Four arms dealers were indicted in New York City yesterday for allegedly exporting $8 million worth of night-vision goggles illegally to Argentina during the Falkland Islands war and attempting to export guns, ammunition and night-vision goggles illegally to the Soviet Union, Poland and Iraq.
The 14-count indictment, filed in U.S. District Court in Brooklyn, charged the dealers with racketeering and violating arms export laws, which prohibit sales of military equipment to the Soviet Union, Soviet bloc countries and certain other countries.
Sales of such equipment to Argentina are illegal because of "Congress' concern over human-rights violations" there, according to the indictment. Sales to Iraq are banned because of U.S. neutrality in the Iran-Iraq war, according to David Kirby, deputy chief of the U.S. Attorney's criminal division in New York City.
The indictment represents the first time arms dealers have been charged with racketeering, according to U.S. Attorney Raymond J. Dearie.
In the past, the charge has been used in connection with allegations of organized crime, drug trafficking and bid collusion.
The four each face up to 20 years in prison if convicted. All are affiliated with companies that deal in arms, according to Kirby. The defendants are H. Leonard Berg, 49, of New York City and his firm, HLB Security Electronics Ltd.; Grimm DePanicis, 41, of Mount Dora, Fla., a vice president of HLB; Leon Lisbona, 60, of New York City, owner of Global Research and Development Ltd.; and Solomon Schwartz, 49, of Monsey, N.Y., owner of Texas Armament Advisors Inc.
"These people are in it for the money," Kirby said. "They're willing to sell to just about anybody."
Charles Haydon, a lawyer for Schwartz, said of the charges: "It ain't so," adding that Schwartz has said he is innocent. He said federal prosecutors charged Schwartz with racketeering because "if you put enough charges together the jury may get tired and convict."
The dealers netted a profit of more than $1 million from sales of 1,300 night vision goggles to Argentina, according to the indictment. It said they decided to sell the goggles after a respresentative of the Argentine government told Schwartz that Argentina wanted the goggles to fight Great Britain in the Falklands war.
"Until Argentina got these devices, it was fighting blindfolded in the Falklands war," said Patrick O'Brien, assistant regional U.S. Customs Service commissioner.
The indictment said HLB purchased more than 900 pairs of the devices from Litton Industries of Tempe, Ariz., and about 370 pairs from Numax Electronics Inc., of Hauppauge, N.Y. To circumvent the prohibition on sales to Argentina, the defendants lied to Litton, said Dearie, adding that Litton had not violated any laws and had cooperated with the investigation.
Dearie said the goggles were paid for out of a National Bank of Washington account controlled by the Argentine Naval Commission, a government agency.
The indictment alleges that between 1982 and 1984 the four also plotted illegally to send 500 automatic rifles and 100,000 rounds of ammunition to Poland, 400 pairs of night goggles to the Soviet Union and 110 boxes of small arms and ammunition to Iraq.
The Iraq-bound shipment, requested by the Iraqi National Police, was seized in Europe. The Poland-bound arms were seized at Kennedy International Airport.
Representatives from Poland and Iraq approached the arms dealers, according to Kirby, but representatives from the Soviet Union did not.
Instead, the Justice Department set up a "sting" operation and a U.S. Customs agent posing as a Soviet official told the arms dealers that the Soviet Union wanted to purchase night-vision goggles.