Caby Family Members Charged with Violating IEEPA for Allegedly Sending Dual Use Items to Syria
By: Anne-Liese Heinichen
Ali Caby aka "Alex Caby", Arash Caby aka "Axel Caby", and Marjan Caby were arrested and charged on February 24, 2017 for violating the International Emergency Economic Powers Act (IEEPA) for allegedly exporting switches, indicators, transmitters and other articles that have both civilian and military use from the United States destined for Syria. Along with the Cabys, five employees out of the Sofia, Bulgaria-based office of AW-TRONICS are facing charges: Zhelyaz Andreev, Lyubka Hristova, Mihaela Nenova, Iskren Georgiev, and Ivan Sergiev; as well as Syrian Arab Airlines aka Syrian Air and three employees: Adib Zeno, Rizk Ali and Ammar al Mounajed.
A license is required for export of items listed on the Commerce Control List under 15 C.F.R. § 742.4, which states,
"it is the policy of the United States to restrict the export and reexport of items that would make a significant contribution to the military potential of any other country or combination of countries that would prove detrimental to the national security of the United States" 1. Additionally, 15 C.F.R. § 746.9 prohibits the export of all items (with the exception of food and medicine) on the Commerce Control List specifically to Syria
2.
The indictment alleges that from 2013 through 2015 the defendants evaded obtaining required licenses and mis-declared or provided incomplete export information for controlled goods purchased in the United States that were then shipped to AW-Tronics' Bulgaria office or to the United Arab Emirates, that were then subsequently re-exported to Syria. Destination/End Use Statements signed by AW-Tronics employees, at the apparent urging of AW-Tronics' management, listed the destination as "USA". The indictment additionally revealed that Marjan Caby, who was employed as an auditor who dealt with export compliance, informed employees that,
"NOTHING WILL BE SHIPPED TO CLIENTS IN THE MIDDLE FROM THE USA OFFICE. WE HAVE TO SEND TO BG THEN TO CLIENT. COUNTRIES: ISRAEL, IRAQ, EMIRATES, SYRIA, SAUDI ARABIA, LIBYA, YEMMEN, KUWAIT ETC…We will have are [sic] packages stopped by the US Customs and Border Control."3
Payments were allegedly processed through third parties to conceal payments between the co-conspirators, specifically through a travel agency based in the UAE.
In another instance, AW-Tronics' employees are charged with exporting a tactical air navigation accessory unit to China via their Bulgaria office from late 2014 through mid-2015 by again allegedly concealing the true destination of the ITAR-controlled product.
Ali Caby faces 13 counts punishable by a total maximum penalty of 50 years' imprisonment and $2.5 million in fines and as of the date of this article is being held at a Miami Federal Detention Center.
Arash Caby faces 13 counts punishable by a total maximum penalty of 60 years' imprisonment and $2.75 million in fines.
Marjan Caby faces 11 counts punishable by a total maximum penalty of 50 years' imprisonment and $2.25 million in fines.
Ali, Arash, and Marjan Caby's trials are scheduled for October 2, 2017 and are estimated to last 2-3 weeks.
The Cabys, including Catherine Caby aka Catherine Kafi-Keramati who is not named in the indictment, have owned and operated numerous companies in addition to AW-Tronics including but not limited to: Arrowtronic LLC, Aero Troniks LLC, aka Aerotroniks LLC, Dixie Air Parts Inc. and Factory Direkt LLC.
1Code of Federal Regulations, Title 15 Commerce and Foreign Trade, Subtitle B, Chapter VII, Subchapter C, Part 742, § 742.4, Bureau of Industry and Security, Department of Commerce.
http://www.ecfr.gov/cgi-bin/text-idx?SID=a2650ec55e1cd0d858d5162e911226c1&mc=true&node=se15.2.742_14&rgn=div8
2Code of Federal Regulations, Title 15 Commerce and Foreign Trade, Subtitle B, Chapter VII, Subchapter C, Part 746, § 746.9, Bureau of Industry and Security, Department of Commerce.
http://www.ecfr.gov/cgi-bin/text-idx?SID=a2650ec55e1cd0d858d5162e911226c1&mc=true&node=se15.2.746_19&rgn=div8
3United States of America vs. Ali Caby, Arash Caby, Marjan Caby, et. al., 16-20803 (2016)
On April 4, 2017 Military & Aerospace Electronics hosted a webinar sponsored by IEC Electronics Corporation titled, "Should Your Organization Be Concerned About DFARS 252.246.7008 and the Supply Chain Impact Regarding Obsolete and Counterfeit Components?".
If you were not aware of this educational opportunity or were unable to attend, the event is now available online and may be accessed by visiting:
www.militaryaerospace.com. Simply click on the "Webcasts" tab to access the Military & Aerospace Electronics webcast archive.
Topics Addressed:
- DFARS 7008 Introduction – Sourcing Electronics Flow Down
- Interpreting the term "Contractor Approved Supplier" (CAS)
- Qualification requirements for "Contractor Approved Suppliers"
- The three-tier supply chain model for sourcing electronic components
- Compliance to the DFAR regarding Inspection, Test, and Authentication (IT&A)
- Alternative Pathways for Independent Distributors through AS6081 Certification
- Corporate flow down, liability, and business risk
- Benefits of the new DFARS 7008
The archived webinar will be available for the next twelve months.