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Spy Factory executives plead guilty to selling illegal bugs

March 11, 1997

NEW YORK (AP) _ The nation’s biggest chain of spy shops was forced to shut its doors Monday as two of its executives pleaded guilty to charges that the company illegally imported eavesdropping devices.

The 11 stores across the country that remained open during the trial were to be padlocked by the end of the day under the plea agreements, U.S. Attorney Mary Jo White said.

The San Antonio, Texas-based company sold transmitters _ disguised in ballpoint pens, calculators and electrical plugs _ and smuggled the bugs past the Customs Service so the Spy Factory could sell them to anyone, rather than law enforcement officers who were entitled to buy them, prosecutors said.

The pleas delivered a ``crushing blow″ to the eavesdropping industry, and the stores’ closing represented a resounding victory ``for the American people and their right to privacy,″ White said.

As part of plea agreements, which resulted in the dropping of most of the charges, Spy Factory owner Ronald Kimball agreed to turn over all the company’s assets to the government and close the stores.

``I accept full responsibility for my conduct,″ Kimball told U.S. District Judge Sonia Sotomayor.

The company smuggled bugs into the country by arranging for Japanese suppliers to alter invoices so shipments worth as much as $10,000 would be marked so that they appeared to be worth less than $1,000. Shipments worth less than $1,000 are not required to be checked.

Kimball and Spy Factory General Manager Marlin Richardson pleaded guilty to conspiracy, possession and sale of wiretap devices and possession and sale of smuggled wiretap devices, charges that carry a maximum sentence of 15 years in prison and $750,000 in fines.

Spy Factory employee Tracy Edward Ford pleaded guilty to possessing and selling bugging and wiretapping devices, charges that carry a maximum sentence of 10 years in prison and $500,000 in fines.

Prosecutors said federal sentencing guidelines make it likely that Kimball and Richardson will serve five-year prison terms while Ford would be in prison for six months.

Sentencing was set for July 1.

While the company did not have a store in New York, the trial was held here because the investigation was led by Customs agents and prosecutors in New York.

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