Major Export Enforcement Cases - Directorate of Defense Trade ...

Firearms to Haiti – On June 5, 2012, Jean Gordy Gedeon, a national of Haiti, pleaded guilty in
the Middle District of Florida to smuggling firearms in connection with his efforts to send
firearms to Haiti. Gedeon arranged with an undercover agent to purchase eleven firearms that he
said he intended to smuggle to Haiti. He was arrested on May 30, 2012 after paying $1,100 to the
undercover agent for four pistols and a machine gun. The case was investigated by ATF.
Pressure Transducers with Nuclear Applications to China and Elsewhere -- On May 22, 2012,
Qiang Hu, aka Johnson Hu, 47, a Chinese national and resident of Shanghai was arrested after he
arrived in Massachusetts for a business meeting. He had been charged in a May 18, 2012
criminal complaint in the District of Massachusetts with conspiracy to illegally export from the
United States to China and elsewhere dual-use pressure transducers in violation of the
International Emergency Economic Powers Act (IEEPA). The complaint was unsealed after his
arrest. The pressure transducers in question, manufactured by MKS Instruments headquartered in
Andover, Mass., are controlled for export by the Commerce Department because they can be used
in gas centrifuges to enrich uranium and produce weapons-grade uranium, according to the
complaint. Specifically, they can be used to measure gas pressure of uranium hexafluoride in
centrifuge cascades. According to the complaint, Hu worked as a sales manager for a subsidiary
of MKS Instruments in Shanghai, where he has been employed since 2008. Hu and his coconspirators
allegedly caused thousands of MKS export-controlled pressure transducers, worth
more than $6.5 million, to be illegally exported from the United States to unauthorized end-users
in China and elsewhere using export licenses fraudulently obtained from the Department of
Commerce. The complaint alleges that Hu and his co-conspirators used two primary means of
deception to export the pressure transducers. First, the conspirators used licenses issued to
legitimate MKS business customers to export the pressure transducers to China, and then caused
the parts to be delivered to other end-users who were not themselves named on the export licenses
or authorized to receive the parts. Second, the conspirators obtained export licenses in the name
of a front company and then used these fraudulently obtained licenses to export the parts to
China, where they were delivered to the actual end-users. MKS is not a target of the federal
investigation into these matters. This investigation was conducted by FBI, ICE, and BIS.
Aircraft Components and Other Materials to Iran – On May 15, 2012, Ulrich Davis, a former
manager of a Netherlands-based freight forwarding company, was sentenced in the District of
New Jersey to six months in prison after pleading guilty on Feb. 6, 2012 to conspiracy to defraud
the United States by facilitating the illegal export of goods to Iran. Davis was first arrested on
Aug. 6, 2011. In October 2007, the Commerce Department issued a Temporary Denial Order
(TDO) denying export privileges to the company of a co-conspirator of Davis. The TDO
prohibited any person, including Davis, from directly or indirectly exporting or re-exporting to or
on behalf of the co-conspirator. The co-conspirator located in another country, purchased U.S.
origin goods from a New Jersey firm for businesses and governmental agencies of Iran. The New
Jersey firm was in the business of reselling chemicals, lubricants, sealants and other products
used in the aircraft industry. As part of the conspiracy, Davis and his coconspirator directed a
New York freight forwarding company to arrange for a trucking company to pick up commodities
from the New Jersey company and transport them to New York on behalf of the coconspirator’s
company. Davis admitted that in November 2007, he completed an air waybill that represented
certain acrylic adhesives and spray paint coatings obtained from a New Jersey company were to
be forwarded on behalf of the co-conspirator’s company to Iran after issuance of the TDO. Davis
acknowledged that at no time was any relief, exception, or other authorization sought from the
TDO. The investigation was conducted by BIS, ICE, and DCIS.
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