BIS Denies Export Privileges of Parties Involved in Well-Known Triggered Spark Gap Case
The Bureau of Industry and Security (BIS) has issued an order denying the export privileges of Asher Karni, the South African businessman that participated in the scheme to sell oscilloscopes and triggered spark gaps from the U.S. to Pakistan, until August 4, 2015. The order also covers Pakland PME Corporation and Humayun Khan, both of Islamabad Pakistan, both of which participate in the scheme to obtain the oscilloscopes and triggered spark gaps. Pakland and Khan have appeared on BIS's Denied Persons List since early 2005, having been covered by temporary denial orders. The recent denial order extends their inclusion on the Denied Persons List until August 4, 2015.
In this well-known case, Karni, who currently resides in the Federal Correctional Institution at Fort Dix, NJ, pleaded guilty in September 2004 to willfully exporting and attempting to export oscilloscopes and triggered spark gaps from the U.S. to Pakistan via South Africa without having first obtained the required export licenses from the Department of Commerce. On August 4, 2005, Karni was sentenced to three years imprisonment and two years of supervised release following imprisonment. He is scheduled to be released from prison on August 12, 2006.
According to the indictment in this case, Khan was the owner and chief executive officer of an Islamabad, Pakistan, business known as Pakland PME Corporation. In 2002, Khan approached Asher Karni, then residing in Cape Town, South Africa, and inquired whether Karni would help him acquire certain models of oscilloscopes manufactured by Tektronix, Inc., of Beaverton, Oregon. Because these particular models of oscilloscopes have applications in the testing and development of nuclear weapons and missile delivery systems, the Department of Commerce requires anyone seeking to export them to certain countries, including Pakistan, to obtain a license. The indictment claimed that Khan, who was an authorized distributor for Tektronix in Pakistan, was aware of that licensing requirement. Karni was the owner of a firm in Cape Town, South Africa, known as Top-Cape Technology. The indictment claimed that Karni agreed to assist Khan in obtaining the Tektronix oscilloscopes, even though Khan told him that they were subject to U.S. export controls and warned him not to disclose the true destination of the products.
In March 2003, Karni obtained one of the models of controlled oscilloscopes from a firm in Plainview, New York. He directed that the firm send the oscilloscope to Top-Cape in Cape Town, South Africa. Shortly after its arrival in South Africa, Karni re-exported the product to a company in Pakistan that Khan had designated. In August 2003, Karni acquired two additional controlled Tektronix oscilloscopes in the U.S. and diverted them to one of Khan's customers in Pakistan through South Africa. In addition, throughout 2003, Karni and Khan worked to fill a $1.3 million order for controlled Tektronix oscilloscopes for a third Khan client in Pakistan.
In June 2003, Khan sent an e-mail to Karni asking him to purchase triggered spark gaps for a customer in Pakistan. Triggered spark gaps are high speed electrical switches that are often used in a medical device known as a lithotripter, which doctors utilize in treating kidney stones. Triggered spark gaps also have military applications. One such application is as a detonator for nuclear weapons. Exports of triggered spark gaps to South Africa, unlike Pakistan, are not prohibited.
The triggered spark gaps that Khan sought were manufactured by Perkin Elmer Optoelectronics of Salem, Massachusetts ("Perkin Elmer"). At Khan's direction, Karni first made inquiries of Perkin Elmer's French sales representative. The sales representative quoted Karni a price, but also advised him that the spark gaps required a U.S. export license and that Karni needed to certify both that the product would remain in South Africa and that it would not be used for any nuclear purposes. Karni forwarded this information to Khan and initially declined to pursue the order. Khan, however, prevailed upon Karni to continue to find a source for the triggered spark gaps.
In July 2003, an anonymous source informed agents of BIS's Office of Export Enforcement of the and Immigration and Customs Enforcement of the Department of Homeland Security that Karni was in the process of using a broker in Secaucus, New Jersey, to obtain 200 PerkinElmer triggered spark gaps for ultimate shipment to Pakistan through South Africa. The agents approached Perkin Elmer, which agreed to cooperate in the investigation and to render inoperable the triggered spark gaps that the New Jersey broker was in the process of ordering.
In October 2003, the OEE and ICE agents were able to track the first installment of 66 triggered spark gaps as the package traveled from the United States to Top-Cape in South Africa and then on to Pakistan through the United Arab Emirates. On December 11, 2003, OEE and ICE agents searched the offices in New Jersey of the broker that Karni was using to acquire the triggered spark gaps. Simultaneously, in coordination with U.S. authorities, members of the South African Police Service executed a search warrant at Karni's office in Cape Town, South Africa, which led to the seizure of emails and documents that furthered this investigation.
On January 1, 2004, agents arrested Karni as he arrived at Denver International Airport for a family ski trip. On September 14, 2004, he pleded guilty under seal to five federal felonies, including conspiracy to export controlled nuclear technology items to Pakistan. He also agreed to cooperate with the on-going investigation.
For further information on this case, be sure to see PBS's Frontline comprehensive investigation site, which contains interviews with the major players in this case, including Khan, and transcripts of e-mail exchanges between Khan and Karni.
UPDATE: The denial of export privileges for the above-named parties was published in the Federal Register on August 7, 2006.Labels: BIS, Export Controls
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