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Illegal Export Scheme Could Net Substantial Fines, Prison Sentences

Thursday, June 14, 2018
Sandler, Travis & Rosenberg Trade Report

The Department of Justice reports that two California residents have pleaded guilty for their roles in a scheme to export components for the production of night vision and thermal devices in violation of the Arms Export Control Act. One of the individuals also pleaded guilty to laundering the proceeds from the scheme. 

According to a DOJ press release, the two admitted that from April 2012 until August 2016 they conspired to export to a company in Russia without the necessary license numerous scope components, including image intensifier tubes and lenses. They used their U.S. business to purchase these components and misrepresented to the sellers that the products would not be exported. They then shipped the products to Russia and other countries in Europe where an associate arranged for them to be hand-carried into Russia. The couple admitted that they knew a license was required to export the components, the DOJ said, and that they did not obtain a license. One of the individuals also admitted laundering the proceeds of the export crimes and using the name of a deceased person to conceal the fact that he was the source and owner of a U.S.-based account. 

The charge of conspiracy to violate the AECA carries a maximum sentence of 20 years in prison and a $1 million fine. The charges of money laundering and international money laundering each carries a maximum penalty of 20 years in prison and a $500,000 fine or twice the value of the funds involved.

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