Customs officials intensify efforts against illicit tech exports
Customs officials have intensified efforts to block shipments of controlled military technologies to Iraq and other nations deemed as threats, according to David Conboy, assistant director of strategic investigations at the Bureau of Immigration and Customs Enforcement.
Speaking at the Global Trade Controls conference Tuesday, Conboy said that in the last year, Customs launched about 80 investigations, some initiated by notification from legitimate businesses.
He said that to bring a criminal case against an illicit exporter, officials have to show there was intent to break the law. They must show the exporter knew the law and did something to circumvent it.
Conboy described an undercover sting operation that netted an Iraqi selling military equipment from the United States to Iraq. Fadi Boutros had immigrated from Iraq and established a front company in San Diego. It acted as a procurement agent, reaching out to U.S. companies seeking various technologies, some controlled by the government.
The investigation began after Customs had done a presentation in Connecticut on its Project Shield America, a program to encourage industry assistance in preventing terrorist groups and hostile countries from obtaining U.S.-made weapons of mass destruction and controlled military and dual-use technologies. Dual-use technologies are those that have a commercial and military use. After the presentation, Customs got a phone call from a company that had been contacted for a boiler plant system that the company was able to track to a plant in Iraq bombed in the 1991 war there. Parts can be traced by their serial numbers.
The numbers matched a request for the system that a company based in Jordan had earlier attempted to obtain. The legitimate U.S. firm had refused to sell to the Jordanian company, so the U.S.-based front company gave it a try. "The Iraqis are very active in acquiring U.S. technology," Conboy said.
In its years-long undercover operation in the late 1990s, Customs discovered the front company had a "shopping list" of goods being sought by Iraq, including software for a ballistic missile guidance system and other military items. For instance, the company also sought 20 pairs of the most advanced night vision goggles in the world, made only in the United States at that time.
Customs tapped the company saying it knew it could not get a license to ship the items and that it would get around it. In its order, the company paid $30,000 up front and gave specific instructions on how it would avoid detection. This included requesting labeling the shipment as an "ophthalmoscope," and valuing it at $100, instead of the tens of thousands it was worth. When the exporter showed up to FedEx to make the shipment, he was arrested.
Boutros ultimately was sentenced to 37 months in jail, the maximum possible, and is on the Commerce Department Denied Persons List, which prevents any person from exporting from the United States. Since he had legally immigrated, he remains in the United States.
Conboy said, "Personally, I think the penalties should be higher" for such cases, adding by comparison, a drug shipper could be put away for life.