2 Californians Arrested on Export Charges

Two California businessmen have been arrested and charged with trying to illegally export an advanced $6-million computer to Bulgaria at a cut-rate price of $1 million, U.S. Customs Service officials announced Wednesday.

The two, Nick Spiliotis, 44, of Long Beach, and Robert Wheeler, 44, of San Francisco, were seized Tuesday in a Miami-based “sting” operation, officials said.

Neither Spiliotis, president of CID Corp. of Long Beach, nor Wheeler, president of American Technology Trading Group of San Francisco, could be reached for comment Wednesday through their offices.

Customs officials said they didn’t have any information on the two firms except that they appear to be very small operations, possibly just storefronts.

Bill Rosenblatt, Customs Service chief in Miami, said the two men attempted to export an ETA 10 model main-frame computer manufactured by Control Data Corp. of Minneapolis. The computer has military as well as civilian applications and is the most sophisticated computer anyone has ever tried to smuggle out of the United States, he said.

Because military uses of the computer include decoding intelligence data and tracking the paths of incoming nuclear warheads, the two men will be charged with violating the Export Administration Act, Rosenblatt said. The law, which carries a maximum penalty of 10 years in prison and a $250,000 fine, prohibits the sale of sophisticated computer technology to Eastern Bloc countries.

Customs officials said they believe there are only seven ETA 10 computers outside the United States, all of them sold legally.

The fact that Spiliotis and Wheeler had attempted to sell the computer for only $1 million could indicate that it had been stolen, Rosenblatt said, although authorities still are trying to determine how they obtained it.

“They wanted to make a quick sale,” Rosenblatt said. “Because of greed they became high-tech bandits.”

Officials said the undercover investigation began last January in Miami when the two men allegedly approached another businessman whom they believed had sold sophisticated technology to Eastern Bloc nations. The third businessman, whose identity was not disclosed, contacted customs agents who made plans to trap the two suspects, according to officials.

Working with the Customs Service, the informant cautioned Spiliotis and Wheeler that the sale could only be legal if the two had clearance from the Commerce Department, authorities said. But the Californians allegedly replied that they could produce false documents showing that the computer was to be shipped to France instead of Bulgaria.

Wheeler was arrested in Charleston, S.C., where the 18,000-pound computer and spare parts were still on pallets inside commercial cargo containers, Rosenblatt said. Spiliotis was arrested when he arrived in Miami to receive payment of the $1 million.

Rosenblatt emphasized that, although relations with Warsaw Pact nations have improved, it is still illegal to ship advanced technology to them.

Customs Commissioner Carol Hallett--who was in Monterey, Calif., Wednesday--said of the two arrests:

“It is true that the Berlin Wall has come down, that the era of glasnost is upon us and legitimate trade with the Eastern Bloc is increasing. However, the laws of the United States are clear. We simply will not allow American high technology to be stolen.

“The investigation of high technology snuggling remains one of our top priorities.”