Sep

20

Is the DOJ Tilting at Windmills?


Posted by at 9:09 pm on September 20, 2007
Category: OFACSEDs

Rob KraaipoelThis morning we laid our hands on the criminal complaint, unsealed earlier this week, charging a Dutch aviation parts firm and its owner Rob Kraaipoel with export violations. The underlying violations charged by the criminal complaint are fairly simple. The complaint alleges that Aviation Services International B.V. and it’s owner Rob Kraaipoel purchased various aviation items from U.S. companies and then sold them to customers in Iran without the necessary OFAC license. Additionally the complaint alleges that Aviation Services caused other to make fraudulent statements on Shippers’ Export Declarations (SEDs) as to the end users of items purchased by the company from vendors in the United States.

The story told by the criminal complaint starts with purchases in 2005 and 2006 of audio and video equipment by Aviation Services from New Hampshire-based DTC, Inc. When DTC requested that Aviation Services identify the end user for the equipment, Kraaipoel is alleged to have sent an email to DTC indicating that the Polish Border Control was the end user. This information was then used by DTC’s freight forwarder when it filled out the Shipper’s Export Declarations for these exports. According to the complaint, the Polish Border Control denies having purchased anything from Aviation Services. Subsequently when Aviation Services requested spare parts for these items, it sent an email to DTC that the end user was a company in Cyprus.

Based on these facts, the complaint charges Kraaipoel with two counts of false statements in violation of 18 U.S.C. 1001(a). These charges are asserted even though Kraaipoel made no representations to any U.S. government official and even though there is no allegation that Kraaipoel knew that his representations as to the end-user would even be provided to the U.S. government. Nor is there any allegation that these items were ultimately exported to Iran or other embargoed country. Indeed, it appears that they ended up in Cyprus instead.

Felony charges under 18 U.S.C. 1001(a) seem questionable under the facts alleged. A Dutch citizen sends an email to a private individual in the United States and then faces criminal charges in the United States because inaccurate information in that email is provided, without the Dutch citizen’s knowledge, to the U.S. government. Consider also that a reseller of aircraft parts has a legitimate commercial interest in not providing the end-user’s name to his vendor in order to prevent the vendor from cutting him out as the middleman in future transactions. Because of that Aviation Services misidentification of the end user isn’t necessarily suspicious. And since there is no evidence that the equipment wound up in an embargoed country, it’s even more difficult to assert that there was any criminal intent on the part of the Dutch company.

There’s much more to discuss about the complaint. Tomorrow we will look at the remaining counts of the complaint relating to items that were purchased from other vendors and that were allegedly transshipped by Aviation Services to Iran.

Permalink

Bookmark and Share


3 Comments:


A weak argument – anyone who has ever done business with the U.S. knows that the forwarders make statements to the government. Otherwise, why would the forwarder care who the end user was?

Comment by Misha on September 22nd, 2007 @ 3:30 am

Once again, OEE is carrying the water for OFAC enforcement, as it has in many of the recent Iran embargo cases (e.g., the Gas Tech case that I helped defend). It kind of makes you wonder whether ICE is so preoccupied with other things (illegal immigrants, drugs, internet porn) that it can’t be bothered to lead OFAC cases as Customs did back before the merger with the INS investigative service.

Comment by Mike Deal on September 22nd, 2007 @ 9:12 am

Misha, your argument might fly in the old USSR, but here we interpret criminal laws according to their plain meaning and we require the government to allege with specificity the laws that one is alleged to have violated. The government is not supposed to just throw vague charges and force the defendant to prove its innocent. If the defendant didn’t submit the information or instruct its agent to submit false information to the government, it hasn’t violated 18 USC 1001. You might be able to gin up other violations if you can prove that the false information was expressly intended to cause the direct recipient to give up something or do something that it would have not but for the false information, but its not a violation not 18 USC 1001.

Comment by Mike Deal on September 24th, 2007 @ 12:37 pm