Japanese and U.S. Firms Indicted in Sales to Iran

A federal grand jury Wednesday indicted one of Japan’s leading military contractors, a Florida company and five individuals on charges of conspiring to ship to Iran critical components needed to maintain U.S.-made jets during Iran’s lengthy war with Iraq.

“This alleged illegal diversion of sensitive American military technology contributed substantially to the capabilities of the Iranian Air Force and was critical to the maintenance of fighter aircraft sold to Iran,” U.S. Atty. Jay B. Stephens said.

The 22-count indictment charged Japan Aviation Electronics Industry Ltd., Aero Systems Inc. of Florida and three of its subsidiaries, as well as the five employees, with conspiring from 1984 to 1987 to transfer illegally to Iran more than $7 million of navigational components for American-made F-4 Phantom jets. The shipments allegedly occurred after the Ayatollah Ruhollah Khomeini had come to power and the United States had banned arms shipments to the Muslim state.

Officials of Aero Systems did not respond to requests for comment, and JAE officials could not be reached Wednesday.

The more than 300 gyroscopes and accelerometers allegedly shipped to Iran could have kept about 100 F-4s flying, Stephens estimated. The devices were used as replacements for failed components.

Meeting with reporters after the indictment, Stephens emphasized that the Japanese government had cooperated fully in the U.S. Customs Service investigation and said there is no evidence that past or present Japanese government officials had knowledge of the scheme.

Nevertheless, conviction of the major Japanese firm for taking part in the illegal arms transfer would be highly embarrassing for Japan, which has imposed a virtual ban on arms trading. Last week, Japanese police raided JAE’s headquarters and the home of its former president in a related investigation into the company’s alleged shipment of U.S.-made Sidewinder missile parts to Iran between 1987 and 1989.

The U.S. case could result in the suspension of JAE’s contract authority and export privileges in the United States. In addition, the Japanese firm faces a possible fine of up to $22 million, Aero Systems and each of its subsidiaries faces fines of up to $12 million and the individuals face prison sentences of five to 10 years.

Although the alleged conspiracy involving JAE and Aero Systems coincided with the Iran-contra arms scandal, Stephens said the investigation has uncovered no link between the two.

The individuals charged were JAE employees Hironobu Takahashi, Toshiyuki Murakoshi and Tsutomu Iida, and two former executives of Aero Systems Aviation Corp., Colin Devellerez and Wayne Waterson. Takahashi was one of the four JAE executives arrested last week by Japanese police in their investigation of the Sidewinder parts shipments, Stephens said.

Devellerez, who has Burmese and Australian citizenship, is in California, where he is free on bond in a separate case alleging illegal shipment of Hawk missile parts to Iran. He is expected to surrender here, Stephens said.

Waterson is operating a company in Australia, the U.S. attorney said, noting that the United States has an extradition treaty with that country, as well as with Japan. He said he is hopeful that all of those charged will be tried here.

Under a licensing agreement, JAE was authorized to use technical data and materials from Litton Systems Inc. of California to manufacture components for the inertial navigation system used in the F-4. But the agreement barred anyone other than the Japanese military from using the technology or products made by it.