Archive for the ‘Criminal Penalties’ Category


Feb

10

Because, Er, 9/11, That’s Why!


Posted by at 6:43 pm on February 10, 2015
Category: Criminal PenaltiesIran Sanctions

Fokker HQ via http://www.fokker.com/Contact_us [Fair Use]Did you know that Iran attacked us on September 11? No, neither did I, but Judge Richard Leon apparently thinks so, because 9-11 appears to be the central reason he rejected the Deferred Prosecution Agreement in the case against Fokker Services BV for exporting U.S. origin aircraft parts to Iran. Seriously.

Back in July of this year, I speculated that the DPA was headed for difficulty because there was, apparently, an argument that the Government learned about Fokker’s exports to Iran from Robert Kraaipoel, a Dutch businessman who was indicted for selling U.S. origin items to Iran. Judge Leon has apparently convinced himself now that the voluntary disclosure was indeed voluntary and not prompted by Kraaipoel’s cooperation with the Government. At least that’s how I read footnote 4 to the Order.

Instead, Leon now rejects the DPA as too lenient because of 9/11 and Iran’s heretofore unknown role in that terror attack:

Here, Fokker Services is charged with a five-year conspiracy to violate and evade United States export laws for the benefit, largely, of Iran and its military during the post-9/11 world when we were engaged in a two—front War against terror in the Middle East.

Just in case you think Judge Leon was joshing when he linked Iran and 9/11, he makes the point a second time:

[A]fter looking at the DPA in its totality, I cannot help but conclude that the DPA presented here is grossly disproportionate to the gravity of Fokker Services’ conduct in a post-9/11 world. In my judgment, it would undermine the public’s confidence in the administration of justice and promote disrespect for the law for it to see a defendant prosecuted so ancmically for engaging in such egregious conduct for such a sustained period of time and for the benefit of one of our country’s worst enemies.

So, in the end, Fokker’s voluntary disclosure, its cooperation with the government, its remedial actions mean nothing because, you know, Iran was somehow or other involved in September 11.

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Feb

3

When Pigs Fly


Posted by at 9:54 pm on February 3, 2015
Category: CanadaCriminal PenaltiesForeign Export Controls

When Pigs Fly by arvind grover [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr http://www.flickr.com/photos/arvindgrover/3194476705 [cropped]According CTV’s investigative reporting arm W5, the Canadian Federal Government has agreed to pay a Canadian businessman, Steve de Jaray, more than $10 million to compensate him for damages caused to him by the government’s erroneous prosecution in which it charged de Jaray with illegal exports of items that were not in fact export controlled.

The case began in 2008 when de Jaray’s company, Apex Micro Electronics, shipped microchips used in flat screen televisions and video games to Hong Kong. Canadian customs flagged the items as suspicious. In February 2009, Canadian Mounties (probably not on horseback) and other officials raided de Jaray’s home and office causing, de Jaray alleged, him to lose his business and ultimately his house. Experts hired by de Jaray determined that the items were not export-controlled and Canada stayed, then ultimately dropped, the prosecution.

Interestingly, and not entirely surprisingly, it appears that there are some U.S. fingerprints on the prosecution. Lawyers for de Jaray allege, citing a cable released by WikiLeaks, that just months before de Jaray’s goods were seized, U.S. officials, including a high official from the State Department’s Bureau of Politico-Military Affairs, chided the Canadians for their poor export enforcement records and insisted that certain trade concessions might be withheld if the Canadians did not start following the U.S. example and throw more people in jail for export violations.

According to CTV, de Jaray has been living in self-imposed exile from Canada for the past 6 years. My guess is that he’s probably not in the United States. I also guess that the United States would pay similar damages in an export case when, as they say, pigs fly.

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Dec

9

New Indictment Issued in Halal Export Case


Posted by at 11:34 pm on December 9, 2014
Category: Agricultural ExportsCriminal Penalties

Midamar Halal Pizza via http://www.midamarhalal.com/Product/Pizza/Halal-Pizza/166/Halal-Beef-Pepperoni-Pizza-12in-bake-Rise.aspx [Fair Use]The Feds have stepped up their game in the Midamar prosecution, initially discussed here, by indicting more defendants and providing more detail in the new indictment as to the nature of the alleged activities. The initial indictment charged William Aossey Jr. with falsely stating on export certificates that meat had been slaughtered in a Halal-certified slaughterhouse.

The new indictment adds Mr. Aossey’s sons and Midamar itself. Based on comments we received from Midamar to our original post, it appeared that a central part of Midamar’s argument was that even if the meat was not slaughtered in Halal-certified slaughterhouses, the meat was still Halal meat as represented by the company.

The facts set forth in the new indictment seem to be directly aimed at this argument, going into the specific ways in which the slaughtered meat did not comport with the Halal standards that Midamar detailed on its own website. The non-Halal practices detailed in the indictment included: (a) the use of penetrative stun guns to kill animals, (b) the slaughter of cattle by slaughtermen that were not Muslim, and (c) the slaughter of cattle without the recitation of the requisite prayers. These non-Halal practices rendered false, according to the Government’s theory, the statements on export certificates that the meat complied with the requirements of the importing countries, all of which required that such meat be Halal.

In addition to my discomfort with the prosecutor’s delving so deeply into the religious matter of what is and isn’t Halal slaughter, it seems that there is little evidence that the defendants knew that the slaughterhouses were not always complying with the letter of Muslim religious practice. The only evidence in this regard mentioned in the indictment is the relabeling of meat by Midamar employees to indicate that the meat in question came from a slaughterhouse other than the one from which the meat actually came. Above and beyond that, you have to wonder why the U.S. government is expending such considerable resources to prosecute a case which ultimately deals with whether cows were slaughtered by Muslims while reciting specified ritual prayers.

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Oct

28

U.S. Indicts Exporter for Failing to Meet Halal Meat Standards


Posted by at 7:59 pm on October 28, 2014
Category: Agricultural ExportsCriminal Penalties

Midamar Halal Pizza via http://www.midamarhalal.com/Product/Pizza/Halal-Pizza/166/Halal-Beef-Pepperoni-Pizza-12in-bake-Rise.aspx [Fair Use]Who knew that the Islamic Religious Police had an office at Main Justice? You might justifiably wonder that reading this indictment in which an Iowa man, William B. Aossey Jr., is accused of violating federal law by exporting meat from a slaughterhouse not certified as halal to Indonesia and Malaysia, both Muslim countries where the importation of non-Halal meat is forbidden by law. Aossey is the owner of Midamar Corporation, a leading producer and exporter of Halal meat and food products.

Actually, the prosecutors get to this odd result by a familiar route, namely accusing the defendant of making false statements to the federal government in connection with the export. We saw this in the warm chicken case which we reported on back in 2012. In order to encourage U.S. exports, the U.S. Department of Agriculture agrees to certify to foreign governments that agricultural products exported from the United States comply with the importing country’s requirements. As part of that process, the exporter fills out a USDA Food Safety Inspection Service Form 9060-6, which is an application for the required export certificate. In that application, just above the signature line, is the following sentence:

Under penalty of law, I certify that the product covered by this application for export meets the inspection requirements for the country of destination.

If the importing country requires that the animal be slaughtered by a Muslim in a particular manner while invoking the name of the deity and that has not happened, then the statement on the Form 9060-6 is false and a violation of 21 U.S.C. § 611(b)(5), which prohibits false statements in applications for export certificates. Violation of that provision is made criminal by 21 U.S.C. § 676.  The indictment alleges that the defendant’s company represented in the export certificate that the meat came from a Halal-certified slaughterhouse when in fact it came from another, non-Halal slaughterhouse.

It is not quite clear why the charge was under 21 U.S.C.  § 611(b)(5), which provides for a maximum jail term of three years, rather than under 18 U.S.C. § 1001, which penalizes false statements to federal agencies and provides for a maximum jail term of five years. Perhaps it was because the defendant was recently appointed by the U.S. Secretary of Commerce to the position of Vice Chair of the Iowa District Export Council, a fact oddly omitted from the indictment. I suppose that’s worth cutting the guy just a little slack.

UPDATE: We received the following communication from Midamar:

In your article “U.S. Indicts Exporter for Failing to Meet Halal Meat Standards” in your Export Law Blog you state “You might justifiably wonder that reading this indictment in which an Iowa man, William B. Aossey Jr., is accused of violating federal law by exporting non-Halal meat to Indonesia and Malaysia…” Midamar is a company that has built its brand on halal integrity and would never falsely label any product as Halal if it was not Halal. Bill Aossey is not accused of exporting non halal meat to SE Asian countries in violation of federal law. Please see Midamar Statement http://www.midamar.com/News/20141025/49/Midamar-Statement-on-Indictment-of-Founder-Bill-Aossey.aspx and also see: http://youtu.be/sAT7LJKEYsU for some history on Bill Aossey and Midamar.

The indictment alleges that Aossey certified that meat came from a slaughterhouse that was Halal-certified when in fact, it is alleged, it came from another slaughterhouse that was not Halal-certified. The point being made by Midamar’s statement above appears to be that the meat was still Halal even if it came from a slaughterhouse that was not Halal-certified. We have slightly amended the sentence in question to read that Mr. Aossey is accused of “of violating federal law by exporting meat from a slaughterhouse not certified as halal to Indonesia and Malaysia.”

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Oct

20

Did Ron Jeremy Save This Export Defendant From Jail?


Posted by at 6:31 pm on October 20, 2014
Category: BISCriminal PenaltiesIran Sanctions

Touraj Ghavidel and Ron Jeremy via Ghavidel's Twitter Feed https://twitter.com/MrTouraj [Fair Use]
ABOVE: Touraj Ghavidel and Ron
Jeremy


The Bureau of Industry and Security just released settlement documents resolving allegations that Borna Faizy, Touraj Ghavidel and Signal Microsystems, Inc., illegally exported computer equipment from the United States to Iran. According to the BIS charges, Faizy, Ghavidel and Signal Microsystems transshipped the items through Dubai (where else?), used coded language in emails with Iranian customers to hide their customer’s identities and locations, and falsely stated on their Electronic Export Information filings that the ultimate end users were in Dubai. As a result, over at least 2 years, more than $1 million in computer equipment was shipped by the three to Iran. Under the settlement agreement, no fine is being imposed; rather the three exporters have agreed to a ten-year denial order.

The settlement agreement comes on the heels of a plea agreement entered by Faizy and Ghavidel where they plead to making false statements to federal agents in violation of 18 U.S.C. § 1001. Under the plea, the government and the defendants agree that a fine and one year probation would be an adequate sentence. The basis for the charge under 18 U.S.C. § 1001 is that Faizy and Ghavidel, when questioned by federal investigators, swore up and down that they were absolutely not doing any business with Iran and would never ever even think of doing so, cross their hearts and hope to, etc., etc.

It is hard to tell why such a favorable plea deal was reached here. The false EEIs and the coded emails certainly suggest that the defendants knew that they were breaking the law. And they also managed to ship a boat load, almost literally, of computers to Iran. All I can figure is that the prosecutors saw the picture of Ghavidel with Ron Jeremy, which Ghavidel put on his own Twitter feed, and decided that Ghavidel was too cool to go to jail.

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