Cuban Sales Saga Finally Ends for Pennsylvania Executive
The long-running saga over the illegal sale of water purification resins to Cuba has finally come to an end. Stefan E. Brodie, president of Bala Cynwyd, Pennsylvania-based of Bro-Tech Corp., which trades under the name "The Purolite Company" pleaded guilty on Friday for engaging in illegal trade with Cuba. Under the plea agreement, Brodie plead guilty to a single charge relating to the payment of travel expenses for Bro-Tech's sales manager to travel to Cuba in the mid-1990s. Brodie was fined $10,000 and sentenced to one year of probation.
Brodie's plea agreement brought to an end a lengthy and convoluted case that began in October 2000 when the U.S. Attorney for the Eastern District of Pennsylvania indicted Bro-Tech Corp. of making illegal sales of ion exchange resins to Cuba. Ion exchange resins are used for water and waste water treatment. Also indicted at that time were Stefan Brodie, the company's co-owner, president and CEO, Stefan's brother Don Brodie, the company's co-owner and executive vice-president and James Sabzali, a Canadian citizen and the company's sales manager and director of marketing. The company and individuals were indicted on one count of conspiracy to violate the provisions of the Trading with the Enemy Act of 1917 ("TWEA") and the Cuban Assets Control Regulations ("CACRs") and 75 counts of substantive violations of TWEA and the CACRs.See Forbidden Trade, The U.S. Hard Line on Exports to Cuba (The Export Practitioner Nov. 2002).
The indictments alleged that during much of the 1990s, Bro-Tech sold ion exchange resins to Cuba through intermediary companies in Canada, Mexico and Europe. The indictment also alleged that several U.S. based employees of Bro-Tech were aware of and facilitated such sales and that several Canadian Bro-Tech employees, including James Sabzali, were reimbursed for their business-related travel to
The jury agreed with much of the government's case and convicted Bro-Tech of 45 counts of violating TWEA, Sabzali of 21 counts, Donald Brodie of 34 counts and Stefan Brodie of one count of conspiracy to violate TWEA. Sabzali's convictions were on counts relating to his role in certain sales to
As detailed in New Trials Ordered for Defendants Convicted for Illegal Sales to Cuba (The Export Practitioner August 2003), the trial judge granted all four defendants a new trial on the ground that the government had made certain improper and inflammatory comments and argument during its opening and closing statements which prejudiced the jury. The U.S. Government subsequently entered into a plea bargain with three of the defendants. Don Brodie pleaded guilty to one count of the indictment (involving his approval of expenditures in the amount of $4,187 for Mr. Sabzali's Cuba-related travel) and was sentenced to one year probation and fined $10,000. The Bro-Tech Corporation also pleaded guilty to one count, and was fined $250,000. Mr. Sabzali pleaded guilty to a superceding information charging a violation of 18 U.S.C. section 2 (aiding and abetting) and 18 U.S.C. section 545 (smuggling goods into the United States), and was sentenced to one year probation and fined $10,000.
Meanwhile, the U.S. government appealed the trial judge's decision to grant Stefan Brodie's motion for judgment of acquittal to the U.S. Court of Appeals for the Third Circuit. After reviewing the evidence presented during the trial in detail, in April 2005 the Third Circuit reinstated Stefan Brodie's conviction. Among other things, the Third Circuit stated in its opinion that "we are satisfied that a reasonable jury could conclude beyond a reasonable doubt that [Brodie] had actual knowledge of the law violated, the facts constituting the offense and the illicit purpose of the conspiracy" and that the evidence presented during the trial "paint[ed] a convincing picture of [Brodie] as a company president who deliberately stuck his head in the sand regarding the involvement of the U.S. entity in the prohibited transactions."
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