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Assistant Secretary of Commerce for Export Enforcement Michael J. Garcia today imposed a $1.12 million administrative penalty on Thane-Coat, Inc., of Stafford, Texas. Thane-Coat's U.S. export privileges, as well as those of the company's president, Jerry Vernon Ford, and its vice-president, Preston John Engebretson, also were denied for a period of 25 years. The parties agreed to these penalties to settle allegations by the Bureau of Export Administration ("BXA") that Thane-Coat exported pipe coating material from the United States to Libya, through the United Kingdom, in violation of the Export Administration Regulations.
Assistant Secretary Garcia said, "The Department's action in this case demonstrates our strong commitment to enforcement and is an example of the penalty that one can expect for non-compliance with the Export Administration Regulations. Those who violate our export controls - especially controls on exports to countries that are state sponsors of terrorism such as Libya - can expect similar treatment."
BXA alleged that, between June 1994 and July 1996, Mr. Ford, Mr. Engebretson, Thane-Coat, Inc., and two other affiliated companies exported pipe coating material to the Libyan Government's Great Man-Made River Project in violation of U.S. export control laws. BXA charged Thane-Coat, Mr. Ford, and Mr. Engebretson with 112 violations of the Export Administration Regulations, including conspiracy, failing to obtain the required BXA export licenses, and making false representations on Shipper's Export Declarations.
Under the terms of the order approving the settlement agreement, Thane-Coat is required to pay $600,000 of the penalty within 90 days of the date of the order. Payment of the remaining $520,000 is suspended for two years and will be waived provided that Thane-Coat does not commit any violations during the two-year period.
On October 11, 2001, Mr. Ford and Mr. Engebretson pled guilty in U.S. District Court in Houston, Texas, to felony charges that they violated the International Emergency Economic Powers Act by exporting the pipe coating materials to Libya. Ford and Engebretson each received three years probation and each was required to forfeit property that previously had been seized by the government and was valued at $800,000.
Since May 5, 1997, Mr. Ford, Mr. Engebretson, and Thane-Coat, Inc. have been subject to a series of orders issued by BXA temporarily denying their export privileges. These temporary denial orders are superseded by the order approving the settlement agreement. In related cases, on July 12, 1999, the Department imposed a 20-year denial of export privileges on two of Thane-Coat's affiliates, Export Materials, Inc. of Stafford, Texas, and TIC Ltd., of Freeport, Bahamas, for their involvement in the conspiracy.
The Department of Commerce, through its Bureau of Export Administration, administers and enforces export controls for reasons of national security, foreign policy, nonproliferation, anti-terrorism, and short supply through the Export Administration Regulations. Criminal penalties and administrative sanctions can be imposed for violations of those regulations.
Assistant Secretary Garcia commended Special Agent Richard Modesette, from BXA's Dallas Field Office, who investigated the case with agents from the U.S. Customs Service.