Virginia-based Wavelab pleaded guilty today to charges that it exported 2,400 microwave power amplifiers to China without the required licenses from the Bureau of Industry and Security (“BIS”). The company also agreed to forfeit the $85,000 it was paid for the amplifiers. Sentencing is scheduled for June 6, and the Court could impose additional fines.

The company’s website, which defaults to Chinese but is also available in English, lists 6 microwave amplifiers as its product line. Based on the spec sheets for these six products, it appears that they aren’t covered by ECCN 3A001.b.3 or 3A001.b.4, the two available classifications for microwave amplifiers. But the website also suggests that the company will custom produce microwave amplifiers for its customers, so it seems likely that such custom amplifiers were involved.

The company admitted in its plea agreement that it knew that the amplifier’s required licenses. Indeed, the ECCNs in question are relatively easy to apply and are based on the amplifier’s average output power, its frequencies of operation, its size and dimensions and its fractional bandwidth. (Fractional bandwidth is is the bandwidth of a device divided by its center frequency.) Although there are certainly ECCNs that pose difficulties in determining their applicability, these two are not among them.

An AP reporter that called the company for comment was told that everyone was “too busy” to talk and then hung up on.

ABOVE: Schematic of bifilar weight assembly for Black Hawk helicopters (Source).

After yesterday’s post on the acquittal in the Axion case, I decided to dig deeper to find out more about the drawing of the bifilar weight assembly that was exported to China and which was the basis of the prosecution. The defense claimed that the drawing was available on the Internet and was therefore public domain technical data not subject to licensing requirements. I wondered why, if that were the case, the prosecution was brought in the first place. The judge did not issue a written opinion in connection with the acquittal so I consulted the prosecution’s trial brief to get a better view of the evidence.

So, was the drawing that was exported available on the Internet? The answer appears to be “yes and no.” First, with a little more snooping around I did find schematics of the bifilar weight assembly, as you can see from the picture above this post. And, as you can see from the drawing, it appears to be, notwithstanding the imposingly technical name, a rather simple part.

Second, and here’s the rub, it doesn’t appear that the exported drawing itself was available on the Internet. Rather it seems to have been a drawing made by an Axion engineer based on one of the publicly available schematics.

Here’s the relevant section from the prosecution’s trial brief:

In September 2003, Latifi asked James Hopkins to edit the technical drawings for the bifilar weight assembly. Hopkins extracted information from the technical drawings and used a computer-aided design program to redraw the drawings. While working at Axion, Hopkins observed a brochure from a Chinese manufacturer for tungsten parts, which is the material used to make the bifilar weight assembly. Hopkins advised Latifi that the drawings might be subject to the export control laws. Latifi told Hopkins that it seemed too complicated to export the technical drawings outside the United States; instead, Latifi advised Hopkins that he would only distribute them to domestic companies.

This makes it easy to see the substance of the dispute between the prosecution and the defense. The drawing itself wasn’t literally available on the Internet, but if Hopkins didn’t make any material changes in the drawing, there’s also a sense in which it was available on the Internet. If, for example, Hopkins simplified a publicly-available drawing, would that make the revised drawing subject to export controls? And consider these questions in the context of a schematic for a part that is admittedly a rather simple mechanical part.

It seems to me that the judge in acquitting Axion and Latifi eschewed the literal notion that the drawing in question must have been available on the Internet rather than simply have been based on a drawing available on the Internet.

An interesting article in yesterday’s edition of The Birmingham News provides some further details on the unsuccessful prosecution of an Iranian-American defense contractor in Huntsville that was the subject of a previous post on this blog. As we noted in that post, the prosecution’s case collapsed when it was revealed that one of the prosecution’s chief witnesses had pleaded guilty to forging checks from the company that she was now accusing of export violations.

But that’s not all that sank the prosecution. According to article in The Birmingham News, the drawing of the Black Hawk that had been sent to China was apparently available on the Internet:

The Black Hawk drawing Alex Latifi was accused of sending to China also backfired on the government. A prosecution witness conceded that it wasn’t marked with customary warnings barring it from being sent to trading partners subject to arms control laws. And the argument by Latifi’s lawyers that the Black Hawk plans were in the public domain, which would exempt them from certain arms-control provisions, dogged the prosecution.

“Hang on, I have not heard about that before,” trial judge Johnson said as Alex Latifi lawyer James Barger cross-examined a government witness on the trial’s fifth day. “These drawings are on the Internet?”

We’ll have to take this claim at face value, although I have to say that I couldn’t find detailed schematics of the Black Hawk on the Internet. I found some indication, however, that Sikorsky may once have made certain schematics available that way, but these have since disappeared from the Sikorsky website (WARNING: annoying audio at link). But if those documents were public domain as alleged, it is hard to say why the prosecution filed the case.

The defense lawyers, however, are keeping the government’s feet to the fire even after the acquittal by filing a motion under the Hyde Amendment (18 U.S.C. § 3006A Note).

[The] lead lawyer, Henry Frohsin of Birmingham’s Baker, Donelson, Bearman, Caldwell & Berkowitz, has filed a claim for compensation from the government called a Hyde motion. It’s based on a 1997 law that allows acquitted federal criminal defendants to argue the Justice Department engaged in wrongful prosecution and collect whatever money they spent on their legal defense. …

Frohsin said … “If this doesn’t qualify as a vexatious, misguided prosecution, then nothing will.”

(As full disclosure, I was interviewed by the Birmingham News reporter and am quoted in the article.)