Donald Wayne Hatch, the owner of Rigel Optics, an online distributor of Russian night vision equipment, entered into a plea agreement yesterday in connection with an indictment that alleged that he had illegally exported night vision equipment without a license. Hatch had been the subject of a 14-count indictment accusing him, inter alia, of violations of the Arms Export Control Act. Under the plea agreement, the government would drop 13 of the 14 counts in the indictment and Hatch would plead guilty to the one remaining count, which alleged that he made misrepresentations to the government in violation of 18 U.S.C. § 1001(a)(2). At the same time, Rigel Optics entered into a plea agreement under which, in exchange for the government dropping the remaining counts in the indictment against Rigel, Rigel would plead guilty to one count of violation of the Arms Export Control Act.

The plea agreement for Hatch sets forth the factual predicate for his plea and describes two exports of generation 2 night vision rifle scopes by Hatch. At his instruction, a shipping employee entered the notation “NLR” — or “No License Required” — on the Shipper’s Export Declaration (“SED”) filed in connection with the exports, even though a license from the Directorate of Defense Trade Controls (“DDTC”) was required.

To support a violation of 18 U.S.C. § 1001, the misrepresentation must have been with knowledge that it was false. The only factual predicate for knowledge by Hatch that the NLR notation was false is an allegation that the Office of Export Enforcement (“OEE”) of the Bureau of Industry and Security (“BIS”) sent Hatch a letter:

In November, 2002, the Department of Commerce, BIS, OEE, sent a letter via U.S. certified mail to the attention of Mike Hatch c/o Rigel Optics at 1510 Ninth Street, DeWitt, Iowa. The letter advised that the night vision scopes sold by Rigel Optics were subject to the export licensing authority of the Department of State, Office of Defense and Trade Control (DTC). The letter further instructed Rigel Optics to cease exporting all night vision rifle scopes until the rifle scopes were properly classified by the Department of State, and any applicable export licenses had been received.

Oddly, there is no allegation that Hatch signed for or read the letter or even that the certified mail receipt was returned to OEE. Nor does the plea agreement allege that Hatch mislabeled the exported scopes — an oft-cited and usually reliable indicium of knowledge and criminal intent. Instead, all we have is a letter mailed to him saying that the rifle scopes required DDTC licenses. It’s not clear why no agents visited Mr. Hatch and directly informed him of the export requirement, a more common practice used to establish criminal intent by defendants for exports after the visit.

UPDATE: The Associated Press report on Hatch’s and Rigel’s plea agreements can’t seem to get things right, referring to the “Arms Exportation Control Act” and, better yet, the “U.S. Missions List.” Don’t reporters at the AP have access to Google?

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