A small Virginia company pled guilty to trying to sell guns, night vision goggles and other military equipment to people in Yemen, Libya and other countries. Ioannis “John” Papathanassiou, owner of Taipan Enterprises Ltd. entered into a guilty plea after admitting that his company was trying to broker arms without a license, and he was aware that the State Department requires broker registration.
For several years Papathanassiou tried to sell military equipment to foreign companies but was never actually successful. He tried to sell Glock pistols to a Yemeni contact and night vision goggles to Libya for their border patrol among many others but was never able to finalize any sales. US authorities became suspicious of Papathanassiou in 2007 when he returned from a trip in Brazil and told customs that he had met with Yemeni nationals to try to sell them farm equipment. Customs agents searched Papathanassiou’s luggage and found military vehicle brochures and handwritten notes referring to several weapons, but with no surprise, no evidence of any farm equipment brochures. This sale was also never finalized.
Taipan Enterprises Ltd. was ordered to pay a $15,000 fine for arms brokering without registering with DDTC, even though there were never actually any sales or exports. So, according to these charges, just chatting about potential deals requires DDTC brokering registration even though the definition of a broker under section 129.2(a) defines a broker as:
“any person who acts as an agent for others in negotiation or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission, or other consideration. ”
It is unlikely that Papathanassiou ever received any fees or commissions for items he never actually sold so I am assuming these charges are based on an agreement to pay him or other considerations. This is an important case for anyone who is even “trying” to negotiate a defense contract; apparently you should register as a broker before you actually even try to be a broker, or to be safe register if you are even thinking of being a broker.
Defense lawyer, John Hudley said “the small fine is evidence that the company’s misconduct was relatively minor.”
Yep, in many cases it would cost a company more than $15,000 to try to implement thorough procedures and training to try to comply with the brokering rules.
Information: http://www.justice.gov/usao/vae/Pressreleases/01-JanuaryPDFArchive/10/20100107taipannr.html
