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Criminal Conviction for Exporting Tech

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By David Perera March 27, 2007

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The Justice Department today sealed its first criminal conviction of a major defense contractor under a law that forbids companies to export sensitive military technology, and collecting a $100 million fine from the company for doing so, according to a Justice Department press release.

For violating the Arms Export Control Act, ITT Corp., a leading manufacturer of night-vision equipment for the U.S. military, will pay a $2 million fine, will forfeit $28 million to the federal government, and must pay an additional $50 million or invest that amount in research and development of new advanced night-vision technology. ITT also will pay a $20 million fine to the State Department.

The company was charged with sending classified technical specifications to night-goggle component manufacturers in Singapore, the People’s Republic of China and the United Kingdom. ITT also lost track of “numerous pieces of state-of-the-art night vision equipment” and then attempted to mislead the State Department, according to Justice.

As a result of the misleading statements, ITT paid an $8 million penalty in 2004, but did not admit any wrongdoing. This time, however, Justice says ITT will consent to a plea agreement to be filed in U.S. District Court in Roanoke, Va., in which company officials plead guilty to one count each of exporting defense articles without a license and omission of statements of material facts in arms exports reports.

U.S. attorneys argued that U.S. night-vision technology is superior to other nations' technology, giving it "an enormous advantage on the battlefield," and sending the technology overseas "threatens our national security in the most direct way." To read what advancements in night-vision-goggle technology that a U.S. company has made, click on "Night-Vision Goggles Now in Color."

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