A smelting company and its vice president have admitted attempting to illegally sell missile parts to China instead of melting them into ingots as they agreed when bidding on the scrap.
The parts, including components of the missile guidance system, never reached China. Customs agents discovered them in a shipping container at a New Jersey port in March 2004, according to documents filed on Tuesday in US District Court.
Even though the missile bodies and control sections of the radar-guided AIM 7-F Sparrows did not include explosives, the "military surplus items were still of notable intelligence value to other countries, and prohibited from export without a license from the US Department of State," the Defense Department warned bidders for the scrap.
Yale Dorfman, president and co-owner of State Metal Industries Inc, of Camden, pleaded guilty on behalf of the company to violating the Arms Export Control Act.
Under a plea agreement, the company is to pay a US$250,000 fine and face three years of probation, said Assistant US Attorney Judith Germano, who prosecuted the case.
Company vice president Michael Dorfman, who submitted the bid in April 2003 and certified the company would not sell the scraps outside the US, pleaded guilty to making false statements, which carries up to five years in prison and a US$250,000.
According to court documents, Dorfman agreed to sell the parts to a company owned, in part, by the Chinese government. He had the parts loaded into a shipping container, with key components put in the missile's nose, placed farthest from the container's door.
The name of the Chinese company was not made public, and officials declined to say how much it agreed to pay for the missile parts.
The guidance system was found largely intact in the container, with 192 parts, said James Murawski, resident agent in charge of the Defense Criminal Investigative Service in New Jersey.
"Weapons technology leaving the country is a significant concern," Murawski said, noting Sparrow missiles can be fired from fighter aircraft and naval vessels.
William Robertson, a lawyer for the company, said it had an unblemished record for 50 years.
"We consider it a very unfortunate circumstance and have taken steps to ensure it won't happen again," Robertson said.
Sentencing was set for Sept. 28 by US District Judge Jose Linares.
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