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Five Americans Indicted For Allegedly Selling Aircraft To Libya

July 24, 1986

ATLANTA (AP) _ Five Americans and two Libyans were indicted in a $50 million plot to lease two Lockheed transport planes to Libya, the largest illegal shipment to Col. Moammar Gadhafi’s government ever uncovered, federal officials said Wednesday.

Although there was no direct evidence Gadhafi was involved, the chief of Libyan armed forces, Gen. Abu Bakr Younes Jaber, was named as an unindicted co-conspirator, said acting U.S. Attorney Steve Cowen.

When the diversion of the two planes to Libya was discovered, Cowen said, the seven defendants were in negotiations with Lockheed-Georgia to buy two additional planes for $60 million.

Neither Lockheed-Georgia Co., which made the planes, nor any of its employees were charged in the case, although Cowen said his office looked into the activities of the suburban Atlanta aircraft manufacturer.

Commerce Department officials are investigating whether civil sanctions should be sought against parties involved in the sale, including Lockheed- Georgi a, said Donald Creed, a Commerce spokesman in Washington.

″It’s the largest diversion of military equipment ever discovered to Libya,″ said Steve Hooper, the agent in charge of the Atlanta office of the U.S. Customs Service.

President Reagan in February invoked a total embargo of American goods to the northern African nation. For several years, U.S. policy has forbidden the delivery of American aircraft or military equipment to Libya.

The seven indicted Tuesday are accused of purchasing two L-100-30 four- engine propjets, the civilian equivalent of the C-130 military transport plane, and telling Lockheed, the Department of Commerce and the Customs Service that the planes were to be used in the west African nation of Benin for oil exploration.

Instead, the indictment said, the men planned to lease the planes to Contrust, a West German company operated by the Libyan defendants, for use in Libya. They were to be converted to KC-130s, a military tanker plane used for mid-air refueling, the indictment said.

Indicted by a federal grand jury Tuesday were Edward J. Elkins, David E. Baskett and Thomas J. Burnham, all of Santa Maria, Calif.; Franklin D.R. Corcoran of Pismo Beach, Calif.; Carl D. Lilly of Visalia, Calif., and Abdulraheem M. Badir and Abdurrahmen M. Badi, both Libyan nationals.

The indictment also named five companies: Armoflex Inc., AFI International Ltd. and Quicksilver Systems, all operated by the California residents, and Top Technologie (Gesellschaft Fur Oelproduktionen, GmbH) and Contrust (Vermogensverwaltungs, GmbH), both German companies operated by the Libyans.

Each defendant is charged with conspiracy to violate the Export Administration Act, two counts of violating the Commodity Control List, one count of making fraudulent statements to the U.S. Customs Service, one count of attempting to defraud the federal government of the right to implement its foreign policy and two counts of interstate wire communication violations.

If convicted of all counts, each of the individual defendants faces up to 35 years in prison. The companies would face fines of as much as $500,000 or twice the gross gain realized on the sales, Cowen said.

Elkins, Baskett and Burnham were expected to surrender Thursday to federal authorities in Atlanta. Corcoran was arrested Tuesday in California and was being held Wednesday at the federal prison at Terminal Island, in the Los Angeles harbor, in lieu of $1 million cash bond, prison spokesman Mike Benov said. Lilly was arrested Tuesday in Hawaii and in a hearing Wednesday waived extradition and was ordered returned to Atlanta.

The Libyans are believed to be in Europe, and U.S. officials will seek to extradite them, the prosecutor said.

A statement by Lockheed-Georgia said the company was alerted ″by a U.S. government source″ that the two aircraft it sold to AFI International may have been seen in Libya. The information was not available until after the sale was completed and Lockheed-Georgia complied with all U.S. regulations in the original sale of the aircraft, said Lockheed spokesman Dick Martin.

Gadhafi’s government paid $42 million for eight C-130 cargo planes in 1972. But in the eroding relationship between Libya and the United States, the State Department denied an export license for the planes.

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