Gonzales and Justice Department Raises Their Export Control Enforcement Profile

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.

In the past months, the Justice Department brought charges or prosecuted cases involving illegal exports of Naval warship technology to China, technology to Indian missile facilities, arms to terrorists in Sri Lanka, military night vision data to China, as well as military helicopter data to foreign nations.

According to Justice, some recent export control prosecutions are:

U.S. Naval Warship Data to China

On May 10, 2007, following a six-week jury trial, Chi Mak, a former engineer with U.S. Navy contractor Power Paragon, was found guilty on all counts of a superseding indictment charging him and four others with a variety of offenses stemming from the illegal export of military technical data on the U.S. Navy warships to China. Court documents in the case alleged that co-conspirators from China provided Mak with lists that requested specific information, including U.S. Naval research related to nuclear-powered submarines, for delivery to China. The investigation was conducted by the FBI and the Naval Criminal Investigative Service. The case is being prosecuted by the U.S. Attorney for the Middle District of California.

Missiles, Arms to LTTE Terrorists, Indonesian Military

On May 10, 2007, Thirunavukarasu Varatharasa pleaded guilty to conspiracy to provide material support to a designated foreign terrorist organization and attempted export of arms and munitions. Varatharasa conspired with Haji Subandi, Haniffa Osman and Erik Wotulo to provide surface-to-air missiles, machine guns, night vision devices, and other weapons to the Liberation Tigers of Tamil Eelam (LTTE) in Sri Lanka. All four have pleaded guilty in connection with the scheme. Two additional defendants, Reinhard Rusli and Helmi Soedirdja, have also pleaded guilty to arms export violations as part of a plot to provide arms to the Indonesian military. The investigation was conducted by ICE, DCIS, and the FBI. The case is being prosecuted by the U.S. Attorney for the District of Maryland.

Ivory Coast

Yssouf Diabate was sentenced to 48 months in prison for attempting to illegally export handguns, semi-automatic firearm components and laser sights to the Ivory Coast. The investigation was conducted by ICE and DCIS. The case is being prosecuted by the U.S. Attorney for the Southern District of California.

Technology to Ballistic Missile Facilities in India

On April 3, 2007, Parasarathy Sudarshan was arraigned in federal court in Washington, D.C. on charges of illegally exporting restricted U.S. technology to Indian state entities involved in ballistic missile development; acting as an illegal agent of India and exporting military technology to India for the development of a new fighter jet. He was one of four defendants indicted in the case. He and another defendant, Mythili Gopal, were arrested in South Carolina on March 23. The investigation was conducted by the FBI, the Commerce Department and ICE. The case is being prosecuted by the U.S. Attorney for the District of Columbia.

Black Hawk Helicopter Technical Data Overseas

On March 28, 2007, Axion Corporation, an Alabama defense contractor, and its owner, Alexander Latifi, were charged with illegally exporting Black Hawk military helicopter technical data overseas, fraud involving aircraft parts and submitting false documents. The investigation was conducted by the National Aeronautics and Space Administration (NASA) Office of Inspector General, DCIS, ICE, FBI, and the IRS, and is being prosecuted by the U.S. Attorney for the Northern District of Alabama.

Ballistic Helmets to Surinam

On March 28, 2007, Virginia-based company, Alpine Armoring, Inc., pleaded guilty to the illegal export of ballistic helmets to Surinam. The company and its president, Fred Khoroushi, also pleaded guilty to making false statements on a shipper’s export declaration. The investigation was conducted by the Commerce Department, ICE, and DCIS. The case was prosecuted by the U.S. Attorney’s Office for the District of Columbia.

Military Night Vision Technology to China, Singapore, U.K.

On March 27, 2007, ITT Corporation, the leading manufacturer of military night vision equipment for the U.S. Armed Forces, agreed to pay a $100 million penalty and admitted to illegally exporting restricted night vision data to China, Singapore, and the United Kingdom. The company also pleaded guilty to charges that it omitted statements of material fact in required arms exports reports. The $100 million penalty is believed to be one the largest ever in a criminal export control case. As part of the plea agreement, ITT Corporation must invest $50 million of the penalty toward the development and deployment of the most advanced night vision systems in the world for the U.S. Armed Forces. The investigation was conducted by DCIS and ICE. The case is being prosecuted by the U.S. Attorney for the Western District of Virginia.

Machine Guns, Arms to Indonesia

On Jan. 18, 2007, Hadianto Djuliarso pleaded guilty to charges of conspiracy to violate the Arms Export Control Act and money laundering in a scheme to purchase and illegally export more than $1 million worth of machine guns, sniper rifles and other weapons to Indonesia. Djuliarso also made inquiries into purchasing Sidewinder missiles and strafing ammunition. Three other defendants have pleaded guilty in this scheme. The investigation was conducted by ICE and DCIS, and is being prosecuted by the U.S. Attorney for the Eastern District of Michigan.

Military Combat Simulation Software to China, Malaysia, Thailand

On Dec. 14, 2006, Xiaodong Sheldon Meng was charged with stealing military combat and commercial simulation software from Quantum3D, his former employer in California, and using these materials in demonstration and sales proposals to the government of China, the Malaysian Air Force and the Thailand Air Force. Much of the software was designed exclusively for military applications and for precision training of fighter pilots in night vision scenarios. The investigation was conducted by the FBI and ICE. The case is being prosecuted by the U.S. Attorney for the Northern District of California.

— Hannah Bandalan