A naturalized U.S. citizen from Belarus and his Russian partner were charged yesterday in Chicago with attempting to purchase and smuggle sensitive U.S.-made avionics to an unidentified customer in Russia.
The avionics, used to warn fighter pilots that their aircraft have been illuminated by enemy radar, are manufactured by an American company and approved for export only to Japan and Taiwan, prompting U.S. officials to speculate that the ultimate buyer in the scheme may have been China.
"There's no concrete evidence, but based on everything we've seen, the Chinese government is the ultimate buyer here," said Pat Jones, a Customs Service spokesman in Washington.
Peter M. Leitner, a senior strategic trade adviser at the Defense Threat Reduction Agency, said Russian buyers of avionics made specifically for Japan and Taiwan "suggests they've got either a Chinese or a North Korean customer. That's pretty clear, and that's pretty disturbing."
Neither Japan nor Taiwan, Leitner said, "poses a threat to Russia."
Another Pentagon official, who asked not to be quoted by name, said that "the components sought by the two were probably intended for use in testing the capability of U.S.-origin electronic countermeasure systems. With the knowledge gained by testing against U.S. systems, modification could be made to foreign missile systems allowing them to increase their ability to avoid detection and strike the target."
One of the devices, called a digital frequency discriminator, is made specifically for use by Japan in its F-2 and F-15J fighters, court documents say. The other, an instantaneous frequency measurement receiver, is manufactured only for the Taiwanese military.
Mike Turner, the Customs Service's director of strategic investigations, called the scheme to acquire the avionics "one of the classic methods used by foreign governments to acquire sensitive military technology either for its direct use or so that it can be reverse engineered."
While foreign spies typically concentrate on acquiring secrets and ultra-sensitive technology that are not commercially available, Turner said, foreign intelligence services typically use front companies and overt arms dealers to acquire commercially available defense technologies by fraudulently obtaining export licenses or smuggling items out of the country, if licenses cannot be obtained.
A House select committee headed by Rep. Christopher Cox (R-Calif.) reported in May that Chinese procurement agents "have approached U.S. firms to gain an understanding of the uses of available technology and to evaluate [China's] ability to purchase dual-use technology under the guise of civil programs and within the constraints of U.S. export controls."
The panel also said there are more than 3,000 Chinese corporations operating in the United States, many of them front companies for Chinese intelligence and the People's Liberation Army that have "technology targeting and acquisition roles."
Customs officials identified the two men charged yesterday as Edward A. Batko, of Buffalo Grove, Ill., a naturalized U.S. citizen from Belarus, and Mikhail Romanovich Press, a Russian national in the United States on a temporary visa.
Batko was released on bail after putting up a $500,000 house he bought last year in a cash transaction as collateral, customs officials said. Press remained in custody. Both men, to be tried in U.S. District Court in Alexandria, face fines of up to $1 million and 10 years in prison if they are convicted of violating the Arms Export Control Act.
The case began in March after the manufacturer of both radar detection devices called the Customs Service and reported that Batko was trying to acquire the items, even though he had been told the State Department would never grant him an export license. An undercover customs agent then contacted Batko and said he could provide the devices for $160,000.
After numerous meetings, Batko met the undercover agent a week ago at Baltimore-Washington International Airport and told him that "the Russian organization wanting to purchase the [radar detection devices] is run by present and former KGB technical officials responsible for bugging the United States Embassy in Moscow," according to a Customs Service affidavit filed in Chicago.
At the meeting, the affidavit said, Batko told the customs agents that he had a "personal friend" arriving to smuggle the items back to Russia. " 'He goes through customs,' " the affidavit quoted Batko as saying, " 'you get paid.' "
In a subsequent meeting Wednesday night at the United Airlines Red Carpet Lounge at Chicago's O'Hare International Airport, Batko introduced Press to the undercover customs agent as his friend "Michael" from Moscow and said he was the one with authority to approve the deal.
After negotiating for three hours, they agreed that the undercover agent would deliver the devices next week to one of Press's agents at Dulles International Airport, according to the affidavit. Batko and Press were arrested by customs agents the following day.