Two Plead Guilty in Navy Jet Parts Theft : Brothers Were Key Figures in the Ring Providing Iran With Stolen Equipment

Two Filipino brothers, charged with running an international ring that supplied Iran with jet fighter parts stolen from the U.S. Navy, pleaded guilty Thursday to four felony counts in federal court.

The pleas by Franklin P. Agustin, 48, and Edgardo P. Agustin, 46, brought the case, which raised questions about military supply system security, closer to a conclusion.

Prosecutors said that Franklin Agustin, a Canadian citizen living illegally in San Diego, ran the ring between 1981 and 1985 from his National City insurance office and Tierrasanta home, handling an estimated $7 million worth of parts for F-14 Tomcat jets.

Agustin obtained the parts by cultivating a network of sailors and Navy civilian employees with access to military computers and supply shelves, prosecutors said. Some parts were taken from shelves at North Island Naval Air Station in Coronado, put in paper bags, and driven off the base, court documents say.

Agustin took orders for parts from an Iranian living in England. His brother, Edgardo, used an East Coast company to ship the parts to England, where prosecutors believe they were forwarded to Iran, which needed spare parts for its American-made jets.

The items included flight computers and parts for the Phoenix missile, as well as assemblies for the navigation system. Ten people were named as conspirators in the smuggling ring.

The Agustin brothers pleaded guilty Thursday to conspiring to steal and export stolen government property without an export license. They each face 27 years in prison and $850,000 in fines when they appear before U.S. District Judge L.C. Nielsen for sentencing Sept. 3.

Despite the pleas Thursday, prosecutors and defense attorneys continued to disagree about the importance of the case and how much the stolen parts were worth.

A list released by prosecutors valued the items at $7 million, but defense attorneys said the stolen parts--some used and inoperable--were actually worth $50,000 to $250,000.

“I think we can say today that the government has a public acknowledgement of what we’ve said all along, that this international arms smuggling organization had been penetrating U.S. military service to steal and export millions upon millions of dollars of sophisticated armaments,” said Assistant U.S. Atty. Phillip L.B. Halpern.

Halpern’s boss, U.S. Atty. Peter K. Nunez, said: “I think the pleas today confirm that and show that there are certain problems within the military system that have to be addressed.”

However, Lonn E. Berney, Edgardo Agustin’s attorney, said the brothers were only businessmen from a “different culture” who didn’t realize they were breaking the law until they looked back at what they did and saw the “cumulative” effect.

“Crimes like this are not like crimes like murder, where a gun is taken out and someone is shot. Crimes like this are illusory,” Berney said. “It’s like trying to see air.”

Berney also said he would dispute the value placed on the stolen parts by the government, although both Agustins agreed Thursday that they handled the general number and kind of items listed in the plea documents.

Taking a swipe at the publicity generated by the smuggling charges, Berney said putting a high value on the parts has an “impact on the U.S. attorney’s public relations bureau.”

Besides the Agustins, a sailor who stole some parts, 39-year-old Antonio Gatdula Rodriguez, pleaded guilty Thursday to three felony counts.

Rodriguez faces a 25-year sentence and $750,000 in fines when he appears before Nielsen Sept. 8. His attorney, Warren R. Williamson, said in court Thursday that Rodriguez also faces a dishonorable discharge from the Navy and loss of “thousands of dollars” in benefits.

A storekeeper with 17 years’ service, Rodriguez was accused of stealing $750,000 worth of military parts. Prosecutors said he used a telephone aboard a Navy vessel docked in Washington to call Franklin Agustin about the stolen items.

Thursday’s pleas bring to five the number of people who have admitted guilt in the case, including two who worked at the Naval Air Rework Facility in Norfolk, Va., prosecutors said.

Two others--Franklin Agustin’s wife Julie and sailor Primitivo B. Cayabyab--reportedly were prepared to enter guilty pleas in San Diego federal court Thursday. But Julie Agustin changed her mind and Cayabyab’s attorney could not reach an agreement on the wording of the plea agreement.

The Iranian charged in the case, Saeid Asefi Inanlou, is still a fugitive in England, Halpern said, and George P. Agustin, brother of Franklin and Edgardo, is a fugitive in the Philippines.