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Couple Guilty in Plan to Sell Goods to Libya, Defying U.S. Embargo

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Times Staff Writer

A federal court jury on Friday returned guilty verdicts against a Louisiana couple charged with exporting oil-field equipment to Libya in violation of a U.S. embargo on trade with the North African country.

After about a day and a half of deliberations in the U.S. District Court in San Diego, jurors convicted Cheryl and George Smith on all 11 counts contained in a federal indictment handed down in January, including conspiracy to defraud the U. S. government through the illegal export of goods and making false statements to conceal those exports.

Despite the protests of defense attorneys, U.S. District Judge Rudi M. Brewster ordered the Gretna, La. couple held in custody until their sentencing on Jan. 19, an action that drew sobs from a stunned Cheryl Smith. Each defendant faces a maximum penalty of 80 years in prison and a $2.7-million fine.

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Trade Embargo

The verdicts against the Smiths, along with an earlier guilty plea by a Scottish businessman involved in the shipment scheme, mark the first convictions under the trade embargo imposed by President Reagan in February, 1986. The embargo came in the wake of terrorist attacks against the Rome and Vienna airports, attacks that the United States blamed on Libya.

Assistant U.S. Atty. Phillip L. B. Halpern, who prosecuted the complex case, said he was “very, very gratified” by the verdicts and had high praise for the jury.

“I think they carefully sifted through the facts of the case and were not swayed by (defense attorneys’) emotional pleas concerning the government,” Halpern said. “It has become fashionable among defense attorneys to attack the government and the government’s agents as opposed to looking at the factual conduct of the defendants. It’s a credit to this jury that it saw through that sort of tactic and made a decision based on the evidence.”

Judy Clarke, who represented Cheryl Smith, said she was disappointed with the verdicts and that she expected her clients would appeal.

“It was a hard case and a complicated case and I’m sure the jury feels like they did their job,” said Clarke, executive director of Federal Defenders Inc. “I was somewhat surprised at the quickness of the verdict, because there were 30-odd witnesses and hundreds of documents and several hours of tapes. But I can only assume the jury was thorough.”

San Diego Company

The charges stemmed from a 6-month undercover investigation in which a U.S. Customs Service agent posing as a salesman for San Diego-based Solar Turbines Inc. sold the Smiths turbines and other oil machinery.

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The couple, operators of Oil Patch Production Services Inc., then sold the equipment to Scottish businessman Francis George Christie, knowing it was destined for use in Libya’s American-built oil fields, prosecutors charged. About $289,000 in equipment from Solar and 18 other companies was involved, according to the government.

During the monthlong trial, Halpern argued that “old-fashioned greed” motivated the Smiths to arrange the shipments in direct violation of the embargo. Halpern used tape recordings of conversations between the Smiths and an undercover agent to argue that the couple was well aware that the equipment was going to Libya and proceeded with the shipments nonetheless.

Defense attorneys Clarke and Warren R. Williamson, meanwhile, argued that their clients were entrapped by Agent Daniel Supnick, who improperly enticed them into committing the crimes.

Christie, of Aberdeen, Scotland, pleaded guilty in August to a single count of conspiring to defraud the government by arranging the shipment of the petrochemical equipment. Under an agreement with prosecutors, Christie served as a witness against the Smiths and the remaining charges against him were dropped. He will be sentenced Monday.

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