West German ‘Techno Bandit’ Did ‘Tremendous Harm,’ Prosecutor Says

A West German businessman described as one the world’s top “techno bandits” did “tremendous harm” to U.S. security by illegally diverting millions of dollars worth of American high technology to the Soviet Union, a federal prosecutor declared Tuesday.

Assistant U.S. Atty. William F. Fahey charged in Los Angeles federal court that Werner Bruchhausen, 47, had provided “tremendous benefits” to the Soviets by selling them more than $6 million worth of high technology and military equipment.

Bruchhausen, an electronics engineer who conducted his worldwide operation from a mansion outside Munich before his arrest in Britain in May, 1985, is on trial on 15 counts of mail fraud. He was extradited to the United States in June.

Fahey declared in an opening statement that the Soviets recruited Bruchhausen in the early 1970s to obtain U.S. technology that could not be shipped outside this country without export licenses issued by federal authorities.

The Soviets were so eager to obtain American-made electronic and computer equipment for military and civilian use that they were willing to pay Bruchhausen up to 10 times the value of the gear, Fahey said.

Just how well the Soviet Union succeeded in its buying efforts will be explored by expert government witnesses during the trial, according to Fahey. But he offered examples outside of court on Tuesday.

The Soviets acquired an entire plant enabling them to greatly improve their quality control in computer microchip production, increasing the number of good chips from 10% to 70% or 80%, Fahey said. Also, he said, they acquired U.S. military communications equipment that permitted them to monitor North Atlantic Treaty Organization forces.

Bruchhausen’s attorney, Alan M. May, portrayed his client as an ambitious businessman who set out to make his fortune during a period of detente between the United States and the Soviet Union and ended up being a victim who was betrayed by lying associates and set up by federal officials.

Bruchhausen never talked to any U.S. manufacturers about sensitive equipment and never falsely filled out a government form, May said. “And now they say, ‘Werner made me do it.’ ”

Quite a different opinion of Bruchhausen’s role in securing U.S. technology was expressed when the British agreed to extradite him.

“We have spread our net wide and caught one of the biggest fish,” said Customs Commissioner William Von Raab. “Werner Bruchhausen is one of the most important members of a small fraternity of shady characters who handle most of the transfers of forbidden technology to the Soviet Bloc.”

Fahey alleged that Bruchhausen designed an elaborate scheme to smuggle American high-tech gear by setting up dozens of companies, several of them in California, and instructing his agents on how to export components without detection either by U.S. manufacturers and federal authorities.

The prosecutor charged that two of Bruchhausen’s companies operated under different identities out of the same office, one to buy equipment and the other to illegally ship it out of the country by falsely declaring what was being shipped and concealing its value and final destination.

Fahey accused Bruchhausen of setting up two companies in Marina del Rey in October, 1974, to purchase and export technical commodities. He said the names of the firms were changed twice within six years before authorities became suspicious.

According to Fahey, Bruchhausen and his agents made at least 13 attempts to export high-tech equipment between 1978 and 1980, starting with his first successful attempt in November, 1978, when Bruchhausen purportedly acquired a Data General S/230 computer.

Sometimes equipment was sent to Switzerland, or West Germany, or Austria, Fahey said. But, he said, “Eventually all of it ended up in the Soviet Union.”

Bruchhausen was originally named, along with two Southern California residents, in a 60-count indictment returned by a federal grand jury in Los Angeles in August, 1981.

The others, Russian-born Antoli (Tony) Maluta and Sabina Dorn Tittel, were sentenced to prison in 1981 for illegally diverting U.S. technology. Bruchhausen avoided arrest for four year.

Bruchhausen’s lawyer described Maluta on Tuesday as a snake who, as Bruchhausen’s agent, had lied to equipment manufacturers and U.S. Customs officials, and stolen $750,000 from the defendant.

The trial, which U.S. District Judge Alicemarie Stotler is hearing without a jury, is expected to last three or four weeks.