gangs Section, National Security Division, Office of Enforcement Operation, and Office of International Affairs for their contributions.

The government is represented by Assistant U.S. Attorney Zach Intrater and Chief Erez Liebermann of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Andrew Pak of the Office’s General Crimes Unit in Newark.

The charges and allegations contained in the amended complaint charging Shen and Chang and the indictment charging Ah Kow are merely accusations, and the defendants are considered innocent unless and until proven guilty.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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


Australian Man and His Firm Indicted in Alleged Plot to Export Restricted Military and Other U.S. Technology to Iran

March 1, 2012

The Federal Bureau of Investigation (FBI) on February 29, 2012 released the following:

“WASHINGTON—An Australian man and his company have been indicted today by a federal grand jury in the District of Columbia for conspiring to export sensitive military and other technology from the United States to Iran, including components with applications in missiles, drones, torpedoes, and helicopters.

The five-count indictment charges David Levick, 50, an Australian national, and his company, ICM Components Inc., located in Thorleigh, Australia, each with one count of conspiracy to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act; as well as four counts of illegally exporting goods to an embargoed nation in violation of IEEPA; and forfeiture of at least $199,227.41.

The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John J. McKenna, Special Agent in Charge of the Commerce Department’s Office of Export Enforcement Boston Field Office; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Kathryn Feeney, Resident Agent in Charge of the Defense Criminal Investigative Service (DCIS) Resident Agency in New Haven, Connecticut; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston.

Levick, who is the general manager of ICM Components, remains at large and is believed to be in Australia. If convicted, Levick faces a potential maximum sentence of five years in prison for the conspiracy count and 20 years in prison for each count of violating IEEPA.

According to the indictment, beginning as early as March 2007 and continuing through around March 15, 2009, Levick and ICM solicited purchase orders from a representative of a trading company in Iran for U.S.-origin aircraft parts and other goods. This person in Iran, referenced in the charges as “Iranian A,” also operated and controlled companies in Malaysia that acted as intermediaries for the Iranian trading company.

The indictment alleges that Levick and ICM then placed orders with U.S. companies on behalf of Iranian A for aircraft parts and other goods that Iranian A could not have directly purchased from the United States without U.S. government permission. Among the items the defendants allegedly sought to procure from the United States are the following:

  • VG-34 Series Miniature Vertical Gyroscopes. These are aerospace products used to measure precisely and/or maintain control of pitch and roll in applications such as helicopter flight systems, target drones, missiles, torpedoes, and remotely piloted vehicles. They are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.
  • K2000 Series Servo Actuators designed for use on aircraft. The standard Servo Actuator is designed to be used for throttle, nose wheel steering, and most flight control surfaces. High-torque Servo Actuators are designed to be used for providing higher torque levels for applications such as flaps and landing gear retraction. These items are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.
  • Precision Pressure Transducers. These are sensor devices that have a wide variety of applications in the avionics industry, among others, and can be used for altitude measurements, laboratory testing, measuring instrumentations, and recording barometric pressure. These items may not be exported to Iran without a license from the Treasury Department.
  • Emergency Floatation System Kits. These kits contained landing gear, float bags, composite cylinder, and a complete electrical installation kit. Such float kits were designed for use on Bell 206 helicopters to assist the helicopter when landing in either water or soft desert terrain. These items may not be exported to Iran without a license from the Treasury Department.
  • Shock Mounted Light Assemblies. These items are packages of lights and mounting equipment designed for high vibration use and which can be used on helicopters and other fixed wing aircraft. These items may not be exported to Iran without a license from the Treasury Department.

According to the charges, Levick and ICM, when necessary, used a broker in Florida to place orders for these goods with U.S. firms to conceal that they were intended for transshipment to Iran. The defendants also concealed the final end-use and end-users of the goods from manufacturers, distributors, shippers, and freight forwarders in the United States and elsewhere, as well as from U.S. Customs and Border Protection. To further conceal their efforts, the defendants structured payments between each other for the goods to avoid restrictions on Iranian financial institutions by other countries.

The indictment further alleges that Levick and ICM wired money to companies located in the United States as payment for these restricted goods. Levick, ICM, and other members of the conspiracy never obtained the required licenses from the Treasury or State Department for the export of any of these goods to Iran, according to the charges.

In addition to the conspiracy allegations, the indictment charges the defendants with exporting or attempting to export four specific shipments of goods from the United States to Iran in violation of IEEPA. These include a shipment of 10 shock mounted light assemblies on Jan. 27, 2007; a shipment of five precision pressure transducers on Dec. 20, 2007; a shipment of 10 shock mounted light assemblies on March 17, 2008; and a shipment of one emergency floatation system kit on June 24, 2008.

This investigation was jointly conducted by agents of the Department of Commerce Office of Export Enforcement, FBI, DCIS and ICE-HSI. The prosecution is being handled by Assistant U.S. Attorneys John W. Borchert and Ann Petalas of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Jonathan C. Poling of the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that an indictment contains mere allegations. Defendants are presumed innocent unless and until proven guilty in a court of law.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

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.


Members of International Procurement Network Federally Indicted for Allegedly Supplying Iran with U.S. Military Aircraft Components

June 23, 2011

The Department of Justice on June 23, 2011 released the following press release:

Total of 12 Defendants in U.S., France, U.A.E. and Iran Charged

MACON, Ga. – Seven individuals and five corporate entities based in the United States, France, the United Arab Emirates (U.A.E.) and Iran have been indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran. One of the defendants and his company were sentenced yesterday, with the individual receiving nearly five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.

Federal prosecutors today unsealed a superseding indictment in Macon, Ga., charging eight of the defendants with conspiring to violate and violating the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations, as well as conspiracy to defraud the United States, money laundering and false statement violations. Charges against the four other defendants, who have pleaded guilty in the case, are contained in the original indictment in the investigation that was filed previously.

The indictment and other enforcement actions were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Michael J. Moore, U.S. Attorney for the Middle District of Georgia; Brock Nicholson, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) office in Atlanta; Brian D. Lamkin, Special Agent-in-Charge of the FBI’s Atlanta Field Division; and Robert Luzzi, Special Agent-in-Charge of the Commerce Department, Office of Export Enforcement (OEE) Miami Field Office.

The Defendants

Thus far, four defendants based in the United States have been charged as part of the investigation. They are The Parts Guys LLC, a company in Port Orange, Fla., that maintains a warehouse at the Middle Georgia Municipal Airport in Macon, as well as the president of The Parts Guys, Michael Edward Todd, who is a U.S. national. In addition, Galaxy Aviation Services, a company in St. Charles, Ill., and its president, Hamid Seifi, also known as Hank Seifi, an Iranian-born U.S. national, have been charged.

Todd was arrested last year in Atlanta based on the original indictment in the case. Todd and his company, The Parts Guys, pleaded guilty to conspiracy to violate the AECA on May 9, 2011, and have yet to be sentenced. Federal agents arrested Seifi in Atlanta earlier this year, also based on the original indictment. Seifi and his company, Galaxy Aviation, pleaded guilty on Feb. 24, 2011, to conspiracy to violate the AECA and violating the IEEPA. Yesterday, Seifi was sentenced to 56 months in prison followed by three years of supervised release, a fine of $12,500 and forfeiture of $153,950, while Galaxy Aviation, which is now defunct, received a $400 special assessment.

Three defendants based in France have also been indicted as part of the investigation. They are Aerotechnic, a company in Pinsaguel, France, and its president, Philippe Sanchez, a French national, as well as Luc Teuly, a French national and the sales manager of Aerotechnic. Each of these defendants remains a fugitive.

Two defendants based in the U.A.E. have also been indicted in the case. They are Aletra General Trading, a company in Dubai doing business as “Erman & Sultan Trading Co,” and Syed Amir Ahmed Najfi, an Iranian national and purchaser for Aletra. Najfi remains a fugitive.

Three defendants based in Iran have also been charged in the case. They are Sabanican Company, a company in Tehran, and its president, Hassan Seifi, an Iranian national, as well as Reza Seifi, an Iranian national and the managing director of Sabanican Company. Each of these defendants remains at large.

As part of the U.S. government’s coordinated action against this procurement network, the Commerce Department announced today that it will add the eight defendants in France, Iran and the U.A.E. to its “Entity List.” The Entity List provides notice to the public that certain exports, re-exports and transfers (in-country) to parties identified on the Entity List require a license from the Commerce Department, and that availability of license exceptions in such transactions is limited. All eight parties will be added to the Entity List with a licensing requirement for all items subject to the Commerce Department export regulations and with a presumption of denial.

The Charges

According to the charges, the defendants conspired to export components for attack helicopters and fighter jets to Iran without obtaining the required U.S. export licenses. These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.

Defendant Najfi and his firm in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from Todd and his company, The Parts Guys, in the United States. Todd and other conspirators then attempted to and did cause the export of the aircraft parts to the U.A.E.

Defendant Hank Seifi and his firm in Illinois also allegedly placed orders and purchased U.S. aircraft parts from Todd and his company in Georgia — on behalf of Hassan Seifi, Reza Seifi and their company in Iran. According to the charges, Todd and other conspirators then caused these aircraft parts to be exported to Iran via the defendants in France: Sanchez, Teuly and their company, Aerotechnic.

The charge of conspiracy carries a maximum penalty of five years in prison, while violating the AECA carries a maximum penalty of 20 years in prison, and violating IEEPA carries a maximum penalty of 20 years in prison. Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.

“The defendants in this case are alleged to have conspired to defraud the United States by illegally acquiring and exporting fighter jet and attack helicopter components. Keeping such advanced weaponry, which is designed to protect the men and women of our Armed Forces and to defend our national interests, from falling into the hands of state sponsors of terror has never been more important,” said Todd Hinnen, Acting Assistant Attorney General for National Security.

“Through coordinated law enforcement efforts, we have cut off more than a branch of this illegal supply tree; we have cut off the tree at its trunk. These parts have a military purpose, and I am determined to see that they are not used to harm the United States, its soldiers, citizens or friends. This type of criminal activity should remind each of us that we must be ever vigilant in our efforts to protect our national security. The threat is very real, and comes from even the least suspected places, including middle Georgia,” said U.S. Attorney Michael Moore.

“The illegal export of U.S. weapons and military technology presents a direct threat to our national security,” said Brock Nicholson, Special Agent-in-Charge of ICE-HSI in Atlanta. “This investigation demonstrates the importance of preventing our military equipment from falling into the wrong hands, where it could potentially be used against our military members, our homeland and our allies. Enforcing U.S. export laws is one of our top priorities, and we will continue working with our law enforcement partners to ensure that those who put our country at risk are discovered and brought forward for prosecution.”

Brian D. Lamkin, Special Agent-in-Charge, FBI Atlanta, stated: “The cooperative efforts among the FBI, ICE and U.S. Commerce was critical in bringing this case forward for prosecution by the U.S. Department of Justice. The enforcement of U.S. laws that prohibit the acquisition of specified defense related items is paramount to national security and is a daunting task when back dropped against the vast movement of legitimate international trade that occurs every day in the U.S. The FBI is pleased with the role that it has played in this multi-agency enforcement effort.”

“The Commerce Department’s Office of Export Enforcement (OEE) dedicates one hundred percent of its resources to enforcing export laws, and today’s case is the result of ongoing cooperation with Immigration and Customs Enforcement and the FBI to protect our national security,” said Robert Luzzi, Special Agent-in-Charge of OEE’s Miami Field Office. “Parties who export to embargoed destinations such as Iran will be pursued and prosecuted to the fullest extent of the law.”

This case was investigated by ICE Homeland Security Investigations in Atlanta, FBI Atlanta Field Division and the Department of Commerce’s OEE.

The prosecution is being handled by Assistant U.S. Attorneys Jennifer Kolman and Danial E. Bennett from the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorneys Ryan P. Fayhee and Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.”

Attached is the Superseding Indictment – Case No. 5:10-CR-58-MTT.

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

November 1, 2010

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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