UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA,
v.
ALEXANDER DARICHEV,
a/k/a Alexander Daricev,
ALEKSANDR POGREBEZSKIJ,
a/k/a Alexander Progrebovsky,
a/k/a Alexander Porgrebeshski,
Defendants.

MAGISTRATE JUDGE DUBE

CASE NO.
18 U.S.C. §371
22 U.S.C. §2778(a)(1), (b)(2),(c)
18 U.S.C. §545
18 U.S.C. §1956(a)(2)(A), and (h)
18 U.S.C. §2
22 CFR § 121.1, 121.16, 123.1,
123.3, 127.1(a)(2)) and (3)
27 CFR § 178.112, 179.11, 179.111

Filed 97 July 10 PM 5:18
Carlos Juenke
Clerk U.S. Dist. Ct.
S.D. of Fla-Miami

INDICTMENT

This indictment concerns an effort to carry out and conceal a scheme to illegally import into

the United States Bulgarian-manufactured defense articles, to wit, Bulgarian-manufactured portable anti-aircraft missile systems including Strela 2M, Strela 3M, and Igla 1E designs. The value of the proposed contracts related to the scheme totaled $3,200,000.00.

These activities violated United States laws which control the importation into the United

States of Munitions List articles having either a use or a potential use in military applications. A principal purpose of these laws is to provide accurate and truthful information to the United States to allow departments of the United States government to monitor and control the use of defense articles, in furtherance of United States foreign policy and national security. The purpose of the violations was to make profits by brokering the sale of Bulgarian origin defense articles notwithstanding the lack of proper review and informed approval by United States authorities.

At all times material to this Indictment:

1. Pursuant to the Arms Export Control Act, Title 22, United States Code, Section 2778, and in furtherance of the security and foreign policy interests of the United States, the United States restricts the importation of arms, munitions, implements of war and defense articles into the United States.

2. The regulations promulgated under the Arms Export Control Act which govern such imports are entitled the International Traffic in Arms Regulations (ITAR), Title 22, Code of Federal Regulations, Sections 120-130.

3. The ITAR contains a list of defense articles and defense services which are subject to control by these regulations called the United States Munitions List, Title 22, Code of Federal Regulations, Section 121.1.

4. The Department of State regulates the temporary import of defense articles. Any person who intends to export or to import temporarily a defense article must obtain the approval of the Office of Defense Trade Controls prior to the export or temporary import. A license (DSP-85) issued by the Office of Defense Trade Controls is required for the temporary import and subsequent export of classified defense articles.

5. In order to obtain a license to permanently import a missile system, an importer must complete, under the penalties of perjury, and fee with the Director of the Bureau of Alcohol, Tobacco and Firearms, an Application and Permit for Importation of Firearms, Ammunition and Implements of War (Form 6).

6. Articles listed on the Munitions List all require the importer to also file entry documents with the United States Customs Service. The entry documents include the Entry Summary (CF- 7501), Invoice, Packing List, Country of Origin Declaration, Entry-Immediate Delivery (CF-3461) and appropriate Customs Bond.

7. The Russian-designed, Bulgarian-manufactured portable anti-aircraft missile systems, including the Strela-2M, Strela 3-M, and Igla designs, are designed for destroying low-flying visible airplanes, helicopters and other aircraft. The missiles are launched with the help of a launching mechanism for repeated use, by the gunner from the shoulder, in manual or automatic mode from a position that ensures visual scope of the airspace. Manufacturer's literature claims that the missiles can be launched from trenches, from positions on water, swampy areas, from the roofs of buildings, from armored vehicles, as well as from vehicles in a stopped position or moving at a speed of up to twenty kilometers per hour. These portable anti-aircraft missile systems are solely designed for military purposes and are classified as defense articles contained in the United States Munitions List, 22 CFR Part 121.1 Category IV.

8. At all times material to the allegations contained in this Indictment:

a. An undercover agent of the United States Customs Service (UC-1), represented himself to the defendants herein to be of Ukrainian descent, working on behalf of Colombian narcotics traffickers.

b. A local undercover police sergeant cross-designated by the United States Marshals

Service to enforce federal statutes and assigned to a Federal Task Force (UC-2), represented himself to the defendants herein to be of Russian descent, working on behalf of Colombian narcotics traffickers.

c. Phoenix Arms International, Amerieast, Global Enterprises of Miami, Inc., and Zodiac Inc., were front companies established by the United States Customs Service to facilitate an ongoing undercover investigation regarding the illegal importation of and trafficking in weapons of mass destruction and other Munitions List articles.

d. The defendant, ALEXANDER DARICHEV, was a Lithuanian national, who represented himself to be a broker of weapons and weapon systems with contacts in government agencies in Russia, Lithuania, Bulgaria and elsewhere.

e. The defendant, ALEKSANDR POGREBEZSKIJ, was a Lithuanian national, who represented himself to have contacts in Lithuania and Russia capable of procuring weapons and weapon systems.

f. ANGELO ZEINI, was a Cypriot owner of merchant vessels who offered the services of his vessel, the M/V Al Fares, to smuggle missile systems into the United States.

g. Armimex P.L.C., was a Bulgarian company, located at 1, Angel Kanchev Street, 1000 Sofia, Bulgaria. Arrnimex was in the business of manufacturing and trading in arms and other Munitions List articles, including portable anti-aircraft missile systems.

h. The Ministry of Defense, Republic of Lithuania was the Lithuanian government entity responsible for providing documents purported to be the end-user certificate for the anti-aircraft missile systems.

i. The Russian Academy of Natural Science, Section of Geopolitics and Security, Scientific Technical Centre Jupiter-Z was a Russian entity located at 197042, St. Petersburg, Krestovsky pr., 9, Russia, which provided assistance to the defendants herein, in locating and negotiating the source of weapons of mass destruction.

9. From on or about March 13, 1995, to on or about June 27, 1997, in the Southern District of Florida and elsewhere,

did knowingly and willfully combine, conspire and agree with each other and with other persons both known and unknown to the Grand Jury, to commit the following offenses against the United States, that is:

a. to knowingly and fraudulently import and cause to be imported into the United States certain merchandise, to wit, Bulgarian-manufactured portable anti-aircraft missile systems including Strela 2M, Strela 3M, and Igla 1E designs, contrary to law, in violation of Title 18, United States Code, Section 545.

b. to knowingly and willfully import and cause to be imported into the United States, certain defense articles, to wit, Bulgarian-manufactured portable anti-aircraft missile systems including Strela 2M, Stela 3M, and Igla 1E designs, contrary to law, in violation of Title 22, United States Code, Sections 2778(b)(2), (c), and 22, Code of Federal Regulations, Sections 121.1, 121.16, 123.1, 123.3, 127.1(a)(2) and (3).

10. It was part of this conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would offer to arrange for the purchase, distribution, shipment and importation into the United States of weapons of mass destruction to undercover United States Customs agents who represented themselves to be agents of a Colombian narcotics trafficking organization.

11. It was further part of this conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would direct the undercover agents to create front companies for the purpose of receiving the weapons systems, disguising the distribution of profits, laundering the profits from the sale of the weapons systems, bribing foreign officials and creating false documentation to facilitate the sale.

12. It was further part of the conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would offer to bribe foreign officials so that it would appear that

the missile systems were being purchased by the Lithuanian Ministry of Defense, when in truth and in fact, the weapons systems were being sold to undercover agents who represented that the weapons were for distribution in the United States and Colombia.

13. It was further part of the conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would accept payment of $50,000.00 for the purpose of purchasing two (2) sample surface to air missile systems.

14. It was further part of the conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would launder the $50,000.00 payment through an account held at Prudential Securities in the name of Alita Corporation.

15. It was further part of the conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would arrange for a cargo vessel to receive the weapon systems in Bulgaria and transport them to Puerto Rico.

16. It was further part of the conspiracy that ANGELO ZEINI, owner of the M/V Al Fares, would agree to send the Al Fares to pick up the missile systems in Bulgaria.

17. It was further part of the conspiracy that ANGELO ZEINI, would create false paperwork indicating that the shipment was not missile systems destined for Lithuania but machinery and general cargo destined for Puerto Rico.

18. It was further part of the conspiracy that defendants, ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, would offer to procure and broker the sale of tactical nuclear weapons upon the completion of the missile systems sale.

In furtherance of this conspiracy and to effect the objects thereof, at least one of the co-conspirators herein committed one or more of the following overt acts, in the Southern District of Florida and elsewhere:

19. On or about March 13, 1995, during an undercover meeting, defendant ALEKSANDR POGREBEZSKIJ asked UC-2 if he was interested in purchasing military equipment, including surface to air missile systems.

20. On or about September 29, 1995, during an undercover meeting, defendant ALEKSANDR POGREBEZSKIJ discussed with UC-1 and UC-2 the sale of surface to air missile systems and nuclear weapons.

21. On or about November 28, 1995, defendant ALEKSANDR POGREBEZSKIJ forwarded UC-1 and UC-2 a list of weapons available for purchase.

22. On or about April 13, 1996, defendant ALEKSANDR POGREBEZSKIJ requested that UC-1 and UC-2 travel to Russia in order to examine the weapons systems and meet with Russian officials.

23. From on or about June 3, through June 10, 1996, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV traveled to Miami, Florida, in order to meet with UC-1 and UC-2 and further discuss the sale of shoulder fired anti-aircraft missile systems and tactical nuclear weapons.

24. On or about July 10, 1996, defendant ALEXANDER DARICHEV faxed to UC-1 and UC-2 an application to open a corporation in the Isle of Mann to facilitate the sale of the missile systems.

25. On or about July 11, 1996, defendant ALEXANDER DARICHEV faxed to UC-1 and UC-2 a price list for anti-aircraft missile systems, including the Strela-2, Strela-3 and Igla designs.

26. On or about July 25, 1996, defendant ALEXANDER DARICHEV caused to be sent to UC-1 and UC-2 a fax communication containing a letter from the Ministry of National Defense, Republic of Lithuania, thanking Phoenix Arms International for "your kind offer to support Lithuanian Defense Forces with the donations of military equipment."

27. On or about October 3, 1996, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV met with UC-1 and UC-2 in London, England, in order to outline the entire transaction as it related to the sale and transportation of the missile systems.

28. On or about October 3, 1996, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV, discussed with UC-1 and UC-2 the necessity of opening bank accounts in the Isle of Mann, in order to facilitate the distribution of funds derived from the sale of missile systems.

29. On or about June 25, 1997, defendant ALEXANDER DARICHEV traveled to Miami, Florida, for the purpose of finalizing the sale and shipment of missile systems to UC-1 and UC-2.

30. On or about June 25, 1997, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV provided copies of shipping documents for the M/V Al Fares. The shipping documents indicated that the M/V Al Fares would be transporting fifteen (15) forty-foot containers of machinery and general cargo.

31. On or about June 26, 1997, ANGELO ZEINI, advised UC-I that the container with the missile

systems would be commingled with other containers in order to pass inspection at the Straits of Gibraltar.

32. On or about June 26, 1997, Anthony (LNU) advised UC-1 that he was the broker for Armimex in Bulgaria, and that he had arranged for the M/V A1 Fares to receive the "munitions" in Bulgaria.

33. On or about June 26, 1997, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV had an undercover meeting with UC-1 and UC-2 in Miami, Florida.

34. On or about June 26, 1997, during an undercover meeting, defendant ALEXANDER DARICHEV displayed to UC-1 and UC-2 a document purported to be an end-user certificate from the Republic of Lithuania, signed by and bearing the seal of Minister of Defense.

35. On or about June 26, 1997, during an undercover meeting, defendant ALEXANDER DARICHEV told UC-1 and UC-2 that upon delivery of the missile systems to Puerto Rico, the Lithuanian Ministry of Defense would issue a false letter indicating that Lithuania had received the missile systems.

36. On or about June 26, 1997, during an undercover meeting, defendants ALEKSANDR POGREBEZSKIJ and ALEXANDER DARICHEV explained to UC-I and UC-2 that if the missile systems were used, they could not be traced.

All in violation of Title 18, United States Code, Section 371.

Paragraphs 1-8 of Count I are incorporated herein by reference.

On or about December 20, 1996, to on or about December 26, 1996, in the Southern District of Florida and elsewhere,

did knowingly and willfully combine, conspire, confederate, and agree with each other to commit an offense against the United States, that is, to violate Title 18, United States Code, Section 1956(a)(2)(A).

It was the purpose and object of this conspiracy to knowingly transport, transmit, and transfer monetary instruments and funds, that is a wire transfer of U.S. funds in the amount of $49,800.00, from a place in the United States, that is, Palm Beach, Florida, through New York, New York, to and through a place outside the United States, that is, Vilnius, Lithuania, with the intent to promote the carrying on of specified unlawful activity, that is, smuggling goods into the United States, in violation of Title 18, United States Code, Section 545, and the Arms Export Control Act, Section 38(c),), in violation of Title 22, United States Code, Section 2778.

1. On or about December 23, 1996, defendant ALEKSANDR POGREBEZSKIJ did receive from UC-1 and UC-2, $50,000.00 in the form of a cashiers check drawn on Republic Bank, in order to facilitate the sale of missile systems.

2. On or about December 23, 1996, defendant ALEKSANDR POGREBEZSKIJ provided authorization and instructions to Prudential Securities, in West Palm Beach, Florida, for the transfer of $50,000.00, from West Palm Beach, Florida, through New York, New York to an account in Vilnius, Lithuania.

3. On or about December 26, 1996, defendant ALEKSANDR POGREBEZSKIJ caused $49,800.00 in U.S. funds to be transferred from Prudential Securities in New York, New York, to the Bank of Snoras, Vilnius, Lithuania.

All in violation of Title 18, United States Code, Section 1956(h).

From on or about December 20, 1996, to on or about December 26, 1996, in the Southern District of Florida, and elsewhere,

did knowingly and unlawfully transport, transmit, and transfer and caused to be transported, transmitted and transferred, monetary instruments and funds, that is a wire transfer of $49,800.00, in U.S. funds, from a place in the United States, that is Palm Beach, Florida, through New York, New York to and through a place outside the United States, that is Vilnius, Lithuania, with the intent to promote the carrying on of specified unlawful activity, that is smuggling goods into the United States.