Monthly Archives

August 2012

Aug 30

U.S. Sanctions Ban Iranian Players’ Access to War of Warcraft

By Blog, Internet / eCommerce, OFAC / Sanctions

Mists of Pandaria, a new update of War of Warcraft that is coming out later this year, is now unlikely to be accessible to players in Iran. (Photo by Blizzard Entertainment)

The Guardian reports that last week, Blizzard Entertainment’s online message board started receiving messages from Iranian players complaining that they could not access the War of Warcraft’s servers. The War of Warcraft is a massively multiplayer online role-playing game which is tremendously popular.

Since then, the company posted a statement on the message board stating, “What we can tell you is that United States trade restrictions and economic sanction laws prohibit Blizzard from doing business with residents of certain nations, including Iran. [. . .] This week, Blizzard tightened up its procedures to ensure compliance with these laws, and players connecting from the affected nations are restricted from access to Blizzard games and services.”

The statement further explained that U.S. sanctions also prevent Blizzard from providing any refunds, credits, transfers, or other service options to accounts in other countries that have similar sanctions.

The Guardian explains that “World of Warcraft is the world’s largest subscription-based online multiplayer game, with around 10 million users. Participants pay a monthly fee to explore its vast landscapes, engaging in quests and upgrading their in-game characters.”

According to Public Radio International, War of Warcraft fans in Cuba, Libya, North Korea and Syria are in the same boat. U.S. sanctions restrict residents in these countries from playing War of Warcraft as well.

Aug 24

Customs seizes $18 million in Counterfeit Contact Lenses and Merchandise

By Blog, Customs IP Enforcement, International IP

Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and officers from the Federal Food and Drug Administration (FDA), the Puerto Rico Police Department (PRPD), the San Juan Police Department (SJPD) and the Puerto Rico Department of Health’s Office of Investigations seized more than $18 million in counterfeit contact lenses and merchandise during the execution of several search warrants in eight different municipalities of Puerto Rico.

On Aug. 21, HSI special agents and partner law enforcement officers worked in teams to execute 17 federal search warrants at stores in the municipalities of San Juan, Caguas, Añasco, Bayamon, Ponce, Moca, Isabela and Naranjito, Puerto Rico. They seized 4,000 counterfeit Fresh Look contact lenses by Novartis, with an estimated manufacturer’s retail price (MSRP) of $200,000, along with 200,000 pieces of counterfeit merchandise from companies like Coach, Gucci, Ray Ban, Michael Kors, Rolex, Bulgari, Hublot, Nautica, Tous, Tiffany & Co., and Nike, among others. HSI special agents seized 25,000 counterfeit watches with an approximate MSRP of more than $3 million and 200 pairs of sneakers with an approximate MSRP of $32,000. The total MSRP of seized merchandise was approximately $18 million.

“The illegal importation and sale of counterfeit goods is a significant problem that affects our economy, impacts American jobs and innovation, puts the public’s health and safety at risk and at times threatens our national security,” said Angel Melendez, acting special agent in charge for HSI San Juan. “Consumers should know that if they buy pirated and unlicensed products, they are hurting legitimate businesses and they may also be facilitating criminal activity.”

SOURCE:  US ICE/HSI

Aug 06

$75 Million in Total Export Penalties for Illegally Helping China Develop Attack Helicopter

By Export, International Business, ITAR, Technology Transactions

Pratt & Whitney Canada Corp. (PWC), a Canadian subsidiary of the Connecticut-based defense contractor United Technologies Corporation (UTC),  pleaded guilty to violating the Arms Export Control Act and making false statements in connection with its illegal export to China of U.S.-origin military software used in the development of China’s first modern military attack helicopter, the Z-10.

In addition, UTC, its U.S.-based subsidiary Hamilton Sundstrand Corporation (HSC) and PWC have all agreed to pay more than $75 million as part of a global settlement with the Justice Department and State Department in connection with the China arms export violations and for making false and belated disclosures to the U.S. government about these illegal exports.  Roughly $20.7 million of this sum is to be paid to the Justice Department.  The remaining $55 million is payable to the State Department as part of a separate consent agreement to resolve outstanding export issues, including those related to the Z-10.  Up to $20 million of this penalty can be suspended if applied by UTC to remedial compliance measures.  As part of the settlement, the companies admitted conduct set forth in a stipulated and publicly filed statement of facts.

Today’s actions were announced by David B. Fein, U.S. Attorney for the District of Connecticut; Lisa Monaco, Assistant Attorney General for National Security; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); Ed Bradley, Special Agent in Charge of the Northeast Field Office of the Defense Criminal Investigative Service (DCIS); Kimberly K. Mertz, Special Agent in Charge of the FBI New Haven Division; David Mills, Department of Commerce Assistant Secretary for Export Enforcement; and Andrew J. Shapiro, Assistant Secretary of State for Political-Military Affairs.

The Charges

Today in the District of Connecticut, the Justice Department filed a three-count criminal information charging UTC, PWC and HSC.  Count One charges PWC with violating the Arms Export Control Act in connection with the illegal export of defense articles to China for the Z-10 helicopter.  Count Two charges PWC, UTC and HSC with making false statements to the U.S. government in their belated disclosures relating to the illegal exports.  Count Three charges PWC and HSC with failure to timely inform the U.S. government of exports of defense articles to China.

While PWC has pleaded guilty to Counts One and Two, the Justice Department has recommended that prosecution of UTC and HSC on Count Two, and PWC and HSC on Count Three be deferred for two years, provided the companies abide by the terms of a deferred prosecution agreement with the Justice Department.  As part of the agreement, the companies must pay $75 million and retain an Independent Monitor to monitor and assess their compliance with export laws for the next two years.

The Export Scheme

Since 1989, the United States has imposed a prohibition upon the export to China of all U.S. defense articles and associated technical data as a result of the conduct in June 1989 at Tiananmen Square by the military of the People’s Republic of China.  In February 1990, the U.S. Congress imposed a prohibition upon licenses or approvals for the export of defense articles to the People’s Republic of China.  In codifying the embargo, Congress specifically named helicopters for inclusion in the ban.

Dating back to the 1980s, China sought to develop a military attack helicopter.  Beginning in the 1990s, after Congress had imposed the prohibition on exports to China, China sought to develop its attack helicopter under the guise of a civilian medium helicopter program in order to secure Western assistance.  The Z-10, developed with assistance from Western suppliers, is China’s first modern military attack helicopter.

During the development phases of China’s Z-10 program, each Z-10 helicopter was powered by engines supplied by PWC.  PWC delivered 10 of these development engines to China in 2001 and 2002.  Despite the military nature of the Z-10 helicopter, PWC determined on its own that these development engines for the Z-10 did not constitute “defense articles,” requiring a U.S. export license, because they were identical to those engines PWC was already supplying China for a commercial helicopter.

Because the Electronic Engine Control software, made by HSC in the United States to test and operate the PWC engines, was modified for a military helicopter application, it was a defense article and required a U.S. export license.  Still, PWC knowingly and willfully caused this software to be exported to China for the Z-10 without any U.S. export license.  In 2002 and 2003, PWC caused six versions of the military software to be illegally exported from HSC in the United States to PWC in Canada, and then to China, where it was used in the PWC engines for the Z-10.

According to court documents, PWC knew from the start of the Z-10 project in 2000 that the Chinese were developing an attack helicopter and that supplying it with U.S.-origin components would be illegal.  When the Chinese claimed that a civil version of the helicopter would be developed in parallel, PWC marketing personnel expressed skepticism internally about the “sudden appearance” of the civil program, the timing of which they questioned as “real or imagined.”  PWC nevertheless saw an opening for PWC “to insist on exclusivity in [the] civil version of this helicopter,” and stated that the Chinese would “no longer make reference to the military program.” PWC failed to notify UTC or HSC about the attack helicopter until years later and purposely turned a blind eye to the helicopter’s military application.

HSC in the United States had believed it was providing its software to PWC for a civilian helicopter in China, based on claims from PWC.  By early 2004, HSC learned there might an export problem and stopped working on the Z-10 project.  UTC also began to ask PWC about the exports to China for the Z-10.  Regardless, PWC on its own modified the software and continued to export it to China through June 2005.

According to court documents, PWC’s illegal conduct was driven by profit.  PWC anticipated that its work on the Z-10 military attack helicopter in China would open the door to a far more lucrative civilian helicopter market in China, which according to PWC estimates, was potentially worth as much as $2 billion to PWC.

Belated and False Disclosures to U.S. Government

These companies failed to disclose to the U.S. government the illegal exports to China for several years and only did so after an investor group queried UTC in early 2006 about whether PWC’s role in China’s Z-10 attack helicopter might violate U.S. laws.  The companies then made an initial disclosure to the State Department in July 2006, with follow-up submissions in August and September 2006.

The 2006 disclosures contained numerous false statements.  Among other things, the companies falsely asserted that they were unaware until 2003 or 2004 that the Z-10 program involved a military helicopter.  In fact, by the time of the disclosures, all three companies were aware that PWC officials knew at the project’s inception in 2000 that the Z-10 program involved an attack helicopter.

Today, the Z-10 helicopter is in production and initial batches were delivered to the People’s Liberation Army of China in 2009 and 2010.  The primary mission of the Z-10 is anti-armor and battlefield interdiction.  Weapons of the Z-10 have included 30 mm cannons, anti-tank guided missiles, air-to-air missiles and unguided rockets.

“PWC exported controlled U.S. technology to China, knowing it would be used in the development of a military attack helicopter in violation of the U.S. arms embargo with China,” said U.S. Attorney Fein.  “PWC took what it described internally as a ‘calculated risk,’ because it wanted to become the exclusive supplier for a civil helicopter market in China with projected revenues of up to two billion dollars.  Several years after the violations were known, UTC, HSC and PWC disclosed the violations to the government and made false statements in doing so.  The guilty pleas by PWC and the agreement reached with all three companies should send a clear message that any corporation that willfully sends export controlled material to an embargoed nation will be prosecuted and punished, as will those who know about it and fail to make a timely and truthful disclosure.”

“Due in part to the efforts of these companies, China was able to develop its first modern military attack helicopter with restricted U.S. defense technology.  As today’s case demonstrates, the Justice Department will spare no effort to hold accountable those who compromise U.S. national security for the sake of profits and then lie about it to the government,” said Assistant Attorney General Monaco.  “I thank the agents, analysts and prosecutors who helped bring about this important case.”

“This case is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses,” said ICE Director Morton.  “I am hopeful that the conviction of Pratt & Whitney Canada and the substantial penalty levied against United Technologies and its subsidiaries will deter other companies from considering similarly ill-conceived business practices in the future.  American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries and their subsidiaries, which is why ICE will continue its present campaign to aggressively investigate and prosecute criminal violations of U.S. export laws relating to national security.”

“… [These] charges and settlement demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and fellow agencies to protect sensitive U.S. defense technology from being illegally exported,” said DCIS Special Agent in Charge Bradley.  “Safeguarding our military technology is vital to our nation’s defense and the protection of our war fighters both home and abroad.  We know that foreign governments are actively seeking U.S. defense technology for their own development.  Thwarting these efforts is a top priority for DCIS.  I applaud the agents and prosecutors who worked tirelessly to bring about this result.”

“Preventing the loss of critical U.S. information and technologies is one of the most important investigative priorities of the FBI,” said FBI Special Agent in Charge Mertz.  “Our adversaries routinely target sensitive research and development data and intellectual property from universities, government agencies, manufacturers, and defense contractors.  While the thefts associated with economic espionage and illegal technology transfers may not capture the same level of attention as a terrorist incident, the costs to the U.S. economy and our national security are substantial.  Violations of the Arms Export Control Act put our nation at risk and the FBI, along with all of our federal agency partners, are committed to ensuring that embargoed technologies do not fall into the wrong hands.  Those who violate these laws should expect to be held accountable.  An important part of the FBI’s strategy in this area involves the development of strategic partnerships.  In that regard, the FBI looks forward to future coordination with UTC and its subsidiaries to strengthen information sharing and counterintelligence awareness.”

“Protecting national security is our top priority,” said Assistant Secretary of Commerce for Export Enforcement Mills.  “Today’s action sends a clear signal that federal law enforcement agencies will work together diligently to prevent U.S. technology from falling into the wrong hands.”

Assistant Secretary Shapiro, of the State Department’s Bureau of Political and Military Affairs, said, “Today’s $75 million settlement with United Technologies Corporation sends a clear message:  willful violators of U.S. arms export control regulations will be pursued and punished.  The successful resolution of this case is the byproduct of the tireless work of our compliance officers and highlights the relentless commitment of the State Department to protect sensitive American technologies from being illegally transferred.”

Aug 06

Virginia Company to Pay $8.82 Million Criminal Penalty for FCPA Violations

By FCPA, International Business

Data Systems & Solutions LLC (DS&S), a company based in Reston, Va., that provides design, installation, maintenance and other services at nuclear and fossil fuel power plants, has agreed to pay an $8.82 million criminal penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA).

The department filed a two-count criminal information in the Eastern District of Virginia charging DS&S with conspiring to violate, and violating, the FCPA’s anti-bribery provisions.

According to court documents, DS&S paid bribes to officials employed by the Ignalina Nuclear Power Plant, a state-owned nuclear power plant in Lithuania, to secure contracts to perform services for the plant.   To disguise the scheme, the bribes were funneled through several subcontractors located in the United States and abroad.   The subcontractors, in turn, made repeated payments to high-level officials at Ignalina via check or wire transfer.

The department also filed a deferred prosecution agreement with DS&S.   Under the terms of the agreement, the department will defer prosecution of DS&S for two years.   In addition to the monetary penalty, DS&S agreed to cooperate with the department, to report periodically to the department concerning DS&S’s compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.   If DS&S abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the agreement’s term expires.

The agreement acknowledges DS&S’s extraordinary cooperation, including conducting an extensive, thorough and swift internal investigation; providing to the department extensive information and evidence; and responding promptly and fully to the department’s requests.   In addition, DS&S has engaged in extensive remediation, including terminating the officers and employees responsible for the corrupt payments; instituting a more rigorous compliance program; enhancing its due diligence protocol for third-party agents and subcontractors; strengthening its ethics policies; providing FCPA training for all agents and subcontractors; and establishing heightened review of most foreign transactions.

SOURCE:  US DOJ

Aug 05

ING Bank to Forfeit $619 Million for Role in Violating US Sanctions Laws

By Export, ITAR, OFAC / Sanctions

ING Bank N.V., a financial institution headquartered in Amsterdam, has agreed to forfeit $619 million to the Justice Department and the New York County District Attorney’s Office for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) and for violating New York state laws by illegally moving billions of dollars through the U.S. financial system on behalf of sanctioned Cuban and Iranian entities. The bank has also entered into a parallel settlement agreement with the Treasury Department’s Office of Foreign Assets Control (OFAC).

A criminal information was filed today in federal court in the District of Columbia charging ING Bank N.V. with one count of knowingly and willfully conspiring to violate the IEEPA and TWEA. ING Bank waived the federal indictment, agreed to the filing of the information and has accepted responsibility for its criminal conduct and that of its employees. ING Bank agreed to forfeit $619 million as part of the deferred prosecution agreements reached with the Justice Department and the New York County District Attorney’s Office.

According to court documents, starting in the early 1990s and continuing until 2007, ING Bank violated U.S. and New York state laws by moving more than $2 billion illegally through the U.S. financial system – via more than 20,000 transactions – on behalf of Cuban and Iranian entities subject to U.S. economic sanctions. ING Bank knowingly and willfully engaged in this criminal conduct, which caused unaffiliated U.S. financial institutions to process transactions that otherwise should have been rejected, blocked or stopped for investigation under regulations by OFAC relating to transactions involving sanctioned countries and parties. “The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said Assistant Attorney General Monaco. “I applaud the agents, analysts and prosecutors who for years pursued this case.”

“Banks that try to skirt U.S. sanctions laws undermine the integrity of our financial system and threaten our national security,” said U.S. Attorney Machen. “When banks place their loyalty to sanctioned clients above their obligation to follow the law, we will hold them accountable. On more than 20,000 occasions, ING intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities. Today’s $619 million forfeiture – the largest ever – holds ING accountable for its wrongdoing.”

“For years, ING Bank blatantly violated U.S. laws governing transactions involving Cuba and Iran, and then used shell companies and other deceptive measures to cover up its criminal conduct,” said Assistant Attorney General Breuer. “Today’s resolution reflects a strong collaboration among federal and state law enforcement partners to hold ING accountable.”

“Investigations of financial institutions, businesses and individuals who violate U.S. sanctions by misusing banks in New York are vitally important to national security and the integrity of our banking system,” said New York County District Attorney Vance. “These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking and ultimately contribute to the fight against money laundering and terror financing. I thank our federal partners for their cooperation and assistance in pursuing this investigation.”

“Today, ING Bank was held accountable for their illegal actions involving the movement of more than $2 billion through the U.S. financial system on behalf of Cuban and Iranian entities subject to U.S. economic sanctions,” said FBI Assistant Director in Charge McJunkin. “Investigations of this type are complicated and demand significant time and dedication from agents, analysts and prosecutors. In this case, their steadfast tenacity brought this case through to today’s result, and we will continue to pursue these matters in diligent fashion.”

“In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries,” said IRS Criminal Investigation Chief Weber. “The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations. Creating new strategies and models of cooperation among our law enforcement partners to ensure international financial compliance is a top-priority of the IRS.”

“Our sanctions laws reflect core U.S. national security and foreign policy interests and OFAC polices them aggressively. Today’s historic settlement should serve as a clear warning to anyone who would consider profiting by evading U.S. sanctions,” said OFAC Director Szubin. “We commend our federal and state colleagues for their work on this important investigation.”

The Scheme

According to court documents, ING Bank committed its criminal conduct by, among other things, processing payments for ING Bank’s Cuban banking operations through its branch in Curaçao on behalf of Cuban customers without reference to the payments’ origin, and by providing U.S. dollar trade finance services to sanctioned entities through misleading payment messages, shell companies and the misuse of ING Bank’s internal suspense account.

Furthermore, ING Bank eliminated payment data that would have revealed the involvement of sanctioned countries and entities, including Cuba and Iran; advised sanctioned clients on how to conceal their involvement in U.S. dollar transactions; fabricated ING Bank endorsement stamps for two Cuban banks to fraudulently process U.S. dollar travelers’ checks; and threatened to punish certain employees if they failed to take specified steps to remove references to sanctioned entities in payment messages.

According to court documents, this conduct occurred in various business units in ING Bank’s wholesale banking division and in locations around the world with the knowledge, approval and encouragement of senior corporate managers and legal and compliance departments. Over the years, several ING Bank employees raised concerns to management about the bank’s sanctions violations. However, no action was taken.

For decades, the United States has employed sanctions and embargoes on Iran and Cuba. Financial transactions conducted by wire on behalf of Iranian or Cuban financial institutions have been subject to these U.S. sanctions. The TWEA prohibits U.S. persons from engaging in financial transactions involving or benefiting Cuba or Cuban nationals and prohibits attempts to evade or avoid these restrictions. IEEPA makes it a crime to willfully attempt to commit, conspire to commit, or aid and abet in the commission of any violations of the Iranian Transaction Regulations, which prohibit the exportation of any services from the United States to Iran and any attempts to evade or avoid these restrictions. IEEPA and TWEA regulations are administered by OFAC.

The Investigation

The Justice Department’s investigation into ING Bank arose out of ongoing investigations into the illegal export of goods from the United States to sanctioned countries, including Iran. For instance, ING processed payments on behalf of one customer, Aviation Services International B.V. (ASI), a Dutch aviation company which was the subject of a U.S. Commerce Department-initiated criminal investigation, through the United States for trade services relating to the procurement by ASI of dual-use U.S. aviation parts for ASI’s Iranian clients. The ING Bank investigation also resulted in part from a criminal referral from OFAC, which was conducting its own probe of ING Bank.

ING Bank’s forfeiture of $309.5 million to the United States and $309.5 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in 18 months, provided ING Bank fully cooperates with, and abides by, the terms of the deferred prosecution agreement.

OFAC’s settlement agreement with ING deems the bank’s obligations to pay a civil settlement amount of $619 million to be satisfied by its payment of an equal amount to the Justice Department and the state of New York. OFAC’s settlement agreement further requires the bank to conduct a review of its policies and procedures and their implementation, taking a risk-based sampling of U.S. dollar payments, to ensure that its OFAC compliance program is functioning effectively to detect, correct and report apparent sanctions violations to OFAC.

SOURCE:   BIS

Aug 05

Customs Announces Simplified Entry Pilot to Enhance Cargo Security

By Import

U.S. Customs and Border Protection announces the delivery of the first phase of Cargo Release, known as Simplified Entry, in the Automated Commercial Environment. Simplified Entry provides importers with the chance to file a streamlined set of data earlier in the filing process providing more information earlier in the process and reduces the time needed for cargo to be released into the stream of commerce.

“The Simplified Entry Pilot is an outstanding example of what can happen when the government and the private sector co-create trade programs,” said Acting Commissioner, David V. Aguilar. “Simplified Entry will enhance cargo security, reduce cycle times, improve productivity, help eliminate redundant data transmissions, and potentially reduce costs.”

CBP has received the first Simplified Entry filings at each of the three pilot ports of Indianapolis, Chicago and Atlanta, as part of the pilot test that began May 29, 2012. To date, six of the nine pilot participants selected in December of 2011 have begun filing Simplified Entries.

Simplified Entry streamlines the release of goods and enhances cargo security. It segregates the filing of the transportation information from the filing of the entry information. This allows for the earlier filing of entry information. This, in turn, allows CBP personnel to apply more time and resources to higher risk shipments.

For information on Simplified Entry and other trade developments, visit the Trade website. ( Trade )

SOURCE:  CBP

Aug 04

CBP Officers Pull the Plug on Unsafe Trees

By Import

As part of a joint effort with investigators from the Consumer Product Safety Commission (CPSC), U.S. Customs and Border Protection (CBP) officers from the Port of Detroit targeted and seized three shipments of LED lighted trees after they were found to have undersized wiring and insufficient strain relief making them an electrical and flammability hazard. The total retail value of the trees was $9800.

The container, originating from China and destined for Michigan, arrived into the United States from Canada via commercial train at the International Falls Port of Entry on June 1. Upon arrival in Detroit, the shipment was examined by CBP officers who, in turn, sent product samples to the CPSC for analysis. A review of the samples by CPSC determined the products to be unsafe for the American consumer market.

“CBP officers work diligently to detect and prevent the importation of fraudulent merchandise that could cause serious injury to consumers,” said Roderick Blanchard, Port Director.

CBP in Detroit continues to work with Immigration and Customs Enforcement, the Consumer Product Safety Commission and other enforcement agencies and organizations to combat the illegal import of counterfeit goods which pose significant health and safety dangers to the American public.

Aug 04

California Man Pleads Guilty to Illegal Exports to Iran, Faces up to 20 years in Prison

By Export, International Business, ITAR

A California man pleaded guilty in Federal Court in Chicago to a felony charge stemming from his efforts to illegally export missile components from the United States to Iran, via the United Arab Emirates. The defendant, Andro Telemi, 42, of Sun Valley, Calif., pleaded guilty to one count of attempting to export defense articles on the U.S. Munitions List from the United States without a license or approval from the U.S. Department of State in violation of the Arms Export Control Act.

U.S. District Judge Samuel Der-Yeghiayan set sentencing for Oct. 30. Telemi faces a maximum penalty of 20 years in prison a $250,000 fine. Telemi pleaded guilty without entering into a plea agreement with the government.

“Our national security is threatened when anyone attempts to illegally export restricted military components that could fall into the wrong hands,” Mr. Hartwig said. “HSI will continue to aggressively investigate individuals and organizations who would seek to sell sensitive technology at the expense of our own security.”

Telemi, a naturalized U.S. citizen from Iran, also known as “Andre Telimi,” and “Andre Telemi,” was indicted in December 2009, along with co-defendant Davoud Baniameri, 39, of Woodland Hills, Calif. A superseding indictment in July 2010 charged Baniameri, Telemi and a third defendant, Syed Majid Mousavi, an Iranian citizen living in Iran. Baniameri pleaded guilty last year and was sentenced to 51 months in federal prison. Mousavi, also known as “Majid Moosavy,” remains a fugitive and is believed to be in Iran.

According to Telemi’s guilty plea and court records, sometime before Aug. 17, 2009, Baniameri contacted Telemi and requested his assistance in purchasing and exporting to Iran via Dubai 10 connector adapters for the TOW and TOW2 anti-armor missile systems. Telemi agreed and over the next month, they negotiated the purchase of 10 connector adaptors for $9,450 from a company in Illinois, which unbeknownst to them, was controlled by law enforcement. In September 2009, after Baniameri made a down payment to the Illinois company, he arranged for Telemi to pay the remaining balance and take possession of the connector adaptors in California. Telemi knew that he needed to obtain a license from the U.S. government to export the connector adaptors, and at no time did he or anyone else obtain, or attempt to obtain, such a license.

SOURCE:  BIS

Aug 04

PRACTICAL TIP: Top ROI for Your Legal Dollars

By Blog, Customs IP Enforcement, Export, FCPA, Foreign Trade Zones (FTZ), Grab Bag, Import, Intellectual Property, International Business, International IP, Internet / eCommerce, ITAR, News

Based on our experience, some of the best uses of resources on legal advice and assistance for businesses and entrepreneurs (from a “bang for your buck” perspective) are:

  • Succession Planning. This includes buy-sell and similar provisions in company documents to deal with death, divorces, and other departures of co-owners, and also includes an updated estate plan such as a will and advance directives to ensure your legacy.

The benefits one can obtain from these legal mechanisms and protections, which generally cost less than $2,000, can pay for themselves many times over.

 

Aug 04

Tulsa Company Resolves FCPA Violations and Agrees to Pay $2 Million Penalty

By FCPA, International Business

The NORDAM Group Inc., a provider of aircraft maintenance, repair and overhaul (MRO) services based in Tulsa, Okla., has entered into an agreement with the Department of Justice to pay a $2 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA).

According to the agreement, NORDAM, its subsidiaries and affiliates paid bribes to employees of airlines created, controlled and exclusively owned by the People’s Republic of China in order to secure contracts to perform MRO services for those airlines.  The bribes were paid both directly and indirectly to the airline employees.  In an effort to disguise the bribes, three employees of NORDAM’s affiliate entered into sales representation agreements with fictitious entities and then used the money paid by NORDAM to those entities to pay bribes to the airline employees.

In addition to the monetary penalty, NORDAM agreed to cooperate with the department for the three-year term of the agreement, to report periodically to the department concerning NORDAM’s compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.

The department entered into a non-prosecution agreement with NORDAM as a result of NORDAM’s timely, voluntary and complete disclosure of the conduct, its cooperation with the department and its remedial efforts.  In addition, the agreement recognizes that a fine below the standard range under the U.S. Sentencing Guidelines is appropriate because NORDAM fully demonstrated to the department, and an independent accounting expert retained by the department verified, that a fine exceeding $2 million would substantially jeopardize the company’s continued viability.

Additional information about the Justice Department’s FCPA enforcement efforts can be found Here.

 

SOURCE:  US DOJ