U.S. v. Electrodyne Systems Corp.
| Decision Date | 12 August 1998 |
| Docket Number | Criminal No. 96-127(AJL). |
| Parties | UNITED STATES of America, v. ELECTRODYNE SYSTEMS CORP., Dennis Nathan and Victor Aron Lander, Defendants. |
| Court | U.S. District Court — District of New Jersey |
Faith S. Hochberg, United States Attorney, Noel L. Hillman, Asst. U.S.Atty., Office of the United States Attorney, Newark, NJ, for plaintiff U.S.
Lawrence S. Lustberg, Gibbons, Del Deo, Dolan, Griffinger & Vecchione, Newark, NJ, for defendant Victor Aron Lander.
Michael Critchley, West Orange, NJ, for defendant Dennis Nathan.
J. Barry Cocoziello, Newark, NJ, for defendant Electrodyne Systems Corp.
On 4 March 1996, a United States Grand Jury for the District of New Jersey (the "Grand Jury") returned a thirteen count, thirty-eight page indictment (the "Indictment") against Electrodyne Systems Corporation ("Electrodyne"), Dennis Nathan ("Nathan") and Victor Aron Lander ("Lander") (collectively, the "Defendants").1 The Indictment charges the Individual Defendants and Electrodyne with conspiracy to commit offenses against the United States, 18 U.S.C. § 371 ("Section 371"), violations of the Arms Export Control Act (the "AECA"), 22 U.S.C. § 2778(b)(2) ("Section 2778(b)(2)") and (c) ("Section 2778(c)"), the International Traffic in Arms Regulations ("ITAR"), 22 C.F.R. §§ 127.1 and 127.3, unlawful importation of goods into the United States, 18 U.S.C. §§ 545 ("Section 545") and 2 ("Section 2"), and making false statements, 18 U.S.C. § 1001 ("Section 1001") and Section 2.
This opinion addresses the sentencing of the Individual Defendants and the resentencing of Electrodyne.2
Electrodyne was a New Jersey corporation formed in 1986 to specialize in providing military components, as a prime contractor, to the United States. See Letter, dated 30 September 1997, and included memorandum from Office of the General Counsel, Department of the Navy (the "30 September 1997 Letter") attached as Exhibit C to Sentencing Memorandum submitted by the Government, dated 5 August 1998, (the "Government Sentencing Memorandum"). Electrodyne manufactured, sold, imported and exported microwave components and electronic power conversion equipment for military application in advanced communications and radar systems in aircraft, warships, satellites, tanks and ground forces defense systems. See id. at 3-4. Electrodyne held numerous contracts to provide these electronic components, including some manufactured using classified information, to a number of Government agencies. See id. at 4. Its customers included the National Aeronautics and Space Administration ("NASA"), the United States Air Force ("Air Force") and the United States Navy ("Navy"), which included the Naval Research Laboratory ("NRL"). See id.
At all times relevant to this action, Nathan was President and Vice-President of Electrodyne. See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4. At certain times relevant to this action, Nathan was also the designated security officer for Electrodyne. See id.
At all times relevant to this action, Lander was Director of Marketing of Electrodyne. See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4. Before Lander emigrated to the United States in 1976, he assisted the military of the former Soviet Union in developing electronic warfare systems. See id.
As will be discussed infra in more detail, the Indictment describes the AECA3 and ITAR, which authorize the United States State Department's Office of Defense Trade Controls ("ODTC") to establish and maintain the United States Munitions List (the "Munitions List"). See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4; 22 C.F.R. § 121.1. The Munitions List is a catalog of designated "defense articles" subject to export restrictions. See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4; 22 C.F.R. § 121.1. Anyone wishing to export from the United States a defense article on the Munitions List must first obtain a license from the ODTC. See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4; 22 C.F.R. § 121.1. Included on the Munitions List are certain electronic components designed and manufactured for use by the military for advances communications and radar systems in aircraft, warships, satellites, tanks and ground forces defense systems. See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4; 22 C.F.R. § 121.1.
The ODTC also regulates the export of "defense services."4 See 30 September 1997 Letter attached as Exh. C to Government Sentencing Memorandum at 4. As part of the limitations on providing defense services pursuant to ITAR, an individual in the United States may not contract with a foreign person to build an item on the Munitions List outside of the United States without first obtaining a license under the AECA. See id.
The Indictment charges that from on or about 6 November 1989 to on or about 10 March 1994, Electrodyne entered into six contracts to provide agencies of the United States Government with electronic components for use in research, communications, radar and weapon systems. See 30 September 1997 attached as Exh. C to Government Sentencing Memorandum at 4. In order to facilitate the building of the military components contracted for, and contrary to the express terms of the contracts, and in some cases Department of Defense directives, Electrodyne, Nathan and Lander disclosed to foreign manufacturers the drawings, technology and specifications for United States military components. See id. Electrodyne, Nathan and Lander also provided the engineering and scientific assistance necessary to build these components. See id. The Indictment charges these acts were, inter alia, in violation of the AECA, ITAR and the Buy American Act.5
On 26 August 1996, Electrodyne entered into a written plea agreement (the "Electrodyne Plea Agreement") with the Government. See Electrodyne Plea Agreement. Electrodyne agreed to plead guilty to Count Two of the Indictment which charged Electrodyne with impermissibly exporting defense related items in violation of Sections 2778(b)(2) and (c) and Section 2. See id. Electrodyne also agreed to plead guilty to Count Ten of the Indictment which charged Electrodyne with making a false statement in violation of Section 1001 and Section 2. See id.
On or about 16 October 1996, Electrodyne pleaded guilty (the "Electrodyne Plea Hearing"), pursuant to the Electrodyne Plea Agreement, to Counts Two and Ten of the Indictment. See Transcript from Electrodyne Plea Hearing at 25. On 27 May 1997, Electrodyne was sentenced; a fine of $500,000 on each of Counts Two and Ten was imposed. See Transcript from Electrodyne Sentencing at 10-11. This fine was then due and payable. See id. at 11. Restitution of $369,105.70 was also ordered.6 See id. at 4-7.
The Electrodyne sentence was enhanced pursuant to U.S.S.G. § 8C2.5(b)(4) ("Section 8C2.5(b)(4)") because Electrodyne employed fifty or more employees. See Transcript from Electrodyne Sentencing at 2-3. The base offense level was also increased by nine points pursuant to Section 2F1.1 based upon a calculation of loss equal to the amount of restitution.
On 22 August 1996, Lander entered into a plea agreement (the "Lander Plea Agreement") with the Government. See Lander Plea Agreement. Lander agreed to plead guilty to a one count Information (the "Information") which charged him with the unlawful introduction of merchandise into the commerce of the United States in violation of 18 U.S.C. § 542 ("Section 542")7 and Section 2.8
On 25 September 1996, Nathan entered into a plea agreement (the "Nathan Plea Agreement") with the Government. See Nathan Plea Agreement. Nathan agreed to plead guilty to Count Twelve of the Indictment, which charged him with knowingly importing merchandise into the United States contrary to law and with the intent to defraud the United States, in violation of Sections 5459 and 2. See id.
On 16 October 1996, a plea hearing (the "Nathan Plea Hearing") was held regarding the Nathan Plea Agreement pursuant to Rule 11 ("Rule 11") of the Federal Rules of Criminal Procedure. Nathan affirmatively responded when asked if he was aware that his guilty plea would expose him to a maximum sentence of imprisonment of up to five years. See Transcript from Nathan Plea Hearing at 11. Nathan also acknowledged his guilty plea would subject him to a statutory maximum fine of the greatest of $250,000, or twice the gross amount of any pecuniary gain derived from the offense or twice the gross amount of any pecuniary loss suffered by a victim of the offense. See id. At the conclusion of the Nathan Plea Hearing, the plea of guilty offered by Nathan was accepted and he was found guilty of violating Sections 545 and 2. See id. at 21-22.
On 31 October 1996, a plea hearing (the "Lander Plea Hearing") was held regarding the Lander Plea Agreement pursuant to Rule 11. Lander affirmatively responded when asked if he was aware that his guilty plea would expose him to a maximum sentence of imprisonment of up to two years. See Transcript from Lander Plea Hearing at 12. Lander also acknowledged his guilty plea would subject him to a statutory maximum fine of the greatest of $250,000, or twice the gross amount of any pecuniary gain derived from the offense or twice the gross amount of any pecuniary loss suffered by a victim of the offense. See id. At the conclusion of the Lander Plea Hearing, the plea of guilty offered by Lander was accepted and he was found guilty of violating Sections 542 and 2. See id. at 22-23.
After the pleas of the Individual Defendants were accepted, the Probation Department ("Probation") conducted presentence investigations for...
To continue reading
Request your trial
-
U.S. v. Nathan
...Lander had shared with the Ukraine and Russia information that was "not generally known," see United States v. Electrodyne Sys. Corp., 28 F. Supp. 2d 213, 268 (D.N.J. 1998) (Electrodyne II), the Court repeatedly stated that the defendants' conduct threatened national security and the safety......