El Toro Arms Dealer Says He Was ‘Set Up’

Earlier this month, an El Toro arms dealer sat around his $780 hotel suite in Frankfurt, Germany, with 15 former high-ranking Communists while they and U.S. undercover officers posing as Iraqi agents pondered this problem:

How, one year after the Gulf War, could the group get $96 million worth of Strela surface-to-air missiles, rocket-propelled grenade launchers, AK-47 assault rifles and nuclear triggering devices out of Eastern Europe and into Iraq via a stopover at New York City’s John F. Kennedy International Airport?

The weapons never made it to Iraq. In fact, they never left Eastern Europe--except for 100 AK-47 rifles that landed in New York under the guise of “technical equipment” as proof that Bulgarian, Polish and Russian officials could make good on their promises.

The Bulgarians and Russians headed home after four days of unwittingly participating in an elaborate U.S. sting operation.

The Poles, however, decided to stay in Germany to party.

Hours later, six onetime Polish Communists were in a German jail on arms smuggling charges. Meanwhile, across the Atlantic, U.S. officials rushed to Kennedy Airport where they arrested arriving passenger and self-proclaimed arms dealer Ronald Hendron, 51, of El Toro.

Hendron’s Newport Beach financier, Jehmin Lah, 44, of Newport Beach, was picked up too.

Both men were charged with one count of conspiracy to violate the Arms Export Control Act, which prohibits the sale of certain weapons to enemy countries such as Iraq. Hendron, a down-and-out arms dealer living in a modest El Toro condo and driving a 1964 Lincoln, was further charged with one count of making false statements to federal agents.

In a lengthy interview with The Times on Friday, Hendron denied any wrongdoing, and said he had documentation indicating the country buying the weapons was actually the Philippines and not Iraq.

Lah and his attorney could not be reached for comment.

“I was set up by the U.S. government,” Hendron said. “I was used because I can penetrate into high-level government ministries in Russia, Bulgaria and Poland . . . it was a sting operation of which I became a victim.”

He says it is still a mystery to him how he ever got involved in all of this.

Hendron claims he had not brokered an arms deal in six years and says his latest business effort was selling a sewage treatment plant for Saipan.

Nonetheless, he says a man identifying himself as Joe Kennedy had called him and eventually persuaded him to put together an arms deal with his East Bloc contacts.

Hendron--who now says Kennedy is a U.S. Customs agent--said Kennedy told him beginning in February, 1991, that the weapons would be sold to the Philippines.

Under nearly half a century of Communist rule, Eastern European countries had earned sizable sums of money by selling their weapons to countries such as Iran, Iraq and Libya, among others.

Once the Cold War officially ended last year, the former East Bloc nations were pressured by the United States and its allies to curtail those sales in exchange for help in reviving their crumbling economies.

Hendron’s company, International Business Center, has an office in Warsaw, Poland, and he claims to have developed relationships over the years with 645 arms dealers, many of them doing a brisk business in East Bloc weapons.

U.S. undercover agents told Hendron earlier this year that they wanted to meet the East Bloc officials face-to-face, so he arranged a March 6-10 conference at the Frankfurter Hoff Hotel.

There, on the hotel’s second floor, the Eastern European officials began discussing the logistics of the deal with U.S. agents, Hendron said. During those meetings, Hendron claims, U.S. agents for the first time indicated that the weapons they wanted were really bound for Iraq and not the Philippines.

He said the former East Bloc officials had expressed surprise because they had previously received Filipino paperwork for the weapons.

“These officials had to make a decision right there in Germany if they wanted to do the deal or not,” he said. He added that they ultimately decided to ignore the fact that the weapons were going to Iraq because they believed no one could possibly get them into that country. Iraq is currently locked in by a U.S.-imposed naval and air blockade.

“We listened to what they had to say, and mentally we thought it was hilarious,” he said. “You can’t get arms into Iraq. As far as I was concerned what they wanted to do with the arms was their business.”

For several months, U.S. agents had also been demanding increasingly sophisticated weaponry--climaxing with the request in Frankfurt for a nuclear bomb.

Hendron says the Eastern European officials, who had previously been approached about uranium samples and Krytron triggering devices for atomic bombs, never intended to sell the U.S. agents nuclear weapons, but agreed to do so in order to keep the deal for conventional arms alive.

“The Russian government and I put on a charade,” Hendron said. “We said we would deliver the (nuclear weapons). If that’s what they wanted to hear, we’d tell them . . . just to keep the other deals going.”

Hendron, who was briefly jailed in New York and released after posting $250,000 bail, is specifically accused of conspiring to import 105,000 AK-47 automatic assault rifles into the United States without the required licenses.

He is also charged with making false statements in January to U.S. Customs officials by saying that a sample shipment of 100 AK-47s that arrived in New York was “technical equipment.”

According to a five-page federal complaint, Hendron negotiated the sale of a virtual arsenal with two undercover Customs agents for eight months beginning in February, 1991.

The complaint states that during these meetings, an undercover agent told Hendron that the munitions would travel through the United States on their way to Iraq. Hendron allegedly said he would supply them documents showing that the Philippine government had sanctioned the arms sale to hide the true destination of the arms.

In January, Hendron met again with the undercover agents and sent the sample shipment of AK-47s from Bulgaria to New York’s Kennedy Airport through Rotterdam, the Netherlands. The government alleges that the bill of lading presented to Customs officials falsely described the shipment as “10 wooden cases, technical equipment.” The bill of lading was dated Nov. 30, 1991.

Hendron maintains that there was never any intention to import the AK-47 rifles into the United States. At Kennedy Airport, he contends, the sample cache was supposed to be transferred to another plane bound for the Philippines or put into storage until they could be shipped. He claims to have the appropriate paperwork allowing the weapons to be transferred or stored.

Regarding his charge of making false statements to federal agents, Hendron says Bulgarian officials made out the bill of lading in question and that he was not involved with that paperwork in any way.

“In the arms business you never clearly label what your shipments are,” Hendron said. “Arms makers always mark them technical equipment.”

Hendron is facing up to 10 years in prison and could be ordered to pay $500,000 in fines if convicted.

Lah, his alleged accomplice, is facing a maximum penalty of five years in prison and $250,000 in fines. He allegedly provided Hendron with $43,000 to buy the sample shipment of AK-47 rifles.

Hendron said Lah put up the money believing the guns were bound for the Philippines, which receives regular and legal arms shipments from the United States.

He had never done business with Lah before, he said, but turned to him to help finance the arms deal.

“Down in Newport Beach, you just network if you want money. I went through 20 people before (Lah) said, ‘Hey, I’m kind of interested,’ ” Hendron said.