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Five Arrested In Conspiracy To Ship Parts To Iran

July 16, 1985

SAN DIEGO (AP) _ Arms smugglers who gained access to the U.S. military’s computerized supply system were ″thieves and opportunists″ only interested in making money by selling spare parts to Iran, federal officials said.

According to government affidavits released Monday, ring members obtained an undetermined number of weapons by tapping into the supply system, ordering parts, then sending them overseas.

″It’s not a simple thing to sort out,″ Winston C. Kuehl, regional director for the Naval Investigative Service, said at a press conference announcing the arrests.

″From the standpoint of their system, it was fairly sophisticated,″ Kuehl said, describing the defendants as ″thieves and opportunists.″

Kuehl said an investigation has turned up no evidence that national security was compromised by the alleged ring.

In Washington, FBI Director William Webster said the investigation is continuing and would include interviews with active duty and retired Navy personnel.

Filipino businessman Franklin Pangilinan Agustin, 47, Pedro Manansala Quito, 60, and Primitivo Baluyat Cayabyab, 36, were arraigned and ordered held without bond by U.S. Magistrate Roger Curtis McKee. A detention hearing was scheduled for Thursday, where bond for the three will be considered.

Edgardo Pangilinan Agustin, 45, a businessman living in Jamaica, New York, also was arrested but it was not known whether he had been arraigned. The two Agustins are brothers.

The fifth man, an Iranian national, was arrested in Middlesex, England by British Customs inspectors, but his name was not released. He is being held without bond in London.

The specific charges included in Monday’s bill of information were conspiracy, theft and interstate transportation of stolen property, exportation of war materials and defense articles and false declarations.

″What we have is a bunch of thieves that figured out a system and worked that system. ... The motivation was money,″ said Quintin Villanueva, Pacific regional commissioner for the U.S. Customs Service.

Cayabyab, an aviation storekeeper on the USS Kitty Hawk, and Quito, a civilian warehouse worker assigned to the Fleet Avionics Logistics Support Center in San Diego, were specifically implicated in stealing the parts, according to affidavits filed in the case.

The investigation began in December by the FBI, the Naval Investigative Service and the Customs Service after a tip was received about the smuggling in 1982. Officials said they didn’t know how long the ring had operated or exactly how Naval supply inventories were bypassed.

He said that during the course of the investigation, which included wiretaps, the Navy allowed several non-essential F-14 parts to be smuggled out of the country. Kuehl said he didn’t know how many parts had made it to Iran via the smuggling ring.

Military equipment sales to Iran from the United States have been banned since the Ayatollah Ruhollas Khomeini took over the country six years ago. Iran had received F-14′s prior to that time.

Two fictitious companies were set up to move the stolen goods, Pierre Walter Ltd., and Ward International. The parts were boxed and labeled as medical supplies and auto parts, said Gary Penrith, agent in charge of the FBI in San Diego.

Among the dozen boxes and two dozen parts intercepted since December 1984 were sophisticated combat weaponry, some of which was valued at more than $50,000 apiece.

The parts were traced to Naval Air Rework facilities in California, Virginia and the Phillipines as well as to two West Coast-based aircraft carriers, the USS Carl Vinson, homeported near San Francisco, and the USS Ranger, homeported in San Diego.

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