Archive for the ‘DOJ’ Category

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

Engineer Gets 29 Months in Prison for Illegal Exports

Friday, May 16th, 2008 by Danielle McClellan

Chi Mak, a former engineer for defense contractor Power Paragon, was sentenced to 293 months in federal prison and fined $50,000. Mak conspired with his wife, brother, sister-in-law and nephew to obtain naval technology and then export the material to the People’s Republic of China.

Co-conspirators from the PRC provided a task list for Chi Mak that requested specific defense information, including research regarding nuclear-powered submarines. The list contained instructions for Mak to take part in seminars and then compile information he obtained from the seminars onto computer disks. Nearly all of the information he obtained from the seminars was sensitive and subject to restrictions regarding its distribution, storage and handling.

Chi Mak and his wife would copy the information onto CD-ROM disks and then forward the disk to Mak’s brother, Tai Mak who would have his son take the data and encrypt it onto the CD-ROM disk. Tai Mak and his wife then took the disk and hid it in their luggage as they traveled to the PRC to deliver it, when they attempted to board the plane in Los Angeles they were arrested along with Chi Mak and his wife at their home and their son was apprehended and charged seven months later.

All conspirators have pleaded guilty and all face deportation back to the PRC.

More information:

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

Over-Charging the US Government: Bet You Wish You Had Exported Illegally!

Friday, May 16th, 2008 by Danielle McClellan

OK, so you violate the Export Administration Regulations, you might get a fine between $50,000 and $500,000 in most cases. And in the small percentage of ITAR violations in which there is a monetary penalty, you normally are looking at a fine between $1 million to $20 million. But, ladies and gentleman, if you over charge the US Government for shipping costs, you might end up with a big fat $28 million fine.

National Air Cargo (NAC), a US military contractor, has paid $28 million to settle both criminal and civil allegations. NAC is said to have defrauded the Department of Defense, and the Justice Department by submitting fraudulent claims for payments for the shipment of freight. The company pleaded guilty to one count of knowingly making a material misstatement to the US.

From 1999 to 2005 NAC transported freight wholly by surface transportation rather than by air as required by the Department of Defense regulations. The company would then bill the DOD for freight charges and pocket the difference between air and land delivery. The company falsified documents to represent actual delivery dates.

The lawsuit was actually brought on by Mark Oehm, a former NAC employee, the “whistleblower” brought on the lawsuit under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the US and receive a portion of the proceeds of any settlement or judgment. Oehm will be receiving $3.3 million as his share, he may not have his job anymore, but I am sure his share of the settlement will help him cope.

More information:

Posted in DOJ, EAR, ITAR, Violations & Fines | Comments Off

Lucent Agrees to $1 Million Fine for FCPA Violations

Friday, December 21st, 2007 by Danielle McClellan

Lucent Technologies Inc., a global communications solutions provider has entered into an agreement with the Department of Justice to resolve allegations that it violated the Foreign Corrupt Practices Act (FCPA). The company provided travel and other items of value to Chinese government officials and included it as expenses in company books and records. (more…)

Posted in China, DOJ, FCPA, USA Regulations | Comments Off

California Man Agrees to Plead Guilty Illegal Exports to India

Monday, July 30th, 2007 by John Black

According to the Justice Department, Samuel Shangteh Peng, who formerly was involved in export sales for Edevco Corporation, agreed to plead guilty to five illegal export criminal charges, each of which carries a maximum of 10 years in jail. Mr. Peng was charged with illegal exports in 1999 and 2000 of vibration amplifiers, cable assemblies and vibration processor units to Hindustan Aeronautics Limited’s Engine Division in India, which was on BIS’ Entity List during that time.

Ouch.

DOJ News Release

Posted in DOJ, India, Violations & Fines | Comments Off

Gonzales and Justice Department Raises Their Export Control Enforcement Profile

Saturday, June 30th, 2007 by Guest Author

The first-ever National Export Control Coordinator for the Department of Justice was appointed last June 20, 2007. Steven W. Pelak, a veteran prosecutor for 18 years, has been an Assistant U.S. Attorney and Senior Litigation Counsel in the National Security Section of the U.S. Attorney’s Office for the District of Columbia and, since September 2001, has served as the Anti- Terrorism Coordinator for the U.S. Attorney’s Office. Mr. Pelak is detailed to the Counter-espionage Section of the Justice Department’s National Security Division, wherein he will have some of the following responsibilities:

  • development of comprehensive training materials on export control investigations and prosecutions for federal prosecutors nationwide
  • solicit and receive regular progress reports from U.S. Attorneys’ offices on the development of export control cases
  • coordinate between the Justice Department and the many other U.S. law enforcement, licensing and intelligence agencies that play a role in export enforcement.

Attorney General Alberto Gonzales mentioned in his June 11 speech on nuclear terrorism that the Justice Department’s National Security Division where federal prosecutors were provided instruction and guidance on export control cases, with trainers from the Justice Department and the relevant investigative agents on hand providing comprehensive prosecutorial instruction.

(more…)

Posted in Aerospace, China, Defense Trade Controls, DOJ, India, Indonesia, Malaysia, Singapore, Sri Lanka, Terrorism, Thailand | Comments Off

Foreign Corrupt Practices Act (FCPA): Another Compliance Headache?

Thursday, June 30th, 2005 by Guest Author

Everyone has probably heard of the FCPA. As a result of SEC investigations in the mid-1970′s, over 400 U.S. companies admitted making questionable or illegal payments in excess of $300 million to foreign officials to secure some type of favorable action by a foreign government. Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system. Several firms that paid bribes to foreign officials have been the subject of criminal and civil enforcement actions, resulting in large fines and suspension and debarment from federal procurement contracting, and their employees and officers have gone to jail.

It is my experience that most U.S. companies’ compliance to the FCPA is no more than “lip service.” The CEO issues a policy that instructs all employees to comply with the FCPA and that bribes of foreign government officials will not be tolerated. Then he/she and other members of the company’s senior management wrap themselves in this cozy “policy security blanket” and they are confident the company is in compliance. After all, everyone knows you can’t bribe government officials. Yeah, right!

On February 22, Titan Corporation (Titan) plead guilty to criminal charges of violating the FCPA, falsifying books and records of Titan, and willfully aiding and assisting in the preparation or presentation of a false or fraudulent tax return for Titan.

Does the case against Titan signal a heightened FCPA enforcement effort on the part of the Justice Department?

(more…)

Posted in DOJ, FCPA, USA Regulations, Violations & Fines | Comments Off

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