Billion-Dollar Iran Arms Search Spans U.S., Globe : Even Pentagon Penetrated by Massive Effort

Ayatollah Khomeini’s desperate search for weapons and spare parts to sustain his bitter war with Iraq has spawned an increasingly sophisticated multibillion-dollar campaign to penetrate U.S. military stockpiles and defense suppliers--a clandestine effort involving a network of Iranian agents stretching across the United States, Europe and Asia.

A Times investigation, based on scores of interviews with investigators and officials here and abroad and thousands of pages of government documents, found evidence that Iranian agents have succeeded in buying spare parts and other military hardware directly from the shelves of Pentagon supply depots, from U.S. businessmen and from a range of other sources.

Scope, Sophistication

Reflecting the scope and sophistication of the Iranian effort was the role of an accused European munitions smuggler who, until his indictment earlier this year, had a government contract to expedite U.S. diplomatic pouches into communist countries. The smuggler at times used an office of the State Department courier service here for telephone calls connected with his work for Iran. The episode is now being investigated by the State Department, Customs Service and FBI.

Besides reaching into the State Department, investigators say, the Iranian effort has extended into the depths of the Pentagon.

In their quest for U.S. equipment, the initially naive Iranians apparently were swindled out of millions of dollars by purported suppliers who took advantage of their arms-at-any-price attitude. In one such scam, crates of supposedly vital war materiel were shipped to Belgium labeled “farm equipment,” spirited to a secret warehouse and pried open by their eager buyers, only to disclose, yes--mountains of rusty farm equipment.

Cash, Computer Lists

Such bumbling quickly gave way to hard-nosed effective bargaining, however, as Iranian operatives and their collaborators in this country and abroad utilized suitcases full of cash and computerized shopping lists complete with U.S. military parts numbers and requisition code designations to accomplish their goals.

Although many of the Iranian schemes have been penetrated and stopped by U.S. undercover agents in recent months, federal officials acknowledge that hundreds of arms shipments have gone through undetected over a period of almost five years.

The depth of Iran’s procurement purse is suggested by the existence of individual purchase orders running into the hundreds of millions of dollars, the voluminous nature of their shopping lists and the high prices of sophisticated military

gear. In addition, transcripts of tape-recorded meetings with Iranian agents show them boasting casually about having access to $500 million each for different groups of arms purchases.

“They act like they’ve got a bottomless pit of cash,” one customs investigator said.

So well-heeled is the effort that documents in one case suggest that a pair of American agents, as a bonus for obtaining fighter jet parts, were offered secretly deposited commissions of up to $80,000 a day--or $30 million a year--for selling discounted Iranian oil.

The precise value of the equipment believed actually to have reached Iran is not known, U.S. officials say, though a customs investigator said, “It’s like drugs--more gets through than gets stopped.”

The most startling disclosure to date in the widening investigations of Iran’s ability to penetrate U.S. security came Thursday, with the indictment of a Pentagon missile expert, a lieutenant colonel with a 25-year career in the Army. He is accused of conspiring with international arms merchants and Iranian government officials in a foiled plot to sell thousands of the most advanced U.S. and French missiles to Khomeini’s regime for more than $140 million.

A week earlier, seven other persons--among them a Navy supply specialist on the aircraft carrier Kitty Hawk and a civilian employee of a military arms depot--were indicted in San Diego for stealing Phoenix missile components, critical parts for the F-14 fighter jet and other equipment and supplies and smuggling them to Tehran.

Massive, Coordinated Operation

The latest arrests reflect only a shadow of Iran’s massive and coordinated operation.

Khomeni’s agents--some operating under the aegis of the Iran Air Force Logistics Support Centre (Europe), and working out of a London office near famed Scotland Yard--have been liberally supplied with funds collected through sales of Iranian oil on the world’s spot market. They have sought to buy, steal and smuggle American-made weapons, spare parts and supplies to repair the huge quantities of sophisticated U.S. equipment purchased by Iran’s Shah Mohammed Reza Pahlavi before he was overthrown in 1979--a treasure trove that has been severely depleted by the ayatollah’s grueling five-year war with Iraq.

A total U.S. arms embargo was imposed during the 1979-80 crisis when Americans were held hostage in Iran. And even though the Times found that hundreds of shipments have gotten through to Tehran, Administration officials say the smuggling operations have filled only about 10% of Iran’s arms needs and that the embargo’s success has spurred Khomeini’s desperation.

“The ayatollah’s war machine is ravenous. It’s not very well fed, but it’s got a tremendous appetite,” Customs Service Commissioner William von Raab said in an interview Thursday.

Fear of Terrorism

Like others in the Reagan Administration, he expressed fear that the missiles aggressively sought by Iran could be intended for terrorist attacks, such as shooting down unarmed commercial airliners or assaulting U.S. embassies.

“I think they have shown themselves not only willing but ready to do that, quite clearly,” Von Raab said.

Despite concerns about Iranian terrorism, the Times inquiry discovered instances of poor coordination between--and sometimes within--the U.S. government agencies involved in combatting the arms smuggling.

The State Department security office, for instance, did not know until interviewed by Times reporters that the Customs Service, federal prosecutors and even defense attorneys in San Diego had transcripts detailing an accused smuggler’s use of State Department telephones 10 months ago in contacts with an undercover agent posing as a smuggler. And until Thursday’s interview, Von Raab said, he was unaware that tape transcripts included an Iranian agent’s claim, more than a year old, that customs personnel had been bribed.

Vigorous Counterattack

The federal government’s initial response to Iran’s smuggling offensive in the early 1980s also appears to have been somewhat lackadaisical. More recently, however, the Customs Service and FBI have counterattacked vigorously, with investigations in more than a dozen locations, from Los Angeles to Boston and from San Francisco to Orlando, deploying undercover agents and using wiretaps, mail and telex intercepts and around-the-clock surveillance.

The intensified investigative effort--and perhaps an increase in Iran’s smuggling offensive--is reflected by Justice Department statistics. In 1981, one indictment naming one person was returned for violation of the Iranian arms embargo. In the last 12 months, however, a total of 14 indictments have named 54 individuals and eight companies--more than double the total of indictments for the three pervious years combined.

Findings of Investigation

The records of those cases, along with interviews with investigators, prosecutors, senior Administration officials and others involved show that:

- When the ayatollah came to power with the Iranian revolution, he inherited a deep dependence on the United States for military supplies. Between 1970 and 1979, the shah of Iran had purchased $17 billion in American weapons. They included 80 F-14 fighters and their Phoenix missiles--a system so sophisticated that the United States sold them to no other foreign country--as well as a broad range of other missiles, jet fighters, helicopters, tanks, warships and advanced radar units. He also inherited a state-of-the-art computerized logistics and supply system installed by Americans in the late 1970s and regarded then as far superior to the U.S. military’s own system.

- When the outbreak of war with Iraq put severe demands on the Iranian military, the Tehran regime set up procurement offices for replacement parts within a stone’s throw of Westminster Abbey and just down the street from Scotland Yard. From there, a coordinated worldwide effort was launched to fill the burgeoning needs, an effort that eventually spread around the world.

- Initially, at least, the Iranian operatives seemed to have more money than skill. They were defrauded repeatedly, regularly paying greatly inflated prices or sometimes handing over millions of dollars in up-front money for equipment and parts that never arrived. Before long, though, their procurement savvy increased. Armed with 32-page single-spaced computer printouts with specific 11-digit codes corresponding to the U.S. military’s national stock system, they began ordering by number with written contracts and demands for tests and warranties.

- The diverse cast of characters who allegedly were hired, lured or volunteered into the Tehran regime’s procurement effort included the Iranian owner of a San Diego delicatessen, a Chicago insurance company executive with financial problems, an assistant tour director for the Michael Jackson concert tour, a Portuguese real estate investor, a Swiss commodities dealer who lived in Brazil, a Korean businessman and a host of arms merchants and middlemen of various nationalities--British, French, German, Israeli.

- With experience, the Iranian masterminds and their operatives became more ambitious in their goals, investigators say, setting their sights on obtaining advanced weapons directly from the military arsenals of America and its allies. Prime examples are the alleged missile-buying scheme that led to last week’s indictments and a purported San Diego-based ring of naval parts thieves that was broken up last month.

- Another method of getting arms destined for Iran out of the United States involves using authentic export documents, which Iranian agents “buy from military officials in Third World countries and in some countries that are American military allies,” said one agent. These documents, usually signed by a military general, trade on the munitions black market for a minimum of $100,000.

“These documents allow the arms to flow out of the United States unquestioned,” said a customs agent who has been engaged in intelligence work designed to detect the sources of these documents.

- As the arms smuggling threat increased, U.S. investigative tactics became more innovative. “Sting” operations, or undercover penetrations of procurement rings, scored successes, but investigators and prosecutors have been frustrated by what they see as the courts’ frequently lenient treatment of convicted Iranian arms smugglers. They complain of sentences that amounted to no more than fines so small that the convicted smugglers retained fat profits and of jail sentences that included time spent confined to a luxury condominium in downtown Los Angeles.

Possible Corruption

The widely scattered investigations have resulted in more than indictments--some have turned up wisps of information suggesting the possibility of high-level corruption.

In San Diego, for instance, an undercover customs agent, who surreptitiously taped 75 meetings and telephone conversations after infiltrating a smuggling ring last year, heard the Iranian agent boast that the smugglers had contacts with “the congressman,” who he indicated was involved in arms deals.

“The congressman” was not identified in the transcript of the tape recording and investigators say the Iranian, who has pleaded guilty to conspiring to smuggle radar components and now is serving a prison term in a California, changed his story several times before recanting the claim during intensive questioning after his arrest.

The Customs Service has launched an inquiry but has not “come up with any substantiated evidence at this point” that any congressman is involved, a senior Customs Service official said. A Justice Department spokesman said investigators had concluded that the congressional connection was “more braggadocio than fact.”

Tale of Bribery

The agent, Yasser Abdulrahim (Max) Shooshtary, an Iranian immigrant with British citizenship, also told an undercover customs agent, who was posing as a supplier of high-technology equipment, that a customs agent had been bribed with $25,000 to get illegal shipments out of the country.

Questioned after his arrest, the Iranian said he was only repeating what he had been told by higher-level members of the ring, investigators say.

Customs Service chief Von Raab said that he had not been aware of the bribery assertion until Thursday’s interview. Later, a senior customs official said a “payment of $25,000 was made to (West) German customs by the bad guy to get his stuff released. . . . It was a normal and necessary fee.” He did not elaborate or identify the “bad guy.”

The transcripts also disclose that Brian Lewy, a West German freight forwarder who is a fugitive from justice after being indicted for arms smuggling, used the State Department’s diplomatic courier office in Washington last October to make and receive long-distance telephone calls involving illegal shipments. The transcript also showed that a middle-level State Deparment official personally placed one of the calls for him.

The official, James R. Vandivier, 59, was questioned by federal agents in November about his contacts with Lewy, who with four other individuals and three companies--including his freight forwarding firm, Intransco Transport and Speditions of Frankfurt, West Germany--were charged with attempting to export munitions to Iran illegally.

Contract for Diplomatic Pouches

At the time, State Department officials acknowledge, Lewy’s firm had a contract with the diplomatic courier service to expedite unclassified diplomatic pouches to eastern European countries. The contract was revoked immediately after Lewy’s indictment, a senior official said last week, but “there is no indication that there has been any abuse of the diplomatic pouch system.”

The Customs Service investigated the episode, then referred it to the State Department security office, a Customs official said, and in recent days has renewed its inquiry.

Vandivier, who left the government in January after 33 years of service, could not be reached for comment at his Arlington, Va., home. A senior State Department official who spoke on condition that he not be identified by name said, “We know of no evidence which would indicate that any State Department employees were involved” in the smuggling case.

“We are investigating that issue,” he added.

Big Ben Nearby

Iran’s global effort to keep its military machine operating is run from a well-guarded seven-story modern building at 4 Victoria St., London. Westminister Abby is almost across the street, with Big Ben nearby.

Despite its busy location, the building has an empty look to it. Uniformed guards stand behind locked smoked glass doors, moving quickly to the doors when strangers approach. A sign in Persian and English warns those who approach to have their passes ready.

Called NIOC House because the National Iranian Oil Co. is headquartered here, the structure also is home to the Islamic Republic of Iran Air Force and its Logistics Support Centre, and the Iranian Navy and its Technical Supply Office.

London, with a large international community and an abundance of brokers and dealers known for their willingness to deliver just about any weapon to just about anybody who has enough money, is a city of convenience for the Iranian arms procurement mission.

Requisitions Issued

From here, neatly typed but sometimes badly misspelled orders for munitions, parts and giant war machines are issued.

“Further to our verbal negotiations on 9-19-84, would you please deliver two brand new and genuien (sic) of VA145E tubes . . . to our assigned freight forwarder at your earliest convenience,” reads one of those orders. “It is understood that the sum of $294000 U.S. dallors (sic) will be paid to you within. . . . “

The order carries an official stamp. It was sent last September.

While London is the hub for Iran’s massive military procurement effort, many of the spokes point to the United States, at cities as distant as Boston and Los Angeles and as disparate as bustling Chicago and quiet Layton, Utah.

It was from Chicago, the Justice Department alleges, that two American businessmen acted as agents for British munitions dealers, shopping for parts for the ayatollah’s American-built, and now crippled, air force and navy as casually as hunters and fishermen might use an L. L. Bean catalogue.

Their frequent, sometimes inexperienced efforts to buy warship, fighter plane and military helicopter parts, as well as radar equipment and secret night vision gear, on the open market are detailed in a 20-count federal grand jury indictment returned last October and in hundreds of pages of government documents examined by The Times.

Chicago Businessmen

The two businessmen are William R. Fowler Jr., president of a Chicago insurance company, and George L. Veto, who runs an export business from his north side apartment. They are awaiting trial after pleading innocent to federal charges that they conspired to violate federal export laws while shipping, or attempting to ship, military weapons parts over a 20 month period ending in 1984.

Indicted with them are three men identified in court documents as agents for the Iranian military procurement offices in London dealing in military equipment and parts. They are Howard O. Freckleton and Gerald McDevitt, both British subjects, and David R. Sofaer, an Israeli who lives in London. The British government has refused to extradite them and they have not been arraigned on the charges.

The case, as laid out by the Justice Department, illustrates the kinds of personal vulnerabilities Iranian agents sought to exploit to gain cooperation from Americans, as well as the huge amounts of money they held out to reinforce their appeals.

Financial Troubles

Justice Department documents charge that Fowler was recruited to work in the Iranian procurement effort in late 1981 or early 1982, shortly after he suffered a major financial loss. The government alleges that he later joined forces with Veto, and that by July, 1982, he had received his first order for military parts from Sofaer. Before the end of the year, the two Chicagoans were receiving orders written on “Imperial Iranian Navy requisition forms . . . (with) references to military parts including ‘NATO stock numbers,’ ” the documents say.

Their response to orders was quick, if not always effective.

For example, they almost lost out on an attempt to buy replacement parts for Northrop F-5 jet fighters when they told the parts supplier, Associated Aircraft of Fort Lauderdale, Fla., that the parts were destined for Iran. They later changed their story to indicate that the parts were going to the Singapore Ministry of Defense, then had the shipment consigned to a Chicago freight forwarder who eventually shipped the box on to London, according to government documents.

The indictment charging the five with conspiracy lists several requests by Veto and Fowler for prices and information on the availability of items from individual suppliers. Those requests went to manufacturers, military salvage dealers, wholesalers and used equipment parts dealers in the United States and Canada. The indictment charges that the two businessmen deliberately concealed both the military nature of the material and its final destination--Iran.

Oil, Railroad Ties

Government records say nothing about direct compensation to Fowler and Veto. But there are repeated references to “negotiations” in which they sought to purchase as much as 400,000 barrels of crude oil a day from the National Iranian Oil Co. at a rate below the official price. In addition, they were allegedly to be guaranteed a commission of 20 cents per barrel, payable to an account in a Bahamas bank.

That deal, if completed, could have earned the pair as much as $80,000 a day in commissions alone. Government documents also contain references to a second deal to sell 600,000 railroad ties to Iran at the rate of 30,000 ties a month for $10 to $14 each.

In Layton, Utah, the Elgie Corp. buys and refurbishes parts for F-4 Phantom jets, a workhorse fighter plane for the U.S. Air Force. Customs agents confiscated F-4 parts they said were being shipped by Elgie from Denver to London for shipment to Iran.

Since that seizure last October, two search warrants have been served on the company and sources said documents recovered in those searches are now being presented to a federal grand jury in Salt Lake City. Elgie has made more than 50 shipments of F-4 parts since early 1983. However, neither the company nor its officers have been accused of violating the law.

Gas Protection Suits

Similarly in Connecticut, Edward S. Stolarz, an executive of Cofish International, was approached last year by a John Reed, a refrigeration engineer from Las Vegas. Reed put Stolarz in touch with a Swiss commodities broker from Brazil named Rene Schuler, who was soliciting massive supplies of protective suits for persons exposed to chemicals or nerve gas.

Stolarz agreed that his company, which supplied foul weather gear to the U.S. America’s Cup team, would be able to fill a $96-million order for 400,000 protective suits and associated decontamination units. However, he became suspicious about the ultimate destination of the suits after Schuler stipulated that the suits could not be made by Jews. Schuler said he represented a “Mideast country we can’t talk about on the telephone,” according to Stolarz.

Stolarz contacted the U.S. Customs Service in New Haven, and special agent Steve Crogan immediately assumed an undercover identity as the company’s export manager for protective garments. Investing only $17.50 per month for a telephone installed atop an office safe and a few dollars more for petty expenses, Crogan infiltrated and broke up the Iranian procurement operation.

The protective suits were sought by Iran after Iraq allegedly used chemical weapons to stop human wave assaults by Iran troops along their common border.

“If (Iran) had ‘em, they’d be crossing that valley into Iraq right now,” said a federal investigator.

$500-Million Shopping Budget

Commodities broker Schuler underscored Iran’s eagerness to obtain the protective suits and other equipment “such as airplanes and hardware” when he said he had a “shopping budget of approximately $500 million.”

“They didn’t bat an eye when they heard the price for the suits was going to be $96 million,” an investigator familiar with the case said.

As part of the scheme, Schuler told the undercover customs agent that fictitious export documents would be prepared showing that the final destination for the 400,000 protective suits would be Rome.

Ultimately, the agent arranged for sale of one sample protective suit demanded by Schuler for testing purposes. It was to be shipped via Brazil to London, where laboratory tests could determine its quality. However, in order to avoid export license requirements, Shuler arranged for an associate to handle the surreptitious shipment.

According to documents filed in federal court in New Haven, William Cherry--who was working as an assistant tour director for Michael Jackson’s “Victory Tour”--met the undercover agent at a rest stop alongside the Connecticut Turnpike to pick up the first sample suit. The agent encouraged Cherry to persuade Schuler to come to the U.S. to inspect the decontamination equipment.

Schuler and the agent met about a month later at the Ramada Inn in East Hartford, where surveillance cameras recorded a key revelation in the criminal case.

“You know where (the shipment) is going?” Schuler asked the customs agent. “It’s going to Iran.”

Backstage Arrest

Late last summer, while Jackson was performing in Buffalo, federal agents arrived backstage to arrest Cherry. Simultaneously, agents also arrested Schuler, who was in Las Vegas negotiating on behalf of a group of Japanese investors for the purchase of the Dunes Hotel and Casino. The Japanese deal reportedly collapsed after Schuler tried unsuccessfully to continue negotiating from a North Las Vegas jail cell.

Charged with fraudulently denying the United States of the right to conduct its foreign policy, Schuler pleaded guilty and Reed stood trial and was convicted. They were believed to be the first defendants convicted under that statute.

Cherry is awaiting trial scheduled for September.

‘Smurf’ Phase

Iran has employed a variety of increasingly shrewd strategies to penetrate American weapons and supply markets. One veteran federal investigator said he has seen three distinct phases.

“At first they used what you might call a ‘Smurf’ program, flooding the countryside with so many agents that even if 80% got caught, they could count on the other 20% coming up with a lot of goods,” said the investigator.

“But they were awfully naive and ineffective, so Tehran went to phase 2, using brokers to represent them in covert deals.”

That proved to be an expensive strategy. As the layers of middlemen multiplied, so did the price markups. Last September, for example, the chief of the Iranian Air Force logistics center in London offered a European broker $294,000 for two “brand new and genuine” American-made radar sensing devices. The same devices, critical electronic components of mobile radar stations, could be purchased by authorized buyers for as little as $30,000 each.

And one Western company reportedly was getting almost a 2,000% profit, according to a government agent, by buying scrap aircraft parts for $2,000, “knocking out a few dents and repainting them, then getting $40,000 each.”

Added another federal agent, “The price markup is as good as running dope.”

Big Rolls of Cash

There is another parallel to narcotics trafficking as well: the extensive use of large amounts of cash. During a 1984 undercover operation in Los Angeles, a Portuguese businessman--who said he would bring “a suitcase of cash next time”--purchased a pair of radar components for $25,000, counting out the payment in $100 bills from a Manila envelope stuffed with more than $100,000.

Besides being expensive, Iranian officials discovered, there was another draw-back to the flood-of-cash strategy: Sometimes there was no honor among mercenary smugglers.

For example, about three years ago Iran had arranged for a $3-million order of aircraft parts and weapons from brokers who said they would ship the cargo in containers marked “farm implements.” Iran was to transfer the money via letter of credit upon proof that the cargo was loaded aboard ship and sailing from the Far East. That was done.

Two months later, when the ship arrived in Belgium, Iranian officials were stunned to discover that the containers marked “farm implements” were indeed just that--including old tractor parts, pails and shovels.

There is speculation that such costly experiences--coupled with an increasingly effective Customs Service enforcement effort--have forced Iran into its third, and most sophisticated, strategic phase.

Phase Three

As suggested by the two most recent Iranian smuggling cases--one in San Diego involving Navy personnel and Thursday’s arrest of a career Army officer-missile expert--Tehran and its agents are now trying to penetrate the American military and its supply system more directly.

Also, Iranian agents exhibit mounting caution and concern over delivery reliability--insisting, for example, that purchased cargo be inspected before payment, preferably outside the United States.

“It’s quite an irony, isn’t it?” asked a customs agent. “Here they call us ‘The Great Satan’ at the same time they can’t get enough of our nuts and bolts.”

A 58-page affidavit filed in San Diego on July 12 offers glimpses into the increased specialization of the Iranian procurement operations. Sometimes using direct quotes and other times paraphrasing, the document gives an account of dozens of wiretapped conversations in which members of the alleged theft-and-diversion ring discuss orders for specific weapons components.

Complaint Call

For instance, it said that last April 9 the London-based Iranian contact, Saeid Asefi Inanlou, called Franklin Agustin, who is among those named in the San Diego indictment, “to find out why certain items he had ordered had not arrived.”

It said Agustin, who has been identified by investigators as the San Diego ringleader, replied that “he had ‘nothing new to report. . . . The bigger ones I’m waiting. . . . They are not in yet.”

Asefi then told Agustin “he was upset about the ‘fuel controls,’ for he had received only five of them instead of the seven he ordered. Asefi stated that ‘the third and fourth ones had been returned to me. . . . It had been smashed.’ Asefi lamented that it was ‘such a waste’ of time and money to send the parts ‘from your side to L.A., L.A. to New York, New York here, here then Zurich . . . ‘ with inadequate packing material,” the affidavit said.

Before hanging up, Asefi said “he had received the brochure on the ‘latest video’ and would like the book that this brochure came from,” the affidavit said. “Agustin explained that the book came from the ‘U.S.A.F.’ (United States Air Force) and that he would order an extra book for Asefi.”

Three days earlier, the document said, Asefi had told Agustin that “he needed a handbook or instruction manual and diagram for a particular part because ‘it could be a new system’ and ‘we may not have it.’ ” And Agustin, who had rented space at the Mini-Max Self Storage facility in San Diego, told the Iranian that “he had ‘so many little things’ ” that “he was putting his parts in ‘the other place now’ because ‘the status . . . of my shipment . . . too much for my place already. . . .’ ”

Meanwhile, in Orlando

At about the same time--on April 8--but on the other side of the continent, the FBI says, one of its undercover agents, who was posing as someone with access to the best of U.S. and French missiles, was receiving an impressive order from Paul Sjeklocha.

During a meeting at Orlando International Airport, an affidavit said, the native of Yugoslavia--a tall, husky man with graying hair and mustache who once worked for the USIA in Moscow and later became a writer and editor of journals dealing with military science and technology--advised the FBI agent “of the following items his principals wanted to purchase.”

The affidavit then listed the order in laborious detail:

“Three hundred Sidewinder missiles, O-AIM-9L, at forty-eight thousand dollars each (Sjeklocha’s cost twenty thousand dollars each).

“Three hundred Sidewinder Missiles, ATM-9M, at sixty-five thousand dollars each (Sjeklocha’s cost twenty-two thousand each).

“Three hundred Sparrow AIM-7F Missiles at twenty-two thousand one hundred dollars each (Sjeklocha’s cost thirteen thousand dollars each).

“Three hundred Sparrow AIM-7M Missiles at nineteen thousand eight hundred dollars each.

“Sixty Harpoon Missiles, RGM84A, (air launch), at nine hundred and three thousand dollars each.

“Thirty Phoenix Missiles, AIM-54, (any class), at eight hundred and ninety thousand dollars each (earlier model).

“Thirty Exocet (phonetic) French Missiles, 39-M, at eight hundred and ninety thousand dollars each.”

The order, totaling $139.65 million, was never delivered. Instead, Sjeklocha and five others were arrested in six cities Thursday night.

Unhappy With Sentences

Despite the rising numbers of investigative successes, many federal prosecutors and customs agents are dissatisfied with the relatively light sentences frequently imposed by the courts on persons convicted of smuggling arms and weapons parts to Iran.

Amir Motamedi, an Iranian citizen and UCLA graduate, ran what could be described from court records as a mail-order smuggling service out of a rented postal box on Wilshire Boulevard. He was convicted of conspiracy charges early this year in connection with illegal sales of an estimated $10 million in assorted military parts to Iran. He was fined $50,000 and given a three-month jail term.

Investigators had arrested Motamedi twice and served three different warrants to search his home and business records, discovering in the process that he had continued to make illicit sales to Iran until a few days before his trial in Los Angeles. Among items ordered from suppliers and shipped to Tehran by Motamedi were parts for F-14, F-5, F-4 and A-4 fighter planes; parts for KC-135 air refueling aircraft and parts for the P-3 Navy Orion anti-submarine reconnaissance aircraft.

At the time of his last arrest Motamedi was using the fictitious name Fred Coffey in soliciting possible supply sources for Hawk missiles, mine-sweeping equipment and millions of rounds of machine gun ammunition, investigators said. His shopping efforts were assisted by a microfiche file--apparently obtained from the U.S. Air Force--containing stock and parts numbers and identifying the makers “of every nut, bolt and ash tray” in an airplane.

“I think his procurement system was better than the Pentagon’s,” one investigator said.

Unhappiest Case

However, the case that caused some of the widest discontent among enforcement officials was the sentence imposed on Moises Broder of Portugal, a wealthy real estate developer who was paid $85,000 in commissions to arrange the sale of American-made radar components to Iran.

While Broder was awaiting trial in Los Angeles federal court, a U.S. magistrate permitted him to remain under “condo arrest”--confined to a luxury apartment in Bunker Hill Towers for almost five months, under guard by a private security firm.

When he was convicted of conspiring to violate U.S. export laws, Broder was fined $50,000 and sentenced to a year in prison. However, he was given credit “for time served.” Consequently, the five months he spent confined to the $20,000-a-month condominium he had rented was subtracted from the time Broder must remain at Terminal Island Federal Correctional Center.

Asst. U.S. Atty. William Fahey, complaining to the court about Broder’s “extraordinary” treatment, said it had “the appearance of unfairness and impropriety.” The Los Angeles prosecutor said Broder “has the keys to the jail in his own pocket.”

Most Won’t Extradite

Also frustrating to law enforcement officials is the haven from prosecution that foreign smugglers enjoy if they remain outside U.S. jurisdiction. Most nations--including such stalwart allies as Great Britain--do not recognize most export violations as extraditable crimes, at least not when one of their own citizens is accused.

For example Britain has refused to extradite British citizens Freckleton and McDevitt or Israeli citizen David R. Sofaer, a resident of England--the three indicted last fall in Chicago for illegally shipping radar and night vision devices to Iran. U.S. prosecutors also charge them with conspiracy to ship parts for helicopters and navy craft.

U.S. prosecutors concede that extradition of a foreign national is a knotty issue. It is exacerbated by treaty provisions that expressly reject extradition for charges based on political violations. The United States cites its intention to remain neutral in the Iran-Iraq war as the basis for its embargo on arms sales to either country.

Believed Political

“Great Britain has the attitude that these cases are very political,” said Lynne Lasry, assistant U.S. attorney in San Diego. She is attempting to extradite fugitives from England and West Germany.

Frustration over the extradition problem comes on top of a sense among U.S. enforcement officials that they are not scoring knockout blows in the battle against Iranian agents. Despite intensified enforcement efforts and the increasing number of indictments, they believe the flow of parts and equipment goes on.

Said one veteran agent, “They’re still sending stuff out day and night.”

THE ROAD TO TEHRAN

Some routes followed by military spare parts purchased in the U.S. in 1983 and 1984 for use by the Iranian military.

F-4 Phantom Jet Parts

1. London arms broker sends order to parts salvager and refurbisher (no name available) in Layton, Utah

2. Utah company provides the parts, which are shipped to the Iranian Air Force Office of Procurement in London via Denver and Chicago. The parts are then sent to Tehran.

F-5 Jet Fighter Parts

1. London arms broker sends order to Chicago businessmen under indictment and awaiting trial for alleged illegal arms shipments.

2. Chicago businessmen forward order to Fort Lauderdale, Fla.

3. Associated Aircraft, an aircraft parts company in Ft. Lauderdale, supplies the parts (warning that

they cannot be shipped overseas without proper government documents). Parts are shipped to Chicago airport, where Customs agents substitute dog food for the F-5 parts. The substitute shipment is sent to Tehran via London.

Combat Tank and Howitzer Parts

1. Benjamin Kashefi, a San Diego businessman who has been indicted but not convicted of taking part in the conspiracy, ships the parts, labeled “auto parts,” to Switzerland, where they are forwarded Tehran.

Infrared night-vision glasses

1. London arms broker sends order to Chicago businessmen.

2. Chicago businessmen forward order to a defense plant (no name available) in California. Parts then travel to Iran via Chicago and London.

Protective Suits for Use in Chemical Warfare

1. A Brazilian broker for Iran requests help from a Las Vegas partner in finding a supply of U.S.-made protective suits.

2. After fruitless searches among Southern California military surplus dealers, the Las Vegas partner contacts a Connecticut manufacturer, Cofish International of East Haddam.

3. In cooperation with an undercover Customs agent, the Connecticut manufacturer sells two protective suits that are shipped from Connecticut to Brazil and then forwarded to London where they’re turned over to Iranian officials for inspection.

These two suits probably never made it to Iran; they remain useful for only a day or two after being removed from their packaging. Whether other suits beyond the first two were shipped to Iran remains unclear.

Midwest Bureau Chief Larry Green participated in the reporting of this project. Also contributing were New York Bureau Chief John J. Goldman, staff writer Ralph Frammolino in San Diego and researchers Judy Ross in London and Dallas Jamison in Salt Lake City.