Archive for the ‘DOJ’ Category

The Check’s in the Mail (Export Control Reform [Again])

Wednesday, June 9th, 2010 by John Black

Editorial Analysis by John Black

I am old.  I can’t even count the number of times I have heard well intentioned high level government officials tell us that they plan to make significant reforms in the US export control system.  Some government officials have told me that they are going to make the system so transparent and user friendly that they will put consultants like me out of business.

It’s been 26 years for me in this business and numerous government pledges to make things better.  As far as I can tell, I am still here and there is still a huge demand for assistance in dealing with the infinite number of problems that US export controls create for companies who try to comply with the rules.  Yes, this reform could be different.

So, I apologize (for a change) in advance for being the cynic as a good number of my peers spout enthusiastically about Defense Secretary Gates’ call for comprehensive reform to the US export control system.  Reform certainly makes sense.  Comprehensive reform could both promote national security and make compliance a bit easier for companies.

Comprehensive reform is highly unlikely.  Adjustments to certain aspects of US export controls might be the better-than-nothing result we should hope for.  And, changes to the current system that will create a lot of extra work for us without actually improving anything is what we should fear.   (Well, this last scenario will probably be a gold mine for my seminar and consulting businesses.) (more…)

Posted in BIS, CCL, Commerce Dept, DDTC, DOD, DOJ, Defense Trade Controls, Defense Trade Controls, EAR, Export License, State Dept, State Dept, USA Regulations | 3 Comments »

Businessman Pleads Guilty to Illegal Bribes

Thursday, October 22nd, 2009 by Danielle McClellan

Joseph T. Lukas, a partner in Nexus Technologies Inc., has pled guilty in connection with a conspiracy to bribe Vietnamese government officials. Nexus was a privately owned export company that found US vendors for Vietnamese government contracts that involved underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. Lukas was in charge of the negotiations of these contracts with US suppliers. The Vietnamese officials included the commercial branches of Vietnam’s Ministries of Transport, Industry and Public Safety. (more…)

Posted in DOJ, FCPA, Vietnam, Violations & Fines | Comments Off

Man Arrested for Smuggling Military Aircraft Engines to Iran

Wednesday, September 2nd, 2009 by Danielle McClellan

A suspected international arms dealer has been arrested on charges that he and an accomplice conspired to illegally export F-5 fighter jet engines and parts from the US to Iran. Jacques Monsieur, a Belgian national and resident of France has been a suspected arms dealer for decades and may have finally smuggled his last shipment. (more…)

Posted in BIS, DOJ, Iran, OFAC, Sanctions, UAE, Violations & Fines | Comments Off

Aircraft Parts Company Agrees to Spend $100,000 to Enhance Compliance Program

Thursday, July 30th, 2009 by Danielle McClellan

According to a consent agreement, Air Shunt exported a J85-GE-21B engine actuator and engine ignition exciter (used on F-5 Freedom Fighter) to the UAE and an Ametek military helicopter gyroscope to Thailand. Air Shunt’s former Vice-President, John Nakkashian has been indicted related to these violations and disappeared soon after the company came over investigation. He has been named a fugitive from justice and possibly could be hiding in Armenia according to a recent DOJ press release…wonder if he will be receiving free tickets to Disney Land soon. (more…)

Posted in DOJ, State Dept, UAE, Violations & Fines | Comments Off

“Gee, They Looked Like Model Airplane Components to Me!” Says Not-the-Smartest-Violator

Friday, February 13th, 2009 by Danielle McClellan

Yaming Nina Qi Hanson of Silver Spring, Maryland has been charged with exporting autopilot circuits to China without a license. Yaming’s husband, Harold Hanson has been named a co-conspirator but has not yet been charged. (more…)

Posted in Aerospace, China, DOJ, Terrorism, Violations & Fines | Comments Off

$32 Million Fine, But Not for Export Violations

Saturday, July 5th, 2008 by Danielle McClellan

Willbros Group Inc. and Willbros International Inc., a wholly owned subsidiary, have agreed to pay over $32 million in penalties, disgorgement and interested in criminal case with the Department of Justice and with the Securities and Exchange Commission. The companies are both publicly traded and provide construction, engineering and other services in the oil and gas industry. (more…)

Posted in DOJ, Export License, Violations & Fines | Comments Off

US Citizen Spies for Government of Israel – Maybe They Should Apply the Deemed Export Rule to US Citizens

Wednesday, May 21st, 2008 by Danielle McClellan

Ben-Ami Kadish has been arrested on several charges of spying conspiracy. From 1979 into 1985 he was employed at the US Army’s Armament Research, Development, and Engineering Center. Beginning in 1980 Kadish, a US citizen, would take classified documents home and provide them to an unnamed citizen of Israel who would photograph the documents.

The Israel citizen was employed by the Government of Israel as the Consul for Science Affairs at eh Israeli Consulate General in Manhattan. He would direct Kadish on what documents he needed and met Kadish at his home to photograph them.

Of the numerous documents photographed over the years the most alarming were documents classified as restricted containing nuclear weaponry, major weapon systems of an F-15 fighter jet, and major strategies of the US patriot missile air defense system, noted as being “Secret”.

On March 20, 2008 Kadish received a phone call from the unnamed co conspirator instructing him deny any contact with him to federal law enforcement officials. The next day Kadish followed the conspirator’s orders and denied any contact with the individual and even the phone conversation from the previous evening.

Kadish is charged with 4 counts of conspiracy, that which include disclosing documents of US national defense to the Government of Israel, acting as an agent of the Government of Israel, hindering a communication to a law enforcement officer, and making a materially false statement to a law enforcement officer.

More information:

Posted in DOJ, Violations & Fines | Comments Off

Ebara Violation Part Deux: $500,000 Fine and Probation Falls Short of Initial $6.4 Million Penalty

Wednesday, May 21st, 2008 by Danielle McClellan

French corporation, Cryostar France pleads guilty to conspiracy, illegal export, and attempted illegal export of Cryogenic Submersible Pumps to Iran. Cryostar has several businesses worldwide where they specialize in the design and manufacturing of cryogenic equipment. They were sentenced in the US to a criminal fine of $500,000 and corporate probation of two years.

Cyrostar was a middleman between Ebara International Corp., Inc. and “TN” a French company with a US subsidiary. Cryostar was to purchase the pumps from Ebara and then resell them to “TN” who would then forward the pumps to Iran. Cryostar falsely indicated that the final purchaser was the French company “TN” who would install the pumps in France, when all parties were in agreement that the pumps would go to Iran. The three companies created false purchase orders, and purchased as many component parts from non-US suppliers as possible to avoid any and all questions from US suppliers and to conceal their conduct. No export licenses were ever obtained for any of the items.

In 2004 penalties were imposed on Ebara and its former CEO Everett Hylton. At that time Ebara pled guilty to criminal violations and agreed to an administrative settlement, with combined fines of over $6.4 million dollars while Hylton agreed to personally pay $109,000. Ebara and Hylton’s schemed together to violate the embargo on Iran after some people in Ebara initially stopped an Ebara sale to Iran. Ebara falsified some documents and removed “made by Ebara” markings from certain items to evade US restrictions on Iran.

More information:

Posted in BIS, DOJ, Export License, France, Iran, Violations & Fines | Comments Off

Professor Pleads Guilty & Faces 5 Years and $250,000… Maybe They Should Apply the Deemed Export Rule to US Citizens

Wednesday, May 21st, 2008 by Danielle McClellan

Daniel Max Sherman a former physicist from Atmospheric Glow Technologies, Incorporated plead guilty to conspiracy with J. Reece Roth a professor at The University of Tennessee to transmit export controlled technical data to the People’s Republic of China. Between January 2004 and May 2006 the two worked with a Chinese graduate research assistant at the university where the professor and student researched military drone aircraft to develop plasma actuators.

In the court documents, prosecutors claim that Sherman and Roth both agreed amongst themselves to assign the Chinese student, Xin Dai, to the military development project. They never advised the Air Force or sought any special export licenses or consul.

At this time Sherman faces up to 5 years imprisonment and a $250,000 fine, the charges for the professor and student have yet to be released.

Patrick Rowan, Assistant Attorney General for National Security made a point, “Knowingly disclosing restricted US military data to foreign nationals represents a very real threat to our national security, particularly when we know that foreign governments are actively seeking this information for their military development.”

More information:

Posted in China, DOJ, Export License, Violations & Fines | Comments Off

Exporter Sues to Recoup Legal and Other Expenses

Friday, May 16th, 2008 by Danielle McClellan

Alex Latifi, owner of Axion Corp. has won yet another case against the US government. His criminal case was thrown out because of lack of evidence and poor witnesses, after the success, Latifi’s lawyers filed for reimbursement of legal fees, filing costs and money spent on expert witnesses during his trial. The Civil Asset Forfeiture Reform Act is designed “to give owners innocent of any wrongdoing the means to recover their property and make themselves whole after wrongful government seizures.” Latifi is expected to receive around $500,000.

Lawyers around the country are in agreement to say that this is going to change the way people look at arms-export cases. Cliff burns, an arms-export expert from Powell Goldstein explained, “This is the first time and it will create quite a stir, No one I know has ever recovered legal fees against the federal government in an arms-export case.”

More information:

Posted in DDTC, DOJ | Comments Off

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