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Archive for the ‘Criminal Penalties’ Category

Feb

20

A Fool for a Lawyer

Posted by Clif Burns at 12:30 pm on February 20, 2012

Clarence Darrow once said that a man who represents himself has a fool for a lawyer and an idiot for a client. And that seems to be aptly demonstrated by the antics of Londoner Guy Savage who is waging a pro se war against his extradition from the U.K. to the United States in connection with allegations that he smuggled gun parts out of the United States to his business in the United Kingdom without a license. These antics are richly detailed in a recent article in The Tennessean.

Employees of Savage’s U.S. operation pleaded guilty to charges that they violated the Arms Export Control Act in connection with the parts shipment scheme. Since then, Savage, who was arrested by British authorities, has been battling extradition, both in the U.K. and the U.S. A U.K. magistrate approved Savage’s extradition back in November. Meanwhile, Savage, who is appealing that order, has been hurling paper at his soon-to-be judge in the U.S. Although his argument that the U.S. lacks jurisdiction over him has some force, the same cannot be said for the $250 milliion invoice which he sent to the judge for payment and representing claimed losses to his business resulting from the prosecution. He also

claims that the United States, the Department of Justice and the U.S. District Court are â€œlegal fictions.â€ In one document, Savage denies â€œthat I am a person.â€

The “I am not a person” defense is a novel, albeit usually unsuccessful, defense premised on the defendant’s claim that he is actually a unicorn and that, since prosecutions of imaginary creatures are illegal, he must be acquitted.

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Feb

8

The Third Deadly Sin

Posted by Clif Burns at 11:45 pm on February 8, 2012

Space Circuitry A California man has been indicted in connection with his attempt to export radiation hardened, space qualified chips to the People’s Republic of China without an export license. The indictment, if true, tells an interesting tale.

According to the indictment, which was unsealed on Monday, the defendant Philip Chaohui He owned and operated a company called Sierra Electronic Instruments, of which he was the only employee. Estimated sales revenues for 2010 were $110,000. I was unable to locate any website for the company, and the company’s web footprint consisted of two sparse directory entries.

Even so, He and Sierra got their hands on $549,654 worth of radiation hardened, space qualified memory chips from Aeroflex, a Colorado Springs chip designer and manufacturer. Seven months later, He drove his car to the Port of Long Beach and to a PRC-flagged ship there which had recently arrived from Shanghai and was scheduled to return in a week. The chips in question were in the defendant’s trunk concealed “in several plastic infant formula containers placed inside five boxes which were sealed and labeled as â€œmilk powderâ€ written in Chinese.

The indictment doesn’t describe what happened next, but it’s pretty clear. The federal agent that had been tailing Mr. He informed his buddies who swooped down on Mr. He, waving guns and shouting typical law enforcement stuff at him before dragging him away in handcuffs. The indictment suggests that before the dockside bust, the feds had snooped into his bank account and phone records and identified numerous phone calls to the PRC and, more ominously, two wires from the PRC to Mr. He totaling just under $500,000. As a result, Mr. He’s careful concealment of the goods in baby formula was a waste of time.

It doesn’t take a rocket scientist to guess what happened here. Obviously, Aeroflex smelled a rat when this one-man storefront operation wanted to lay his hands on a half-million dollars worth of highly specialized space-qualified circuitry, so they alerted the authorities. All the while Mr. He was agonizing over whether it was safest to hide the goods in baby formula, cans of dog food or boxes of knitting needles, he was already a marked man. Had he gone in for a smaller amount (for which he certainly would have been paid less) he might be basking in the Southern California sun. Indeed, he reminds me of the would-be bicycle thief who tried to walk out of my condo building’s parking garage with two bicycles rather than racing off swiftly on one bicycle.

He went down too.

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Jan

31

With Friends Like That . . .

Posted by Clif Burns at 11:18 am on January 31, 2012

Category: Criminal Penalties • Iran Sanctions

ABOVE: Sharif Univ. of Technology

Seyed Mojtaba Atarodi, a professor at Tehran’s prestigious Sharif University of Technology was arrested on December 7, 2011, when he stepped off a plane in Los Angeles where he had arrived for a medical visit to his brother’s cardiologist. The criminal complaint against him is sealed and the arrest was only made known because his name shows up in the Federal Bureau of Prisons inmate locator.

A bail hearing was held last week and Atarodi has been released on bail, partly due to his health problems. He has recently had two heart attacks, two heart surgeries and a stroke. Articles published by Atarodi that can be found on the web appear to deal mainly with semiconductor and microchip technology without any specific defense applications.

The U.S. government has still not released any information on the charges against Atarodi, although it is widely, and legitimately, assumed that they are export related. A spokesman for Sharif University said that Professor Atarodi was charged with buying scientific equipment from the United States, stating:

He was trying to buy some equipment for his lab, and the equipment was very, very simple, ridiculously simple stuff that anybody can buy. …

An official statement released by Sharif University, which appears to be aware somehow of the items mentioned in the indictment, said this about the items in question:

The items mentioned in the indictment, if truly purchased by him are all simple, basic, and elementary components and equipment that are easily sourced and can be found in every electrical engineering department. It is so disappointing to note that most of the items in question are not even the so called â€œdual useâ€ equipment.

Of course, the Iran sanctions cover all items of any sort exported from the U.S., although an arrest and criminal prosecution is rare for items without some further strategic significance.

Even though the U.S. government’s lips are sealed, Atarodi’s defense counsel is not quite so taciturn and said to the Associated Press reporter that his client was more or less guilty:

Kohn said prosecutors “meticulously” built their case against Atarodi, who had come to Los Angeles seeking treatment from his brother’s cardiologist.

Meticulously? A statement like that, if he has been accurately quoted, makes you wonder which side of the case the defense attorney is being paid to argue. I suppose that if the government case is so “meticulous,” the alleged defense attorney can just teach Mr. Atarodi how to say “guilty” in English, collect his CJA reimbursement, and wait for another appointment.

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Jan

23

Massachusetts Man Pleads Guilty to Illegal Export Charges

Posted by Clif Burns at 8:00 pm on January 23, 2012

Category: Criminal Penalties • DDTC

Rudolf Cheung, who is the head of the Research & Development department of Microwave Engineering Corporation in North Andover, Massachusetts, pleaded guilty on January 20, 2012, to charges that he violated the Arms Export Control Act in connection with unlicensed exports of military antennae to Singapore. A copy of the criminal information detailing the charges can be found here.

The story begins in June 2006 when an unnamed company in Singapore sought to order certain military antennae from Microwave Engineering. In preparation for requesting an export license, Microwave Engineering asked the Singapore company to execute a Form DSP-83 (Nontransfer and Use Certificate). When the company, citing its own internal policies, refused to sign the DSP-83, the sale and export were cancelled by Microwave Engineering’s export compliance officer.

When Cheung learned of the cancellation of the sale, he contacted another Massachusetts company, and agreed with that local company that it would purchase the military antennae and ship them to the company in Singapore. Thereafter, the local company purchased antennae from Microwave Engineering and exported them without license to the company in Singapore. The local company also purchased antennae from Microwave Engineering for export to another company in Singapore, Corezing International. Corezing is subject to another indictment, and the U.S. is seeking extradition, in connection with its role in the exports of radio modules from the United States to Iran which were later found in improvised explosive devices in Iraq.

The criminal information alleges that Cheung was aware that the purchases by the unnamed local company were destined for the customer in Singapore and that he took no action to stop these exports or to obtain the required licenses from the Directorate of Defense Trade Controls (“DDTC”).

Moral of the story: if your export compliance officers stops a sale, it is probably not a good idea to try to find another way to make the sale.

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Jan

10

Twenty IED Jammers in a Jam

Posted by Clif Burns at 9:02 pm on January 10, 2012

Category: Criminal Penalties • DDTC

Miljam 350 Law students always chuckle at forfeiture cases because they have the best names, such as United States v. 3,462 Cans of Tuna Fish or the like. It always seemed so unfair to those cans of tuna to have the entire juridical apparatus and force of the United States arrayed against them. Poor cans!

So I’m hoping that readers will be equally amused by an export law forfeiture case that is titled United States v. Twenty Miljam 350 IED Jammers and that was recently decided by the Second Circuit Court of Appeals. The twenty jammers at issue were manufactured by an Israeli company called Wireless Avionics. They were seized by Immigration and Customs Enforcement during a criminal proceeding against the CEO of the company for attempting to export these items without a license from the Directorate of Defense Trade Controls. They had been manufactured for sale to NATO, but DDTC had denied an export license claiming that the devices would interfere with radios used by U.S. forces in Afghanistan. The CEO then tried to disassemble them and export them from the U.S. for reassembly and sale elsewhere, which led to the seizure of the jammers, his arrest and a criminal indictment.

Now comes the odd part. For reasons not clearly explained by the Second Circuit opinion, the U.S. dropped all criminal charges provided that the CEO agreed to waive any future claims against the U.S. and the ICE agents for false arrest and to waive any objection to the forfeiture of the devices. The CEO, however, contested the forfeiture claiming that he was forced to sign the release under duress, the duress apparently being the threat of criminal prosecution. He also argued that the items were not on the United States Munitions List and did not require an export license. The Second Circuit dismissed the duress claim in large part based on a letter that the CEO sent after signing the waiver in which he said he had signed it voluntarily. And although the court notes that items on the USML require a license, it does not discuss whether these items were on the USML or not.

The Wireless Avionics website asserts that these devices are covered by “ECCN class 5.A.1.h,” presumably a reference to ECCN 5A001.h. That ECCN has a somewhat cryptic note that says “See also . . . Category XI of the International Traffic in Arms Regulations.” It would seem that whether an IED jammer fits under ECCN 5A001.h or Category XI of the ITAR would depend on whether it was specifically designed, modified or configured for military application.

Here the fact that the products were destined for NATO and were called — of all things — by the model name “Miljam” both suggest the items might well be Category XI. But then it’s hard to understand why the government folded like cheap lawn chairs and tried to get a promise that no one would get sued for false arrest. It also doesn’t help the Wireless Avionics case here that it applied for a license from DDTC which was denied. On the other hand, there is nothing to indicate that these jammers had been ruggedized, shielded or otherwise specifically adapted for military vehicles.

Because all we can do is speculate about the Government’s action here, speculation is welcomed in the comments section.

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