Archive for the ‘Criminal Penalties’ Category



A Scary Halloween Post on Another Obscure List for Exporters to Check

Posted by at 3:41 pm on October 30, 2015
Category: Criminal PenaltiesOffice of Diversion Control

Taminco HQ via Google Maps [Fair Use]
ABOVE: Taminco HQ


I still have some invitations for free food and drink at the Bryan Cave reception at 6:00 pm on November 3 for people in town attending the BIS Update Conference (or anyone else for that matter). Email me at if you want one. It won’t be as much fun as that cruise that somebody else is doing for people attending the BIS Update 2015, but at least you can leave our event when you want to.


As if there weren’t enough lists to check and agencies to fuss with and other requirements before exporting stuff, did you know about this list? Otherwise known as the Schedule of List I Chemicals, all the chemicals on that list are chemical precursors for the manufacture of methamphetamine. (Yes, apparently iodine and red phosphorus are used for that. Who other than Walter White a/k/a Heisenberg had any idea?)

If you are going to export anything on that list, the rules of the DOJ Office of Diversion Control require that you verify the identity and end user of the chemical pursuant to the procedures set forth in 21 C.F.R. § 1310.07. If part of a shipment goes missing, or if the exporter learns that an end-user might be cooking meth, section 1310.05 requires the exporter to report this “at the earliest practicable opportunity.”

Taminco, a Pennsylvania-based producer of chemical amines used as components in manufacturing everything from agrochemicals to fuel additives and animal feed did not verify the identity of its customers or report missing shipments in connection with exports of 100 tons of monomethylamine to Mexico. As a result, according to this report (subscription required), it has now been forced by DOJ to agree to pay $1.3 million in criminal and civil penalties. According to the DOJ Sentencing Memorandum the chemicals were worth only $210,234.07

The only consolation here is that nobody went to jail. I think that used to be called cold comfort.  Once again, the moral of the story is this: export stuff at your own peril, something that has been known since the early days of the Roman Empire and nicely expressed in that well-known maxim: Caveat Exportor.

Permalink Comments Off on A Scary Halloween Post on Another Obscure List for Exporters to Check

Bookmark and Share



US Drops Charges Against Prof Accused of Emailing While Chinese-American

Posted by at 6:42 pm on September 13, 2015
Category: Criminal Penalties

Prof. Xiaoxing Xi via [Fair Use]
ABOVE: Dr. Xiaoxing Xi

In May of this year, federal agents raided the home of a Chinese-American physics professor, Dr. Xiaoxing Xi,  and dragged him from his home in handcuffs before his young daughters on charges that he emailed to a colleague in China design schematics for a pocket heater, a device used in superconductor research, despite a written agreement not to share such information. Temple University, where Dr. Xi taught, unceremoniously stripped him of his title of Chairman of the Physics Department, put him on administrative leave and restricted his communications with others at the university.

The DOJ shortly afterwards sent out an overheated press release, noting, for some reason, that Professor Xi, who is a naturalized U.S. citizen, was a “native of the People’s Republic of China,” apparently based on the heretofore unknown jurisprudential principal in criminal trials that defendants are innocent until proven Chinese.

Last Friday the government dropped all charges against Professor Xi, alluding obliquely in the court papers that, after the indictment, unspecified “additional information came to the attention of the government.” According to this New York Times article, the unspecified information was that the design schematics were not for the device that the government thought they were. More bluntly, the government was too stupid to understand what the designs were for, got the designs for another device confused with the one Professor Xi had agreed not to share, and then tried to wreck his life. Oh, and did the DOJ promptly issue a press release admitting its mistake? Of course not. Are you crazy? They apparently did not even tell Professor Xi they were sorry.

Dr. Xi said this to the New York Times:

I don’t expect them to understand everything I do. … But the fact that they don’t consult with experts and then charge me? Put my family through all this? Damage my reputation? They shouldn’t do this. This is not a joke. This is not a game.

Dr. Xi’s lawyer, according to the Times, went further and suggested that the prosecution targeted Dr. Xi because he was Chinese.

If he was Canadian-American or French-American, or he was from the U.K., would this have ever even got on the government’s radar? I don’t think so

Of course not. The DOJ press release which notes that Xi was born in China makes that clear. Apparently the folks at DOJ don’t think that they are bound either by actual science or by federal laws prohibiting discrimination based on national origin.


Permalink Comments Off on US Drops Charges Against Prof Accused of Emailing While Chinese-American

Bookmark and Share



Russian Export Case Larded with Bogus Spying Charges: Part 2

Posted by at 9:10 pm on September 10, 2015
Category: Criminal Penalties

Alexander Fishenko
ABOVE: Alexander Fishenko

Almost two years ago, this blog reported on the charges against Alexander Fishenko who, among other things, was accused of shipping various USML and CCL items to the Russian government without a license. Yesterday, according to this DOJ press release, Fishenko pleaded guilty to all the charges against him.

These charges included charges that Fishenko failed to register under the Foreign Agents Registration Act, a charge calculated to elicit a frenzy of headlines about the charges against a “Russian Spy.” And the press predictably took the bait then and took the bait again in reporting the plea agreement. The nominally respectable Bloomberg News headlined the plea deal as “Military Technology Exporter Admits to Spying for Moscow.” Even the previously mentioned DOJ press release only called Fishenko a “Russian Agent.”

The statute involved is the Foreign Agents Registration Act, which requires that any person in the United States acting on behalf of any foreign person, not just foreign governments or spymasters, must register with the Department of Justice. Section 1(c)(1) of the Act, 22 U.S.C. § 611(c)(1), defines the precise activities that trigger the registration requirement, including political activities for a foreign person or government, acting as a publicity agent for a foreign government or person, dispenses money on behalf of the foreign government or person, or representation of the foreign government or person before a government agency.

Under this definition, Fishenko might, I suppose, be said to have dispensed money on behalf of his Russian buyers in buying the items that were exported to them. The problem with this theory of liability under the act is section 3(d) of the Act which exempts from the registration requirements “private and nonpolitical activities in furtherance of the bona fide trade or commerce of such foreign principal.” Because the act covers acting on behalf of foreign governments and private foreign entities, every exporter would be a “foreign agent” or “spy” without this exemption.

As this blog noted in the original post, the only activity that Fishenko was accused of in engaging in for the Russian government was buying stuff. The fact that it was exported without a license does not prevent it from being bona fide trade. The bona fide requirement is designed to prevent foreign persons or governments from spreading influence simply by buying things that they don’t actually need. And again, because the act covers not just foreign governments but all foreign entities, if lacking a license for the export prevented the purchase for the foreign person from being bona fide trade, then all persons guilty of illegal exports are also necessarily “spies” unless they register under FARA.

Of course, since Fishenko pleaded guilty, we will never know how a court would come out on these arguments. If, as I suspect, the FARA charges were simply designed to poison the well with spy charges, the government might not have even bothered to press those charges had it ultimately been forced to go to trial.

Permalink Comments (2)

Bookmark and Share



Don’t Believe Everything You Read in the Newspaper

Posted by at 11:32 am on July 27, 2015
Category: BISCriminal PenaltiesIran Sanctions

Republian Herald HQ via Google Maps [Fair Use]

From the Republican Herald (Pottsvile, PA) story on a guilty plea by Falcon Instrumentation and Machinery FZE in connection with an attempted shipment by Pennsylvania-based Hetran, Inc. of a bar peeling machine to Iran:

Federal prosecutors allege the machine, valued at more than $800,000 and weighing more than 50,000 pounds, has both military and civilian uses, which meant Hetran could not ship it to Iran without obtaining a license from the U.S. government. The machine is used in the production of high-grade steel, which is used in making automobiles and aircraft parts, according to prosecutors.

As astute readers of this blog will no doubt already know, U.S. companies like Hetran can’t ship anything at all (including EAR99 items) to Iran without a license or an applicable exception. But before we jump down the throat of a poor reporter in Pottsville, let’s think about what likely happened. In doing that, realize first that local reporters like DOJ press releases more than cats love catnip. Just rewrite it a little and push send and the day’s work is done.

And, indeed, as suspected there is a DoJ press release and it says this:

Under U.S. law and regulations, American companies are forbidden to ship “dual use” items (items with civilian as well as military or proliferation applications), such as the peeler, to Iran without first obtaining a license from the U.S. Government.

Sigh. I realize the export law and economic sanctions are a somewhat complicated area of law, but it does not seem unreasonable to suggest that the government employees who are charged with sending people to jail for export violations at least make an effort to understand the laws that they enforce.

[Note: I’m on vacation this week, so this is the last post for this week; normal posting resumes next week.]

Permalink Comments Off on Don’t Believe Everything You Read in the Newspaper

Bookmark and Share



That’s His Story and He’s Sticking to It

Posted by at 5:47 pm on July 11, 2015
Category: Agricultural ExportsCriminal Penalties

Midamar Halal Pizza via [Fair Use]Back in 2014, this blog reported here and here on the indictment of Midamar Corporation for exporting non-halal meat to Malaysia and Indonesia, both countries which forbid the importation of non-halal meat products. I expressed some concern that the theory of the case turned the Department of Justice into the Islamic Religious Police given the extent to which the indictment depended on allegations that the slaughterhouse used by Midamar failed to comply with halal requirements by, e.g., using non-Muslims to slaughter animals.

The case went to the jury last Friday and it appears from local press reports (here and here) that the theory of the indictment has been narrowed. The case seems to have shifted away from the claim that the exported meat was not halal but rather that Midamar obtained meat from a slaughterhouse that had not been approved by Malaysia or Indonesia and put the number of a slaughterhouse approved by the two countries on the the USDA Food Safety Inspection Service Form 9060-6 required to accompany the export. (A spokesman for Midamar told this blog that the warehouse used by Midamar was, in fact, complying with halal requirements.)

The defense’s response to this theory is that the mislabeling was not a criminal act. The defendant, William Aossey

testified Thursday that changing the labels and documents, which are required under law for halal beef products, isn’t a criminal offense.

“It’s a minor labeling infraction, nothing criminal about it,” Aossey said told jurors.

He admitted to changing the establishment number belonging to PM Beef in Windom, Minn., to another number belonging to J.F. O’Neill Packing Co. in Omaha, Neb., because PM wasn’t approved to export beef to Malaysia and Indonesia during the years 2007 to 2010.

At first, this seems to be pretty much game over for the defense, given the defendant’s apparent admission in open court that he faked the establishment numbers on the USDA Export Certificate. Of course, Aossey admitted changing the numbers because the evidence on that count appears to have been overwhelming. The strategy of the defense, as set forth in its motion to dismiss the indictment, is that the USDA has exclusive authority over meat misbranding and false statements on USDA export certificates. Moreover, the defense argued this exclusive jurisdiction extends to prevent prosecution for such acts under 18 U.S.C. § 1001 ,a/k/a the “Martha Stewart” law, which criminalizes false statements made to federal officers and agencies.

The trial judge was having none of this and denied Aossey’s motion to dismiss. So, the defense ploy here is to hope for jury nullification and, if that doesn’t work, set up grounds for an appeal.

Permalink Comments (3)

Bookmark and Share