Federal Authorities Close Spy Factory Chain

Federal authorities shut down Spy Factory, the nation’s largest chain of “spy shops,” after the company and its owner pleaded guilty to smuggling and selling illegal bugging and wiretapping devices. The San Antonio-based chain was closed shortly after a plea hearing in a Manhattan federal court at which U.S. District Judge Sonia Sotomayor ordered Spy Factory and all of its assets forfeited. The U.S. Attorney’s office said that federal agents closed Spy Factory’s headquarters and padlocked its 11 stores while its investigation was continuing. Spy Factory executives pleaded guilty to 69 counts of money laundering, smuggling, selling illegal wiretapping and bugging devices and conspiracy between 1989 and 1995. The company’s owner, Ronald Kimball, a former Drug Enforcement Administration agent who founded Spy Factory, pleaded guilty to three counts of conspiracy to possess bugging and wire-tapping devices; using false statements to import these devices; and smuggling the devices from Japan. He faces the possibility of up to 63 months in prison and fines of $750,000. Kimball also agreed to forfeit about $2.33 million--the proceeds from Spy Factory’s sales of thousands of illegal bugging devices.