Fact Sheet: Counter-Proliferation Investigations
June 6, 2012
Overview
One of U.S. Immigration and Customs Enforcement's (ICE) highest priorities is to prevent illicit procurement networks, terrorist groups and hostile nations from illegally obtaining U.S. military products, sensitive dual-use technology, weapons of mass destruction, or chemical, biological, radiological and nuclear materials. ICE Homeland Security Investigation's (HSI) Counter-Proliferation Investigations Program oversees a broad range of investigative activities related to such violations. It enforces U.S. laws involving the export of military items and controlled dual-use goods as well as exports to sanctioned or embargoed countries.
In fiscal year 2011, HSI special agents initiated more than 1,800 new counter-proliferation investigations, made 450 arrests, indicted 438 individuals, obtained 264 convictions, and seized millions of dollars worth of military weaponry and other highly sensitive commodities. These efforts significantly contributed to preventing sensitive U.S. technologies, as well as weapons, from reaching the hands of terrorists, hostile countries and violent criminal organizations.
Through an industry outreach program called Project Shield America, HSI special agents conduct presentations for U.S. manufacturers and exporters of arms and sensitive technology. The program provides an overview of export laws and solicits the private industry's assistance in preventing illegal foreign acquisition of their products. Since the program's inception in late 2001, HSI special agents have conducted more than 20,000 industry outreach presentations.
Notable ICE Counter-Proliferation Investigations Cases
Radiation-Hardened Aerospace Technology to China – On Sept. 30, 2011, Hong Wei Xian, aka “Harry Zan,” and Li Li, aka “Lea Li,” citizens of China, were sentenced in the Eastern District of Virginia to 24 months in prison for conspiracy to violate the Arms Export Control Act and conspiracy to smuggle goods unlawfully from the United States, in connection with their efforts to export to China radiation-hardened microchips that are used in satellite systems and are classified as defense articles. Zan and Li operated a company in China called Beijing Starcreates Space Science and Technology Development Company Limited. The defendants ultimately attempted to purchase 40 programmable read-only microchips.
Military Flight Simulation Technology to Iran – On Sept. 26, 2011, Hok Shek Chan, a citizen of Hong Kong, was sentenced in the District of Massachusetts to three and a half years in prison for conspiring to obtain components for C-130 military flight simulators from the United States for delivery to Iran. On March 25, 2010, the indictment was unsealed, charging Chan and two citizens of Malaysia, Wong Fook Loy and Ngo Tek Chai, with conspiring to and attempting to illegally export munitions. Chan had conspired with Loy, Chai and others to cause the export of 10 indicator servo tachometers used in C-130 military flight simulators from the United States for use in Iran.
Arms Exports to Russia – On July 21, 2011, Sergey Korznikov, a citizen of Russia, was sentenced in the Middle District of Pennsylvania to six months in prison and two years supervised release for conspiracy to smuggle military articles from the U.S. to Russia. On July 29, 2010, co-defendant Mark Komoroski, a U.S. citizen, was sentenced to 32 months in prison and ordered to pay $10,000 for conspiring to smuggle military equipment to Russia. Korznikov, Komoroski and two companies, D&R Sports Center and Tactica Limited, were charged in a 2008 superseding indictment with conspiring to smuggle military equipment, including more than 1,000 rifle scopes, magazines for firearms, face shields and other military equipment from the U.S. to Russia for resale.
Vacuum Pumps with Potential Nuclear Applications to Iran – On July 6, 2011, Jirair Avanessian was sentenced to 18 months in prison in connection with his role in a conspiracy to violate the International Emergency Economic Powers Act and the Iran trade embargo, including smuggling and money laundering. Avanessian was also ordered to pay a $10,000 fine and forfeit the proceeds of his criminal activity. In July 2010, Avanessian pleaded guilty to conspiracy to illegally export specialized vacuum pump equipment to Iran in violation of the Iranian Transaction Regulations and other regulations. Another suspect in the case, Amirhossein Sairafi, a citizen of Iran, was arrested by German authorities and subsequently extradited to the U.S. Sairafi pleaded guilty to conspiracy to defraud the U.S., money laundering and violating the International Emergency Economic Powers Act. In March 2011, Sairafi was sentenced to 41 months in prison. A third conspirator, Farhad Masoumian, believed to be in Iran, who was charged along with Avanessian, remains at large. Allegedly, Masoumian directed Avanessian to procure and illegally export vacuum pump equipment using false shipping documentation to avoid inspection or detection. The equipment was shipped to a company called AVAC in the United Arab Emirates where Sairafi was the managing director. Once Sairafi received the equipment, he would forward it to Masoumian in Iran.
Assault Weapon Parts and Gun Sights to Philippines – On Feb. 7, 2011, Mike Cabatingan pleaded guilty in the District of Arizona to conspiracy to violate the Arms Export Control Act and International Emergency Economic Powers Act. On Feb. 24, 2010, Romulo Reclusado, Tirso Aguayo and Mike Cabatingan were indicted in the Central District of California for conspiring to illegally export defense articles and other controlled items from the U.S. to the Philippines. Allegedly, they tried to export molds used to make components for AR-15 assault rifles as well as holographic rifle sights. On Feb. 25, 2010, Aguayo and Cabatingan were arrested. Reclusado remains at large.
Tactical SUVs Armed with M134 Mini-guns to Turkmenistan – On Feb. 4, 2011, Ruslan Gilchenko, who represents a company in Slovenia, was sentenced in the District of Arizona to 18 months in prison and three years supervised release for conspiracy to violate the Arms Export Control Act. A February 24, 2010, indictment charged Gilchenko and Victor Dobrogaiev with conspiracy to violate the Arms Export Control Act, money laundering and fraud charges. Gilchenko and Dobrogaiev attempted to obtain three sport utility vehicles outfitted with M134 mini-guns, fully automatic defense suppression weapons that fire at a rate of 3,000 rounds per minute, for illegal export to Turkmenistan. As part of the conspiracy, the defendants agreed to pay $1.2 million to purchase three armed vehicles and forwarded $340,000 to sellers in the United States as a down payment. On Sept. 29, 2010, Gilchenko pleaded guilty to the conspiracy count.
Electronics Used in Military Radar & Electronic Warfare to China – On Jan. 27, 2011, Yufeing Wei was sentenced in the District of Massachusetts to 36 months in prison. On Jan. 26, 2011, codefendant Zhen Zhou Wu was sentenced to 97 months in prison. May 17, 2010, Wu, Wei and Chitron Electronics, Inc., with an office in Massachusetts, were convicted for conspiring to violate U.S. export laws over a ten year period and illegally exporting defense articles and export controlled electronics equipment from the U.S. to China. Several Chinese military entities received the equipment. Wu and Wei were also convicted of filing false shipping documents with the U.S. government.
Stealth Missile Designs and Military Technical Data to China – On Jan. 24, 2011, Noshir Gowadia, of Hawaii, was sentenced in the District of Hawaii to 32 years in prison for communicating classified national defense information to China, illegally exporting military technical data, money laundering, filing false tax returns and other offenses. On Aug. 9, 2010, Gowadia was found guilty of 14 criminal violations following a 40-day federal trial in Hawaii. Evidence at trial revealed that from July 2003 to June 2005, Gowadia took six trips to China to provide defense services in the form of design, test support and test data analysis of certain technologies to develop a stealthy exhaust nozzle for one of China's cruise missile systems. Gowadia was an engineer with Northrop Grumman Corporation from 1968 to 1986 and contributed to the development of the propulsion system and low observable capabilities of the B-2 bomber.
2,000 AK-47 Assault Rifles to Somalia – On Jan. 7, 2011, Chanoch Miller, a citizen of Israel, was sentenced in the Southern District of Florida to 18 months of confinement and three years supervised release. Joseph O'Toole, a retired U.S. Air Force Colonel F-4 Fighter pilot, was sentenced to one year and one day in federal prison. Both individuals conspired to sell thousands of assault rifles to war torn Somalia, an embargoed nation, without having first obtained a license or written approval from the State Department, violating the Arms Export Control Act.
Rocket Propulsion Systems, Engines and Technology to South Korea – On Oct. 20, 2010, Juwhan Yun, a naturalized U.S. citizen originally from Korea, was sentenced in the Southern District of Florida to 57 months in prison and three years supervised release. On May 24, 2010, Yun pleaded guilty to attempting to illegally export defense articles to South Korea. Yun attempted to export RD-180 rocket propulsion systems, engines and technology that are on the U.S. Munitions List and the Missile Technology Control Regime Annex.
Sensitive Military Encryption Technology to China – On Sept.13, 2010, Chi Tong Kuok, a resident of Macau, China, was sentenced in the Southern District of California to 96 months in prison for trying to acquire sensitive defense technology used in encrypted U.S. military or government communications for China. A July 2009 multicount indictment charged Kuok with conspiracy to export defense articles and smuggle goods from the United States, attempting to export defense articles without a license and money laundering.
Nuclear-Related Equipment to Iran – On July 29, 2010, Mahmoud Yadegari was sentenced in a Canadian court to four years, three months incarceration for attempting to export pressure transducers to Iran. Yadegari purchased the pressure transducers from a company in Massachusetts and had them exported to Canada where he attempted to forward them to Iran through the United Arab Emirates. Pressure transducers have applications in the production of enriched uranium, a critical step in creating nuclear energy and weapons. Company officials in Massachusetts alerted HSI to the purchases. HSI, in turn, coordinated its investigation with Canadian authorities.
Combat Riflescopes Overseas – On June 25, 2010, Chou-Fu Ho, of San Diego, was arrested after being indicted in the Southern District of California on charges of smuggling and illegally exporting military night vision systems to various overseas locations ranging from Ireland to China, without the required State Department licenses. On July 29, 2010, Ho pleaded guilty to one count of violating the Arms Export Control Act.
Oil Field Equipment to the Sudan – On June 22, 2010, Agar Corporation Inc., a Houston company, pleaded guilty to violating the International Emergency Economic Powers Act. The company agreed to pay $2 million in criminal fines and forfeiture as well as civil penalties to the U.S. Treasury's Office of Foreign Assets Control. Agar illegally facilitated the export of multiphase flow meters through an affiliate in Venezuela to the Sudan. The meters were used in the Melut Basin oilfield, violating the embargo exports to Sudan.
Military Optics Technology to China, Russia, Turkey and South Korea – On June 22, 2010, in the District of Colorado, Rocky Mountain Instrument Company (RMI) of Colorado pleaded guilty to one count of knowingly and willfully exporting defense articles without a license in violation of the Arms Export Control Act. RMI was sentenced to five years probation and ordered to forfeit $1 million. Between April 2005 and October 2007, RMI exported prisms and technical data related to optics used in military applications to Turkey, South Korea, China and Russia without obtaining the required export licenses. The technology was used in unmanned aerial vehicles, AC-130 gunships, Abrams tanks, TOW missile systems and Bradley fighting vehicles.
Fighter Jet Components to Iran – On June 17, 2010, Omid Khalili, an Iranian national, pleaded guilty in the Southern District of Alabama to attempting to illegally exporting U.S. fighter jet parts from the United States to Iran. He and another defendant, Masun, whose last name is unknown, were charged with conspiracy, money laundering, smuggling and violations of the Arms Export Control Act and the International Emergency Economic Powers Act. The two actively worked with the Iranian government to procure military items.
Satellite Hardware and Technology to Iran – On June 8, 2010, Nader Modanlo, a U.S. citizen, was arrested in Maryland for conspiring to illegally provide satellite hardware and technology to Iran and money laundering. On
June 2, 2010, Modanlo and five citizens of Iran were indicted in the District of Maryland for the conspiracy, in violation of the International Emergency Economic Powers Act and the Iran trade embargo, which involved the use of front companies to conceal Iranian involvement in prohibited activities and transactions. The other defendants remain at large.
BAE Systems PLC Pleads Guilty and Ordered to Pay $400 Million – On March 1, 2010, BAE Systems PLC, a multinational defense contractor with headquarters in the United Kingdom, pleaded guilty in the District of Columbia to conspiracy to defraud the United States, conspiracy to make false statements about its Foreign Corrupt Practices Act compliance program and conspiracy to violate the Arms Export Control Act and International Traffic in Arms Regulations. BAE Systems admitted that it knowingly and willfully failed to identify commissions paid to third parties for assistance in soliciting, promoting or otherwise securing sales of defense items.
Military Equipment to Yemen, Libya & Other Locations – On Jan. 7, 2010, Ioannis Papathanassiou entered a guilty plea on behalf of his company, Taipan Enterprises Ltd., for attempting to illegally broker the sale of weapons, night vision goggles, and other military equipment to Yemen, Libya, Chile and other countries. Taipan was ordered to pay a $15,000 fine.
