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Illegal Arms Export Scheme Implicates American Law Enforcement Officers

September 13, 2013

An investigation led in part by the U.S. Immigration and Customs Enforcement’s (ICE) arm of the Department of Homeland Security has resulted in the arrest of two brothers for conspiring to violate the Arms Export Control Act (AECA) through the export of high-powered firearms and firearms components from the United States to the Philippines.

According to the complaint, the defendants, Rex Maralit, a New York City police officer, and Wilfredo Maralit, a U.S. Customs and Border Protection officer assigned to Los Angeles International Airport, engaged in a four-year scheme to export defense articles designated on the United States Munitions List (“USML”), including semi-automatic rifles, a tactical sniper rifle, and assault rifles, without obtaining the requisite export licenses, in violation of 22 U.S.C. §  2778, and without approval of the United States Department of State, Directorate of Defense Trade Controls (“DDTC”), in violation of 22 C.F.R. §  123.1.  The complaint alleges that a third brother, Ariel Maralit, who resides in the Philippines, acted as an unlicensed distributor of the firearms, placing orders to his stateside siblings, and coordinating distribution of the weapons in the Philippines.    

Because 22 U.S.C. § 2778(c) provides for criminal penalties for willful violations of the section, at sentencing the defendants could face up to 5 years imprisonment on each charge, forfeiture, and a fine of up to $250,000. 

These arrests follow the criminal sentencing, less than two months ago, of a Florida man, Anthony Torresi, charged with unlawfully exporting night vision equipment which was designed to enable military ground troop personnel to conduct night operations.  As a result of the investigation led by ICE, it was uncovered that Torresi listed for sale on eBay and subsequently shipped the equipment to New Zealand, without a license, in violation of the AECA. 

All companies subject to regulation under the AECA or ITAR should be mindful of the potential criminal implications of violating certain international trade regulations and the increasing frequency with which government agencies have sought criminal sanctions for export violations.  Companies should periodically review their compliance programs to ensure thoroughness and proper implementation, and should have sufficient controls in place to identify and investigate potential export violations. 

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