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

2004 and 2006 – all without the required State Department export licenses. The information also
alleged that Academi possessed automatic weapons without registration or permission and that it
falsely represented to the ATF that five firearms were owned by certain individuals, when the
weapons had been given as a gift to the King of Jordan and his traveling entourage in June 2005.
This case was investigated by the FBI, IRS, ATF, DCIS and ICE.
Sensitive Military Encryption Technology to China – On July 31, 2012, Chi Tong Kuok, a
resident of Macau, China, pleaded guilty in the Southern District of California to one count of
conspiracy to illegally export defense articles and to smuggle goods from the United States.
According to the guilty plea, Kuok and others conspired to purchase and export from the United
States defense articles, including communication, precision location and cryptographic
equipment, without a license from the State Department. Kuok also caused $1,700 to be sent to
the United States for the purchase and unlicensed export of a KG-175 Taclane Encryptor.
According to court documents, the KG-175 Taclane Encryptor was developed by General
Dynamics under a contract with the National Security Agency for use by the U.S. military to
encrypt Internet Protocol communications. Kuok was first arrested on June 17, 2009 in Atlanta,
Ga., after he arrived from Paris to catch a connecting flight to Panama in order to meet with
undercover federal agents to take possession of controlled U.S. technology. A criminal complaint
was filed on June 23, 2009 and an indictment returned on July 7, 2009. On May 11, 2010, Kuok
was convicted at trial of conspiracy to export defense articles without a license and to smuggle
goods to Macau and Hong Kong, China; smuggling goods; attempting to export defense articles
without a license; and money laundering. On Sept. 13, 2012, Kuok was sentenced to 96 months
in prison. Kuok appealed and in January 2012, the 9 th U.S. Circuit Court of Appeals vacated
Kuok’s convictions on counts three and four and remanded to the district court for a new trial on
counts one and two. The appeals court ruled that Kuok should have been allowed to put on a
defense that he was forced into trying to procure the equipment by the Chinese government.
Kuok pleaded guilty before the second trial. This investigation was conducted by ICE and DCIS.
Military Gyroscopes to China – On July 30, 2012, Kevin Zhang, aka Zhao Wei Zhang, was
arrested as he attempted to enter the United States from Canada at a port of entry in Washington
state. Zhang had been charged on Jan. 14, 2011 in a sealed indictment in the Southern District of
California with one count of conspiracy to export defense articles (specifically G-200
Dynamically Tuned Gyroscopes) from the United States to China without a license or approval
from the State Department. According to the indictment, these particular gyroscopes may be used
in tactical missile guidance and unmanned aircraft systems. Zhang allegedly instructed
individuals in the U.S. to obtain and export defense articles, including the gyroscopes, to China
and allegedly sought to use a courier to smuggle the gyroscopes out of the U.S. The indictment
alleges that Zhang, acting on behalf of a client in China, sought to purchase three gyroscopes for
$21,000 from an individual in the United States as a prelude to future purchases of gyroscopes.
This investigation was conducted by ICE.
TOW Missile Components to Iran – On July 26, 2012, Andro Telemi, a naturalized U.S. citizen
from Iran who resided in California, pleaded guilty in the Northern District of Illinois to one
count of attempting to illegally export defense articles in connection with his efforts to export
TOW and TOW2 missile components to Iran. He was later sentenced on Nov. 30, 2012 to five
years probation with 6 months home confinement and electronic monitoring and a $10,000 fine.
Telemi was indicted in December 2009, along with Davoud Baniameri, an Iranian citizen and
who lived in Woodland Hills, Calif. A superseding indictment returned in July 2010 charged
Telemi, Baniameri and Syed Majid Mousavi, an Iranian citizen living in Iran. According to court
documents, sometime before Oct. 2008, Mousavi, based in Iran, contacted Baniameri in
California and requested that he purchase Marconi radio test sets for illegal export from the
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