Eight men were arrested and charged here today in connection with alleged schemes to sell $2 billion worth of sophisticated weapons to Iran and $15.6 million in machine guns and "executive assassination kits" to the Irish Republican Army.
Federal agents seized 110 machine guns assembled from spare parts in clandestine factories in New Jersey and New York. The $2 billion worth of weapons destined for Iran, including attack helicopters, rocket launchers, missiles, tanks and rifles, were to be purchased from unidentified arms manufacturers and dealers.
The arrests followed an eight-month undercover investigation by federal Bureau of Alcohol, Tobacco and Firearms (BATF) agents and New York City police, part of a nationwide effort to stem what officials acknowledge is a multibillion-dollar business in illegal weapons exports.
Iran, which has been at war with Iraq for three years, is particularly dependent on U.S. weapons and spare parts because the Iranian government under the late shah had purchased some $18.4 billion worth of American arms during the 1970s.
Although the U.S. government banned arms sales to the regime of Ayatollah Ruhollah Khomeini, hundreds of millions of dollars worth of U.S. arms have reportedly been illegally exported, some of the arms allegedly through other countries despite U.S. government prohibitions.
According to a complaint filed in U.S. District Court today, the ringleaders in the case demanded $40 million to bribe government officials in and out of the United States to "grease the wheel" for delivery of the weapons to Iran with falsified State Department documents.
Federal agents, posing as middlemen representing the Iranian government and the IRA, had $10 million in cash transferred from the U.S. Federal Reserve to a safe deposit box at Chase Manhattan Bank. They brought the men in to see the money and filmed the scene with bank surveillance cameras.
At a bail hearing, Assistant U.S. Attorney Federico E. Virella Jr. said an undercover agent had taped Alan G. Harvey, 73, a Haworth, N.J., attorney, boasting that he had access to "a stolen nuclear device."
At a news conference, Assistant Treasury Secretary John M. Walker Jr. said the administration, which has been criticized for being lax in enforcing arms bans, is making an effort to crack down on illegal shipments. He added, "It is obvious that some Third World nations are hungry for armaments, notwithstanding the legal prohibitions . . . , and that some individuals, motivated by greed, seek to exploit this international market."
Walker, accompanied by U.S. Attorney Rudolph W. Giuliani and New York District Attorney Robert M. Morgenthau, said BATF and the Customs Service have investigated more than 300 international arms cases in the last two years.
In making the arrests in today's case, federal agents seized 110 fully automatic 9-mm MAC/10 and .380-caliber MAC/11 machine guns equipped with silencers.
"These are obviously terrorist weapons because of the silencers," Walker said, as agents displayed more than a dozen of the weapons.
Also seized and exhibited was an "executive assassination kit," a black leather attache case altered to conceal a fully loaded MAC/11 machine gun that could be fired with an exterior trigger.
According to the complaint, Harvey and Brooklyn businessman Robert B. Krejcik, 45, agreed to sell 30 of the kits to the federal agents for $10,500 to supply the IRA.
In the alleged Iranian scheme, Harvey, Krejcik, and Abbott Van Backer, 62, a Manhattan businessman who told agents he was a former South African general, were charged with conspiracy to export arms illegally, a charge that carries a maximum penalty of five years in prison and a fine of $10,000.
In the alleged IRA scheme, Harvey and Krejcik, the alleged ringleaders, and five machinists who put the guns together were charged with possession of unregistered firearms and conspiring to supply them to the IRA. The charges carry combined maximum penalties of 15 years in prison and $20,000 in fines.
Bail was set at $1.25 million for Van Backer, $750,000 for Harvey and $350,000 for Krejcik. The machinists, William Moravcik, 57, of Port Washington, N.Y., Oldrich Pastorek, 47, of Rutherford, N.J., Honza Klugar, 58, of Norwood, N.J., Mirek Zavadil, 58, of Jackson Heights, N.Y., and Dennis Mach, 49, of Dover, N.J., were to be released on personal recognizance bonds.