The State Department announced debarments against seven people convicted of violating the Arms Export Control Act. The debarments, which will be imposed starting June 4, target Ronald Adjei Danso, Julian Alonso Higuera, Qingshan Li (see 2006150026), Si Mong Park (see 2009220055), Maritza Rubio, Wei Sun (see 2011180019) and Randy Lew Williams. All seven are “generally ineligible” to participate in activity controlled by the International Traffic in Arms Regulations for three years following their dates of convictions. At the end of that period, they must apply to be reinstated from their debarment before engaging in ITAR activities.
Tina Chen, a resident of Las Vegas and owner of electronics and computer components exporter Top One Zone, was indicted by a federal grand jury for conspiracy to export goods from the U.S. to Iran, the Department of Justice said in a May 28 news release. Chen allegedly worked with others to purchase and ship goods from U.S. companies through entities in Hong Kong to individuals in Iran without a license from the Treasury Department's Office of Foreign Assets Control. Chen hid the identities of the end-users, DOJ alleged. She is charged with one count of conspiracy to unlawfully export goods to Iran in violation of the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations -- a charge that carries a maximum penalty of 20 years in prison and a $1 million fine.
Two Bolivian nationals and three U.S. citizens were arrested on charges of bribery and money laundering relating to payments made by a U.S. company and individuals to secure a Bolivian government contract, then the laundering of the payments through the U.S. financial system, the Department of Justice announced. Luis Berkman, Bryan Berkman and Philip Lichtenfeld allegedly paid $602,000 in bribes to Arturo Murillo Prijic, the then-Bolivian minister of government; Sergio Mendez Mendizabal, the Ministry of Government's former chief of staff; and one other Bolivian official. The bribes were paid to secure a $5.6 million contract for tear gas and other non-lethal equipment between Bryan Berkman's Florida-based company and the Bolivian Ministry of Defense, DOJ said.
San Diego company EcoShield and its owner Samir Haj pleaded guilty in federal court to illicitly importing, selling and mailing a pesticide marketed as a killer of viruses such as COVID-19. According to a May 25 press release from the Office of the U.S. Attorney for the Southern District of California, Haj imported the pesticide packaged as small badges from Japan, labeled it as an air purifier and lied on declaration forms, leading to a customs duty underpayment of $33,919. Further, the product, called EcoAirDoctor, contained the ingredient sodium chlorite, which is illegal to mail because it is flammable. Haj illegally shipped the pesticide via U.S. mail. In the plea agreements, EcoShield and Haj agreed to forfeit $427,689 from the sale of the product and pay restitution of $86,754 for the unpaid duty costs and costs of disposing of the product. The defendants also paid a $42,000 fine.
Italian company GVA International Oil and Gas Services pleaded guilty to violating the Export Control Act after conspiring to obtain a power turbine for use on a Russian Arctic deepwater drilling platform. According to a May 26 press release from the U.S. Attorney for the Southern District of Georgia, GVA admitted to working with Russia-based energy company KS Engineering to procure the $17.3 million turbine from a U.S. manufacturer for the project -- a move prohibited by the Commerce Department without first obtaining a license. While attempting to finalize the transaction, GVA employee Bruno Caparini, along with a KSE employee and an employee of the Georgia-based firm World Mining and Oil Supply, was arrested. GVA owner Gabrielle Villone is currently in prison serving a 28-month sentence after pleading guilty to conspiracy to violate the ECA.
Two former Chadian diplomats posted to the U.S. were charged with bribery and money laundering after allegedly accepting a $2 million bribe from a Canadian energy company in exchange for obtaining oil rights in the African nation. Mahamoud Bechir and Youssouf Takane took the bribe and conspired to launder it while serving as diplomats in Chad's Embassy in Washington, 2009 to 2014, the Department of Justice said in a May 24 news release. The diplomats allegedly pledged to leverage their influence in Chad to secure the energy company the oil rights. The president of the Canadian company, Naeem Tyab, pleaded guilty to violating the Foreign Corrupt Practices Act.
Aerojet Rocketdyne, a rocket and missile propulsion manufacturer, settled a claim with the Department of Justice over whether the company did not allow a lawful permanent resident of the U.S. to apply for a position due to his immigration status. Aerojet violated the Immigration and Nationality Act's anti-discrimination provision when the company considered only U.S. citizens for 12 mechanic roles in Jupiter, Florida, without proper justification, DOJ said in a May 17 news release. Aerojet manufactures and sells advanced propulsion and energetics systems that are subject to federal regulations such as the International Traffic in Arms Regulations and Export Administration Regulations for its contracting work with the U.S. government and foreign companies.
The State Department’s recent $13 million penalty against Honeywell International highlighted the importance of company employees closely following internal compliance procedures and treading carefully when dealing with China, law firms said. It also showed that the State Department is committed to targeting weaker compliance programs but will impose lenient penalties if violations are self-disclosed, the firms said. Honeywell signed a settlement agreement with the agency earlier this month after it illegally sent drawings of export-controlled parts for military-related items to potential customers in several countries, including China (see 2105040018).
Sections 301 and 232 tariffs have created greater exposure to trade-related False Claims Act allegations, Sidley Austin said in a May 10 analysis. Since President Donald Trump drastically increased CBP's workload via the tariffs, greater incentives now exist to skirt the tariffs through fraudulent activity such as transshipment or inappropriate country of origin analysis for imports. This incentive for fraudulent activity mirrors the ramped-up incentives for the FCA allegations by those seeking to obtain a financial award for calling out the illegal behavior, the firm said.
Iranian national Mehrdad Ansari, a resident of the United Arab Emirates and Germany, was convicted by a federal jury for exporting sensitive military items to Iran in violation of the Iranian Trade Embargo, the Department of Justice said in a May 7 news release. Ansari transshipped dual-use civilian and military goods using his company, Gulf Gate Sea Cargo, located in the UAE, during 2007-2011. In this period, Ansari obtained or attempted to obtain more than 105,000 parts valued at $2.6 million, representiing more than 1,250 transactions, DOJ said. None received an export license from the Treasury's Office of Foreign Assets Control or the Commerce Department. The goods could be used in systems for nuclear weapons, missile guidance, secure tactical radio communications, offensive electronic warfare, military electronic countermeasures, and radar warning and surveillance, DOJ said.