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Defense manufacturing company fined $1 million

May 27, 1997

NEWARK, N.J. (AP) _ A New Jersey company that acknowledged it illegally gave plans for sensitive U.S. military technology to subcontractors in Russia and Ukraine was fined $1 million on Tuesday.

Calling the conduct of Electrodyne Systems Corp. ``outrageous,″ U.S. District Judge Alfred J. Lechner Jr. also ordered it to pay $390,000 in restitution and other costs to the U.S. government.

The South Hackensack company also remains barred from doing any government contracting, said Assistant U.S. Attorney Noel L. Hillman, who prosecuted the case.

The Defense Department is still assessing whether Electrodyne’s actions have compromised national security, Hillman said.

Company lawyer J. Barry Cocoziello said no damage was done because none of the parts were classified, asserting the case carries ``vestiges of the Cold War.″

Two top Electrodyne officials also pleaded guilty in the case and are to be sentenced July 28. As part of its plea bargain, the company has severed ties with the pair.

The fine far exceeded the $140,000 figure that Electrodyne and government prosecutors reached in the company’s plea bargain, which was not binding on Lechner.

``I know that Electrodyne does not have the ability to pay that fine″ without liquidating assets, Cocoziello said. He said he is recommending the company appeal the fine.

In October, Electrodyne president Dennis Nathan and marketing director Victor Lander pleaded guilty to supplying U.S. forces with goods made in Ukraine instead of in the United States, as required.

Electrodyne won six contracts, worth just over $2 million, from 1989 to 1994, to manufacture a variety of electronic components for the Air Force and Navy. Under the U.S. Arms Export Control Act, the devices could be made only in the United States.

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