LOUISVILLE, Ky. — Three people have been arrested following a joint investigation by Homeland Safety Investigations (HSI) workplaces in Louisville, San Diego and San Francisco after a federal indictment was unsealed within the U.S. District Courtroom within the Western District of Kentucky.
In keeping with court docket paperwork, Phil Pascoe, 60, of Floyds Knobs, Indiana; Monica Pascoe, 45, of Floyds Knobs, Indiana; Scott Tubbs, 59, of Georgetown, Kentucky; and Quadrant Magnetics LLC have been charged with wire fraud, violations of the Arms Export Management Act and smuggling of products for his or her roles in an unlawful scheme to ship export-controlled defense-related technical knowledge to China and to unlawfully provide the U.S. Division of Protection with Chinese language-origin uncommon earth magnets for aviation methods and navy gadgets.
“The HSI Counter-Proliferation Investigations Program is liable for the enforcement of U.S. import and export legal guidelines involving navy and defense-related merchandise and delicate dual-use expertise,” stated appearing Particular Agent in Cost Nick Nelson, HSI Nashville. “The indictment is a credit score to the collaboration of a number of regulation enforcement companions, together with our particular brokers in HSI San Diego, San Francisco and Louisville, Kentucky, in addition to the advanced investigative work concerned in defending the tried theft of our nation’s navy property and delicate managed expertise.”
The indictment alleges that between January 2012 and December 2018, the defendants conspired to ship roughly 70 drawings containing export-controlled technical knowledge to an organization situated in China with out a license from the U.S. authorities in violation of the Arms Export Management Act and the Worldwide Site visitors in Arms Rules. The technical knowledge drawings have been the property of two U.S. corporations and associated to end-use gadgets for aviation, submarine, radar, tank, mortars, missiles, infrared and thermal imaging concentrating on methods, and hearth management methods for DOD.
The indictment additional alleges that Quadrant Magnetics imported uncommon earth magnets that have been smelted and magnetized by an organization in China. Quadrant then bought these magnets to 2 U.S. corporations that included them in elements bought to the DOD to be used in F-16 Combating Falcon and F/A-18 Hornet plane, in addition to different protection property in violation of the Protection Acquisition Rules System. Underneath the DFARS specialty steel clause, uncommon earth magnets bought to the DOD have to be produced and magnetized in the USA or an authorised nation. China just isn’t an authorised nation.
Arraignments will probably be scheduled earlier than a U.S. Justice of the Peace Decide within the U.S. District Courtroom for the Western District of Kentucky. If convicted, Phil Pascoe, Monica Pascoe and Scott Tubbs face statutory most penalties of as much as 20 years in jail for every depend of wire fraud; 20 years in jail for every depend of exporting technical knowledge with out a license; and 10 years in jail for smuggling items from the USA. Monica Pascoe and her codefendants face a penalty of as much as 5 years for conspiracy to defraud the USA. A federal district court docket choose will decide their sentences after contemplating the U.S. Federal Sentencing Pointers and different statutory components.
Assistant Legal professional Normal Matthew G. Olsen of the Justice Division’s Nationwide Safety Division, U.S. Legal professional Michael A. Bennett for the Western District of Kentucky, Assistant Director Alan E. Kohler Jr. of the FBI Counterintelligence Division and Particular Agent in Cost Jodi Cohen of the FBI Louisville Discipline Workplace made the announcement.
The Protection Felony Investigative Service, FBI, IRS-Felony Investigation, the Naval Felony Investigative Service, and the Division of Power’s Workplace of Inspector Normal are additionally investigating the case.
Assistant U.S. Attorneys Joshua Judd and Christopher Tieke for the Western District of Kentucky and Trial Attorneys David Recker and Liz Abraham with the Nationwide Safety Division’s Counterintelligence and Export Management Part are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed harmless till confirmed responsible past an inexpensive doubt in a court docket of regulation.