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Japanese Defense Contractor Pays Fine for Illegal Exports to Iran

March 11, 1992

WASHINGTON (AP) _ A Japanese defense contractor pleaded guilty to criminal charges today and paid a $10 million fine for illegally exporting U.S. military technology to Iran.

The fine paid by Japan Aviation Electronics was the largest ever imposed in an export violation case, prosecutors said.

The company also has agreed to pay $5 million in administrative penalties to the State Department and accept a one-year ban on exporting military equipment to any customer other than the Japanese government.

The company admitted selling F-4 Phantom fighter jet components in 1986 while knowing they would be illegally exported from Japan to Iran.

Still facing charges in the case are Aero Systems Inc. of Miami; a Miami subsidiary, Aero Systems Aviation Corp.; and two Aero subsidiaries in Hong Kong and Singapore. Also charged were two former Aero employees and three employees of JAE.

JAE pleaded guilty to 10 violations of the Arms Export Control Act. The company admitted selling fighter aircraft navigational components, including 127 gyroscopes and one accelerometer between February and September 1986, during the Iran-Iraq war.

According to prosecutors, the equipment went from JAE to Aero Systems’ Hong Kong and Singapore subsidiaries and then on to front companies for the Iranian military.

″This ends an unfortunate chapter in JAE history and enables the company to get back to business,″ said the company’s attorney, Ron Liebman. ″JAE admitted what happened, investigated what had gone wrong and corrected it.″

The company had faced criminal fines of up to $22 million. It also accepted a one-year Commerce Department ban on exporting non-military items that require an individual license.

One of the defendants, Colin Devellerez, former senior vice president of Aero Systems Aviation Corp., is free on bond while the other four defendants have not been arrested, said U.S. Attorney Jay Stephens’ office.

They are former Aero Systems Aviation Corp. vice president and sales agent Wayne Waterson and JAE employees Hironobu Takahashi, Toshiyuki Murakoshi and Tsutomu Iida.

Iran has been barred from buying U.S. arms since January 1984. However, the Reagan White House secretly sold arms to that country in 1985 and 1986 in transactions that led to the Iran-Contra scandal.

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