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| Caribbean-Latin America |
| Mesa aviation executive indicted on arms charges |
| 2010-10-30 |
| A Mesa aviation executive has been indicted on charges of illegally exporting engines and aircraft parts to Venezuela. The two-count indictment alleges that Floyd Stilwell, Marsh Aviation Co. and others violated the Arms Export Control Act and engaged in a conspiracy in the export of T-76 engines designed for the OV-10 Bronco, a light armed reconnaissance aircraft suited for counterinsurgency missions. Marsh Aviation reconditions aging airplane engines and converted World War II aircraft into firefighting air tankers for the government. The engines that were reportedly sold are listed on the United States Munitions List, and their export is illegal without a license or written authorization from the State Department, according to the indictment, which was announced this week by federal prosecutors. According to the in- dictment, Stilwell received $1.8 million in the deal. The indictment also accuses Stilwell and Marsh Aviation of furnishing assistance to members of the Venezuelan air force in the assembly, testing, repair, maintenance, modification, operation and use of the T-76 military aircraft engine, without the required license or written authorization from the State Department. Stilwell and Marsh Aviation were ordered to appear in federal court at an unspecified date. As part of the alleged scheme, Stilwell changed the contract to reflect that the engines were the civilian versions of the T-76 and caused "materially false, misleading and incomplete information" to be placed on shipping documents, according to the indictment. A conviction for a violation of the Arms Export Control Act carries a maximum penalty of 10 years, a $250,000 fine, or both. A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine, or both. An investigation that preceded the indictment was conducted by the FBI, U.S. Immigration and Customs Enforcement and the U.S. Department of Defense Criminal Investigation Service. Marsh Aviation, which is based at Falcon Field Airport in northeast Mesa, filed for Chapter 11 bankruptcy in 2009 to protect it from creditors as it seeks to reorganize. |
| Posted by: Anonymoose |
| #5 Unbelievable and messy. I have seen it before with the FBO/service centers. They don't enter in the FMS arena and then a deal pops up and they have no idea they are in violation or even where to look. I know this guy and the report is not entirely true. The OV 10 overhauls he does were all for the US fire dept and as an ag sprayer in the US. So even though it was an OV 10 it was domestic. Most of these little guys have no idea. I have, unfortunately, suffered the trade compliance world way too much. From FMS/FMF to commercial aircraft sales and support to operational 135 carriers in odd locations. The point of the tech manual was a real issue. If you have an ITAR controlled aircraft and you fly it to UAE and need to work on it, the technical manual is ITAR and needs the license. It is just crazy. |
| Posted by: 49 Pan 2010-10-30 23:26 |
| #4 49 Pan, didn't mean to imply that the rules can't be a pain, only that selling hardware on the munitions list to Chavez's Venezuela is a pretty clear-cut violation. I have worked foreign military sales since 1975 and they tend to be pretty clear cut. The direct commercial sales world is a lot murkier. Some of it is controlled by the State Department and some by the Department of Commerce. The dual-use stuff is tricky. I am surprised that sending tech data to your own guys for your own use is a violation. |
| Posted by: rwv 2010-10-30 20:05 |
| #3 I guess in my 27 years of experience I am still too stupid to understand the rules. The only thing I know for sure, small business or not, ya gotta hire export compliance attorneys. Found out yesterday that my emailing instructions to a US crew chief to fix our US aircraft (track and balance procedures) is a violation. For a civil aircraft/ cat dual use. |
| Posted by: 49 Pan 2010-10-30 19:08 |
| #2 The International Traffic in Arms Regulation is pretty easy to understand if you have been in the business any length of time. The part that is easiest to understand is the "Country Policies and Embargoes" section. It is a fundamental part of the law. Usually when people try to get around the law, they are selling to China or North Korea, but Venezuela is also on the embargoed list and has been for the last four years. (http://pmddtc.state.gov/embargoed_countries/index.html) There is no legal way to sell anything that is on the munitions list to Venezuela. OV-10 engines are obviously on the munitions list. This guy is either a crook or too stupid to be in the business. I suspect that he thought he was being very clever and was being paid a premium price for circumventing US law. |
| Posted by: rwv 2010-10-30 17:58 |
| #1 Arms control export violations like this sound drastic but the reality is that the laws are so complicated most small businesses that do any business outside the US operates in violation of the law. Most businesses just don't realize how they are breaking the laws. For example, your WWII airplane breaks down at the Paris air show. You need a new prop. You get the local FBO to help you remove it. You wife sends you the new one while your removing the bad one. You box it up and send it home for repair. Your good to go before the show is over. OK, first I hope you got State Dept approval,ITAR, for exporting a weapons system, to include all the radios and dynamic components, ie the airplane is concidered a weapons system. Allowing the French to help you work on it is a crime, allowing the French to make the box is a crime-not kidding, shipping the new prop before the old one reached the US is a crime, and flying or shipping the aircraft back into the US is another crime if you did not get an export license. Oh and the list of crimes the wife committed emailing the maintenance procedures can actually be the biggest crime. All with a ten year senence. |
| Posted by: 49 Pan 2010-10-30 11:41 |