[Federal Register Volume 71, Number 131 (Monday, July 10, 2006)]
[Notices]
[Pages 38843-38850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6022]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 05-BIS-14]


In the Matter of: Ihsan Medhat Elashi, a/k/a I. Ash; a/k/a Haydee 
Herrera; a/k/a Abdullah Al Nasser; a/k/a/ Samer Suwwan; a/k/a Sammy 
Elashi, Respondent; Decision and Order

    In a charging letter filed on July 29, 2005, the Bureau of Industry 
and Security (''BIS'') alleged that respondent Ihsan Medhat Elashi 
(``Ihsan'') committed 32 violations of the Export Administration 
Regulations (Regulations) \1\, issued under the Export Administration 
Act of 1979, as amended (50 U.S.C. app. Sec. Sec.  2401-2420) (the 
Act).\2\
---------------------------------------------------------------------------

    \1\ 15 CFR parts 730-774 (2006). The charged violations occurred 
from 1998 to 2002. The Regulations governing the violations at issue 
are found in the 1998 through 2002 versions of the Code of Federal 
Regulations (15 CFR Parts 730-774 (1998-2002)). The 2006 Regulations 
establish the procedures that apply to this matter.
    \2\ From August 21,1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which had been extended by successive Presidential Notices, 
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)), 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. Sec. Sec.  1701-1706) 
(``IEEPA''). On November 13, 2000, the Act was reauthorized by Pub. 
L. 106-508 (114 Stat. 2360 (2000)) and it remained in effect through 
August 20, 2001. Executive Order 13222 of August 17, 2001 (3 CFR, 
2001 Comp. 783 (2002)), which has been extended by successive 
Presidential Notices, the most recent being that of August 6, 2004 
(69 48763, August 10, 2004), continues the Regulations in effect 
under IEEPA.
---------------------------------------------------------------------------

    The charges against Ihsan are as follows:
    Charge 1 alleges that beginning in or about May 1998 and continuing 
through in or about February 2002, Ihsan conspired and acted in concert 
with others, known and unknown, to do or bring about acts that violate 
the Regulations. The purpose of the conspiracy was to export computer 
equipment and software, items subject to the Regulations and classified 
under Export Control Classification Numbers (``ECCN'') 4A994 and 5D002 
respectively, from the United States to Syria without the U.S. 
Department of Commerce licenses required by Section 742.9 of the 
Regulations, and to export computers and computer accessories to 
various destinations in violation of orders temporarily denying his 
export privileges.
    Charge 2 alleges that on or about August 2, 2000, Ihsan engaged in 
conduct prohibited by the Regulations by exporting or causing to be 
exported a computer, an item classified under ECCN 4A994, to Syria 
without the Department of Commerce license required by Section 742.9 of 
the Regulations.
    Charge 3 alleges that with respect to the export described above, 
Ihsan sold a computer with the knowledge that a violation of the 
Regulations was about to occur or was intended to occur in connection 
with the computer. At all relevant times, Ihsan knew or had reason to 
know that the computer in question required a Department of Commerce 
license for export to Syria, and that the required license had not been 
obtained.
    Charges 4-15 allege that on 12 occasions from on or about September 
17, 2001 through on or about February 5, 2002, Ihsan took action 
prohibited by a denial order by exporting computers, clothes, printers, 
strobes, network equipment, SCSI kit, and computer accessories, items 
subject to the Regulations, to Syria, Saudi Arabia, Jordan, and Egypt. 
Ihsan was denied his export privileges on September 6, 2001. See 66 FR. 
47,630 (September 13, 2001). The temporary denial order prohibited 
Ihsan from ``participat[ing] in any way in any transaction involving 
any commodity, software or technology (hereafter collectively referred 
to as ``item'') exported or to be exported from the United States that 
is subject to the [Regulations].''
    Charge 16 alleges that on or about October 12, 2001, Ihsan took 
action prohibited by a denial order by carrying on negotiations 
concerning a transaction involving computers, items subject to the 
Regulations, to Saudi Arabia. Ihsan was denied export privileges on 
September 6, 2001. See 66 FR 47,630 (September 13, 2001). The temporary 
denial order prohibited Ihsan from ``carrying on negotiations 
concerning * * * any transaction involving any item to be exported from 
the United States that is subject to the [Regulations].''
    Charges 17-29 allege that with respect to the 13 occasions listed 
in charges 4-16, Ihsan sold computers and computer accessories with 
knowledge that a violation of the Regulations was about to occur or was 
intended to occur in connection with the computers, clothes, printers, 
strobes, network equipment, SCSI kit, or computer accessories. At all 
relevant times, Ihsan knew or had reason to know that he was denied his 
export privileges, that authorization from the Department of Commerce 
was required for any export subject to the Regulations, and that such 
authorization had not been obtained.
    Charges 30-32 allege that on three of the occasions described in 
charges 4-15 above Ihsan took actions with the intent of evading the 
order temporarily denying his export privileges. Specifically, Ihsan 
continued to export or cause the export of computer accessories and a 
SCSI kit under the names Mynet.net, Kayali Corporation, and Samer 
Suwwan to disguise the fact that he was the exporter of the items.
    In a letter dated August 10, 2005, Ihsan answered the charging 
letter by denying any wrongdoing. Pursuant to a modified Scheduling 
Order issued by the Administrative Law Judge (ALJ), on March 16, 2006, 
BIS filed its Memorandum and Submission of Evidence to Supplement the 
Record. On March 27, 2006, Respondent filed his defense to the record. 
On April 28, 2006, BIS filed the Bureau of Industry and Security's 
Rebuttal to Respondent's Filing and Memorandum and Submission of 
Evidence to Supplement the Record.
    Based on the record, on June 5, 2006, the ALJ issued a Recommended 
Decision and Order in which he found that Ihsan committed 30 violations 
of the Regulations. Specifically, the ALJ found that Ihsan committed 
charges 1-11, 13-24, and 26-32. The ALJ found that BIS did not prove by 
a preponderance of the evidence charges 11 and 25. The ALJ recommended 
that Ihsan be assessed a $330,000 civil penalty and a denial of Ihsan's 
export privileges for fifty (50) years.
    The ALJ's Recommended Decision and Order, together with the entire 
record in this case, has been referred to me for final action under 
Section 766.22 of the Regulations. I find that the record

[[Page 38844]]

supports the ALJ's findings of fact and conclusions of law regarding 
the liability of Ihsan for charges 1-11, 13-24, and 26-32. I also find 
that the penalty recommended by the ALJ is appropriate, given the 
nature of the violations, the importance of preventing future 
unauthorized exports, the lack of mitigating circumstances, and Ihsan's 
total disregard for the denial order imposed upon him.
    Based on my review of the entire record, I affirm the findings of 
fact and conclusions of law in the ALJ's Recommended Decision and 
Order.
    Accordingly, it is therefore ordered,
    First, that a civil penalty of $330,000 is assessed against Ihsan, 
which shall be paid to the U.S. Department of Commerce within 30 days 
from the date of entry of this Order.
    Second, that, pursuant to the Debt Collection Act of 1982, as 
amended (31 U.S.C. Sec. Sec.  3701-3720E), the civil penalty owed under 
this Order accrues interest as provided and, if payment is not made by 
the due date specified, Ihsan will be assessed, in addition to the full 
amount of the civil penalty and interest, a penalty charge and an 
administrative charge.
    Third, that, for a period of fifty years from the date of this 
Order, Ihsan Medhat Elashi (a/k/a I. Ash, Haydee Herrera, Abdullah Al 
Nasser, Samer Suwwan, and Sammy Elashi), of Seagoville FCI, 2113 North 
Highway, Seagoville, Texas, 75159, and, when acting for or on behalf of 
Ihsan, his representatives, agents, assigns, and employees (``Denied 
Person''), may not, directly or indirectly, participate in any way in 
any transaction involving any commodity, software or technology 
(hereinafter collectively referred to as ``item'') exported or to be 
exported from the United States that is subject to the Regulations, or 
in any other activity subject to the Regulations, including, but not 
limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the Regulations, or in any other 
activity subject to the Regulations; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the Regulations, or in any other activity subject to the Regulations.
    Fourth, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Denied Person of the ownership, possession, or 
control of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby the Denied Person acquires 
or attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the Denied Person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and that is owned, possessed or controlled by the Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the Denied Person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Fifth, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the Denied Person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
this Order.
    Sixth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the Regulations where the only items 
involved that are subject to the Regulations are the foreign-produced 
direct product of U.S.-origin technology.
    Seventh, that this Order shall be served on the Denied Person and 
on BIS, and shall be published in the Federal Register. In addition, 
the ALJ's Recommended Decision and Order, except for the section 
related to the Recommended Order, shall be published in the Federal 
Register.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.

    Dated: June 29, 2006.
David H. McCormick,
Under Secretary for Industry and Security.

Instructions for Payment of Civil Penalty

    1. The civil penalty check should be made payable to: U.S. 
Department of Commerce.
    2. The check should be mailed to: U.S. Department of Commerce, 
Bureau of Industry and Security, Export Enforcement Team, Room H-
6883, 14th Street and Constitution Avenue, NW., Washington, DC. 
Attn: Sharon Gardner.

Recommended Decision and Order

Before:
    Hon. Peter A. Fitzpatrick, Administrative Law Judge, United 
States Coast Guard.
Appearances:
    Peter R. Klason, ESQ, Craig S. Burkhardt, ESQ, & Melissa B. 
Mannino, ESQ.
 For the Bureau of Industry and Security.
    Ihsan Medhat Elashi
 For Respondent.

II. Summary of Decision

    This case involves operations by Respondent, Ihsan Medhat 
Elashi,\1\ in his personal capacity, in his capacity as systems 
consultant for Infocom Corporation, and in his capacity as president 
of Tetrabal Corporation of Seagoville, Texas, to unlawfully export 
goods in violation of the Export Administration Act of 1979 (``EAA'' 
or ``Act'') \2\ and the Export Administration Regulations (``EAR'' 
or ``Regulations'').\3\ The EAA and the underlying EAR establish a 
``system of controlling exports by balancing national security, 
foreign policy and

[[Page 38845]]

domestic supply needs with the interest of encouraging export to 
enhance * * * the economic well being'' of the United States. See 
Times Publ'g Co. v. United States Dep't of Commerce, 236 F.3d 1286, 
1290 (11th Cir. 2001); see also 50 U.S.C. App. Sec. Sec.  2401-02.
---------------------------------------------------------------------------

    \1\ Two different spellings have been used for ``Elashi.'' Some 
documents, such as the Respondent's criminal indictment (Gov't Ex. 
1), use the spelling ``Elashyi.'' While other documents, such as the 
Respondent's Temporary Denial Order (Gov't Ex. 7), use the spelling 
``Elashi.'' To stay consistent, this Recommended Decision and Order 
will use the spelling ``Elashi'' throughout.
    \2\ 50 U.S.C. app. Sec. Sec.  2401-2420 (2000). The EAA and all 
regulations under it expired on August 20, 2001. See 50 U.S.C. app. 
Sec. Sec.  2419. Three days before its expiration, the President 
declared that the lapse of the EAA constitutes a national emergency. 
See Exec. Order. No. 13222, reprinted in 3 CFR at 783-784, 2001 
Comp. (2002). The President maintained the effectiveness of the EAA 
and its underlying regulations through successive Presidential 
Notices, the most recent being that of August 2, 2005 (70 FR 45,273 
(Aug. 2, 2005)). Courts have held that the continuation of the 
operation and effectiveness of the EAA and its regulations through 
the issuance of Executive Orders by the President constitutes a 
valid exercise of authority. See Wisconsin Project on Nuclear Arms 
Control v. United States Dep't of Commerce, 317 F.3d 275, 278-79 
(D.C. Cir. 2003); Times Publ'g Co., 236 F.3d at 1290.
    \3\ The EAR is currently codified in the Code of Federal 
Regulations at 15 CFR parts 730-774 (2006). The charged violations 
occurred from 1998 to 2002. The EAR governing the violations at 
issue are found in the 1998 to 2002 versions of the Code of Federal 
Regulations (15 CFR parts 730-774 (1998-2002)).
---------------------------------------------------------------------------

    Here, thirty-two violations of the EAR are alleged and the 
Bureau of Industry and Security, United States Department of 
Commerce (``BIS'' or ``Agency'') seeks denial of the Respondent's 
export privileges from the United States for a period of 50 years 
and a civil penalty in the amount of $352,000. This case was brought 
while Respondent was serving a 72-month sentence in Federal prison 
based, in part, on a finding of guilt to one count of conspiracy to 
violate the EAR. See United States v. Ihsan Elashyi, 3:02-CR-052-
L(05) (N.D. TX).
    Charge 1-3 in this administrative proceeding are identical to or 
are in connection with the conspiracy charge before the District 
Court to which Respondent was found Guilty and for which the court 
entered a judgment and sentence. These charges are found proved.
    Charges 4-16 in this administrative proceeding allege that 
Respondent acted on 13 occasions in violation of an export denial 
order. With respect to those 13 occasions, in Charges 17-29, BIS 
also alleges Respondent knowingly violated the EAR. Charges 4-29 are 
found proved, with the exception of Charges 12 and 25 which are 
found not proved. Charge 12 is found to be part of the same 
transaction as Charge 11 and Charge 25 is found to be part of the 
same transaction as Charge 24.
    Charges 30-32 in this administrative proceeding allege 
Respondent with taking action to evade a denial order. These charges 
correspond to the facts set forth in Charges 9, 10, and 15. These 
charges are found proved.
    No hearing was requested and there was consent to the making of 
the decision on the record. BIS submitted substantial and probative 
evidence in support of the charges. Respondent did not address the 
validity of the evidence and instead relied upon affirmative 
defenses. These defensives were found to be without merit. In lieu 
of the numerous violations, a Denial Order of 50 years and civil 
penalty of $330,000 is recommended.

III. Preliminary Statement

    On July 29, 2005, BIS \4\ filed a Charging Letter against 
Respondent Ihsan Medhat Elashi (``Elashi'' or ``Respondent'') 
(Docket No. 05-BIS-14) alleging thirty-two violations of the EAR. 
The charges alleged the following:
---------------------------------------------------------------------------

    \4\ Through an internal organizational order, the Department of 
Commerce changed the Bureau of Export Administration (BXA) to Bureau 
of Industry and Security (BIS). See Industry and Security Programs: 
Change of Name, 67 FR 20630 (Apr. 26, 2002). Pursuant to the Savings 
Provision of the order, ``Any actions undertaken in the name of or 
on behalf of the Bureau of Export Administration, whether taken 
before, on, or after the effective date of this rule, shall be 
deemed to have been taken in the name of or on behalf of the Bureau 
of Industry and Security.'' Id. at 20631. BXA issued the Temporary 
Denial Order which will be referenced later in this decision.
---------------------------------------------------------------------------

    Charge 1 alleged that on or about May 1998, to on or about 
February 2002, Respondent violated Section 764.2(d) of the EAR by 
conspiring to (1) export computer equipment and software to Syria 
without the required U.S. Department of Commerce license and (2) to 
export computer and computer accessories to various destinations in 
violation of an order temporarily denying his export privileges.
    Charge 2 alleged that on or about August 2, 2000, Respondent 
violated Section 764.2(a) of the EAR by exporting or causing to be 
exported a computer to Syria without the required U.S. Department of 
Commerce license.
    Charge 3 alleged that in respect to the export made in Charge 2, 
Respondent violated Section 764.2( e) of the EAR by selling a 
computer with the knowledge that a violation of the EAR would occur.
    Charges 4-15 alleged that on twelve occasions on or about 
September 17, 2001, to on or about February 5, 2002, Respondent 
violated Section 764.2(k) of the EAR by taking action prohibited by 
a denial order by exporting items subject to the EAR, to include 
computers, clothes, printers, strobes, network equipment, SCSI kit, 
and computer accessories. The schedule of the alleged violations, 
setting out the dates, destinations, commodity exported, Export 
Control Classification Number (ECCN), and invoice values was 
attached to the Charging Letter.
    Charge 16 alleged that on or about October 12, 2001, Respondent 
violated Section 764.2(k) of the EAR by taking action prohibited by 
a denial order by carrying on negotiations concerning a transaction 
subject to the EAR, to include the export of computers.
    Charges 17-29 alleged that in respect to thirteen occasions 
described in Charges 4-16, Respondent also violated Section 764.2(e) 
of the EAR by selling computers and computer accessories with 
knowledge that a violation of the EAR was about to occur or was 
intended to occur.
    Charges 30-32 alleged that in respect to Charges 9, 10, and 15, 
Respondent violated Section 764.2(h) of the EAR by taking actions 
with the intent of evading the order temporarily denying his export 
privileges.
    On August 5, 2005, this case was placed on the docket by the 
U.S. Coast Guard Administrative Law Judge Docketing Center pursuant 
to the Interagency Agreement between BIS and the U.S. Coast Guard.
    On August 10, 2005, Respondent submitted a ``response'' to the 
Charges. This response was written by Respondent without aid of 
counsel. Respondent did not refer to this response as an ``Answer,'' 
however, since the response addresses the Charges, it will be 
considered Respondent's Answer. In the Answer, Respondent claims he 
is not subject to the EAR because he only exported ``publicly 
available'' technology and software. Respondent also believes the 
criminal penalties he has received, which resulted from the same 
facts set forth in the Charges, should serve as sufficient 
``justice'' and any further action would constitute double jeopardy. 
Respondent notes that he is appealing these criminal convictions 
since the jury verdict was based on ``confusions.'' Respondent 
claims to have inadequate financial resources to hire a lawyer and 
requested a court appointed lawyer.
    On September 15, 2005, the undersigned was assigned to preside 
over this case by order of the Coast Guard Chief Administrative Law 
Judge.
    On September 30, 2005, a ``Briefing Schedule Order'' was issued 
setting forth a proceeding without a hearing. Neither BIS nor 
Respondent made a written demand for a hearing, as such, there was 
consent to the making of the decision on the record. See 15 CFR 
Sec.  766.6(c) and 766.15. This Order also denied Respondent's 
request for a court appointed lawyer in view of the fact that this 
proceeding is not a criminal matter, but is a civil matter involving 
the imposition of administrative sanctions.
    On October 6, 2005, BIS submitted a Request for Amendment to 
Scheduling Order. BIS requested a delay in order to allow the 
sentencing in Respondent's related criminal case to occur before BIS 
was required to submit their supplement to the record. On October 
13, 2005, this Request was granted.
    On January 20, 2006, BIS submitted a second Request for 
Amendment to Scheduling Order. BIS requested this amendment as 
Respondent's sentencing date in the related criminal conviction had 
been delayed. On January 23, 2006, this Request was granted. It was 
ordered that no later than March 17, 2006, BIS shall file all 
evidence in support of the charges; no later than April 17, 2006, 
the Respondent shall file all evidence in defense of the charges; 
and no later than May 1, 2006, BIS shall file its rebuttal to the 
Respondent's evidence.
    On March 16, 2006, BIS submitted its Memorandum and Submission 
of Evidence to Supplement the Record. On March 27, 2006, Respondent 
filed his defense to the evidence. On April 28, 2006, BIS filed the 
Bureau of Industry and Security's Rebuttal to Respondent's Filing 
and Memorandum and Submission of Evidence to Supplement the Record.

IV. Applicable Statutes and Regulations

    The export violations in this administrative proceeding were 
alleged to have occurred between 1998 and 2002. Thus, the export 
control laws and regulations in effect between 1998 and 2002 govern 
resolution of this matter. Those laws and regulations are 
substantially similar to the current export control laws and 
regulations. See Attachment A for applicable statutes and 
regulations.

V. Recommended Findings of Fact & Recommended Ultimate Findings of Fact 
and Conclusions of Law

[Redacted Section]

VI. Discussion

    BIS has sought to prove Respondent committed numerous violations 
of the EAR through the submission of extensive documentary evidence. 
Respondent has not challenged the validity of this evidence; 
instead, Respondent's defense rests upon several broad themes. 
First, Respondent claims that the items he exported were

[[Page 38846]]

``publicly available'' and therefore not ``subject to the EAR.'' 
Second, Respondent believes the order temporarily denying his export 
privileges had no ``force of law'' as applied to him. Third, 
Respondent makes a plea asking for leniency, as he believes any 
further penalties in light of the related criminal convictions would 
not constitute ``true justice'' and would equate to double jeopardy. 
These arguments by Respondent have been rejected and the evidence 
submitted by BIS has been found to adequately support most of the 
charges.

A. Exports Not Subject to the Regulations

    Respondent's first defense states that no violation of the EAR 
occurred because he ``was not subject to [the] E.A.R. as long as the 
technology to be exported [was] publicly available.'' (Defense,\5\ 
at 1). If the items exported were not subject to the EAR, then no 
violations of the EAR could have occurred. BIS objects to the use of 
this defense as untimely since Respondent did not raise this 
affirmative defense in the Answer. (Rebuttal,\6\ at 3-4). I find the 
timeliness objection to be unpersuasive. This defense was addressed 
in Respondent's Answer. Respondent states, ``I would like to point 
out the fact that the Export Administration [R]egulations clearly 
states that if the [t]echnology or software I am exporting or re-
exporting are publicly available, then I am not subject to the 
`E.A.R.' All my export[s] were publicly available and none required 
a license.'' (Answer,\7\ at 2). Accordingly, BIS's argument that 
Respondent's defense is untimely is rejected.
---------------------------------------------------------------------------

    \5\ ``Defense''--indicates Respondent's March 27, 2006 letter 
responding to BIS's submission of evidence.
    \6\ ``Rebuttal''--indicates BIS's April 28, 2006 filing titled 
the Bureau of Industry and Security's Rebuttal to Respondent's 
Filling and Memorandum and Submission of Evidence to Supplement the 
Record.
    \7\ ``Answer''--indicates Respondent's August 10, 2005 letter 
responding to Charges BIS filed against Respondent.
---------------------------------------------------------------------------

    While Respondent raised this defense in a timely manner, it is 
nevertheless unpersuasive. Publicly available technology and 
software are generally not subject to the EAR. See 15 CFR 
734.3(b)(3). However, BIS did not charge Respondent with exporting 
technology or software,\8\ instead Respondent was charged with 
exporting commodities--``[a]ny article, material, or supply except 
technology or software.'' 15 CFR 772.1. A commodity is a physical 
item, while technology is ``information'' and software is 
``programs.'' Id. Unlike technology and software, commodities have 
no public availability exception. Since Respondent is charged with 
exporting commodities, Respondent's exports are not excluded from 
the EAR under the public availability exception.
---------------------------------------------------------------------------

    \8\ Charge 1 charged Respondent, in part, with conspiracy to 
export software, but this charge was connected to the export of an 
entire computer system to Syria (the software was loaded onto the 
computer). The computer system had no publicly availability 
exception and Respondent was criminally convicted of conspiracy and 
found to have acted in violation of the EAR in connection with this 
export. United States of America v. Ihsan Elashyi, Case No. 3:02-CR-
052-L(05) (N.D. TX).
---------------------------------------------------------------------------

B. Validity of the Temporary Denial Order

    Respondent asserts that the Temporary Denial Order \9\ (IDO) 
issued against Respondent ``had no force of law on Ihsan Elashyi and 
Tetrabal.'' (Defense, at 2). If the TDO was not in effect, 
Respondent would not be in violation of Charges 4-32, since each 
charge contains the common factual element of acting in violation of 
a TDO. BIS objects to the use of this defense as untimely since 
Respondent did not raise this affirmative defense in the Answer. 
(Rebuttal, at 3-4). I find the timeliness objection to be 
unjustified. Respondent is a pro se petitioner and his defenses will 
be less sophisticated than an experienced attorney. As such, if a 
pleading might possibly have merit, ``the long-standing practice is 
to construe pro se pleadings liberally.'' Hill v. Braxton, 277 F.3d 
701, 707 (4th Cir. 2002); see Haines v. Kerner, 404 U.S. 512,520 
(1972). Respondent asserts \10\ that his Answer addresses the issue 
of an invalid TDO. In the Answer, Respondent writes he is appealing 
the criminal convictions because his conviction was based on 
``confusions.'' (Answer, at 2). Respondent clarifies these 
``confusions'' as being the false testimony Respondent believes was 
given in his trial to justify the TDO. (See Defense, at 2). 
Respondent believes these ``confusions'' will invalidate the TDO. 
Id. Taking into consideration that this is a pro se pleadings, I 
find that Respondent addressed the affirmative defense of an invalid 
TDO in a timely manner.
---------------------------------------------------------------------------

    \9\ On September 6, 2001, the Assistant Secretary of Commerce 
for Export Enforcement issued an order that denied the export 
privileges of Respondent for a period of 180 days. See 66 Fed. Reg. 
47630 (September 13, 2001).
    \10\ ``My letter [Answer] on August 10, 2005 did not in no way 
say that Ihsan Elahyi generally denied all of the charges, but 
rather it said that Ihsan EIashyi received a sever punishment for 
exporting while under a `TDO' that had no force of law on him.'' 
(Defense, at 2).
---------------------------------------------------------------------------

    While Respondent raised this defense in a timely manner, it is 
nevertheless unpersuasive. Respondent claims the TDO ``had no force 
of law on Ihsan Elashyi or Tebrabal.'' Id. However, Respondent 
previously pled guilty to one count of exporting an item in 
violation of this TDO. See United States of America v. Ihsan 
Elashyi, Case No. 3:02-CR-033-L(01) (N.D. TX). Such a pleading 
forecloses his ability, via the doctrine of collateral estoppel, to 
challenge the validity of the TDO in this administrative proceeding.
    The doctrine of collateral estoppel precludes a party from 
disputing the facts in an administrative proceeding that were 
adversely decided against that party in a preceding criminal 
proceeding.\11\ Amos v. Commissioner, 360 F.2d 358 (4th Cir. 1965); 
cf. Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 568 
(1951) (criminal conviction has been given collateral estoppel 
effect in a subsequent civil proceeding); United States v. Podell, 
572 F.2d 31, 35 (2d Cir. 1978); see also United States v. Utah 
Construction & Mining Co., 384 U.S. 394 (1966) (collateral estoppel 
applies in administrative proceedings). To prevail, a party seeking 
to invoke the doctrine of collateral estoppel must establish: (1) 
The issue sought to be precluded is the same as that involved in the 
previous action; (2) the issue was actually litigated; (3) the issue 
was determined by a final, binding judgment; and (4) the 
determination of the issue was essential to the judgment. Grella v. 
Salem Five Central Sav. Bank, 42 F.3d 26, 30 (1st Cir. 1994); 
Central Hudson Gas & Elec. Corp. v. Empresa Naviera Santa, 56 F.3d 
359, 368 (2d Cir. 1995).
---------------------------------------------------------------------------

    \11\ This discussion of collateral estoppel is the same legal 
conclusion as set forth in In re. Abdullamir Mahid, Order Granting 
in Part and Denying in Part Bureau of Industry and Security's Motion 
for Summary Decision, Docket No. 02-BXA-01, at 11.
---------------------------------------------------------------------------

    The four elements of collateral estoppel are satisfied in this 
proceeding. On April 10, 2000, Respondent was indicted on thirteen 
charges of exporting items from the United States in violation of an 
order temporarily denying his export privileges. Respondent plead 
guilty to Charge 3 of this indictment on October 23, 2002 in United 
States of America v. Ihsan Elashyi, supra. The export for which 
Respondent plead guilty is the same export that BIS has referenced 
in this proceeding as Charges 6 and 19. The order temporarily 
denying Respondent's export privileges described in the indictment 
is the same TDO that BIS has charged Respondent with violating in 
Charges 4-32. (Gov't Ex. 7). As such, the issue sought to be 
precluded, the validity of a specific TDO, is the same in both the 
criminal proceeding and this proceeding. Respondent's guilty plea 
satisfies the requirement that the issue was actually litigated.\12\ 
The issue was also determined by a final and binding judgment. When 
the TDO was issued, the EAA provided a means by which Respondent 
could have appealed the issuance. See 50 U.S.C. app. Sec.  
2412(d)(2). Respondent did not appeal \13\ the Under Secretary of 
Commerce for Export Administration's Decision and Order granting the 
TDO, nor has he appealed his guilty plea in United States of America 
v. Ihsan Elashyi, supra. Finally, the validity of the TDO was 
essential to the judgment in the criminal case. Respondent plead 
guilty to Charge 3 of the criminal indictment. This indictment set 
forth that he willfully violated

[[Page 38847]]

the EAR by exporting goods to Saudi Arabia in violation of a TDO. If 
the TDO had not been valid, Respondent would not have been in 
violation of the EAR. The four elements of collateral estoppel are 
satisfied in this proceeding. Accordingly, the doctrine of 
collateral estoppel precludes Respondent from challenging the 
validity of the TDO in this proceeding.
---------------------------------------------------------------------------

    \12\ Application of collateral estoppel from a criminal 
proceeding to a subsequent civil proceeding is not in doubt. It is 
well settled that a guilty plea has preclusive effect in a 
subsequent administrative proceeding as to those matters determined 
in the criminal case. New York v. Julius Nasso Concrete Corp., 202 
F.3d 82, 86 (2d Cir. 2000); United States v. Killough, 848 F.2d 
1523, 1528 (11th Cir. 1998); United States v. Podell, 572 F.2d 31, 
35 (2d Cir. 1978).
    \13\ Respondent appealed the TDO to the U.S. Coast Guard 
Administrative Law Judge Docketing Center. On November 2, 2001, the 
Chief Administrative Law Judge issued a recommended decision that 
denied the appeal. On November 10, 2001, the Under Secretary of 
Commerce for Export Administration affirmed the recommended decision 
and order of the Chief Administrative Law Judge. There is no 
evidence that Respondent appealed the decision of the Under 
Secretary. As such, Respondent failed to exhaust his statutory 
remedies of appeal as set forth in 50 U.S.C. app. Sec.  2412(d).
---------------------------------------------------------------------------

C. Double Jeopardy

    Respondent moves to dismiss the charges in this proceeding as a 
violation of the Double Jeopardy Clause of the Fifth Amendment. 
Respondent argues the charges brought forth in this proceeding are 
based on essentially the same facts of which Respondent has already 
been found criminally guilty.\14\ Respondent's argument is 
unpersuasive as the current proceeding is civil in nature and not 
criminal.
---------------------------------------------------------------------------

    \14\  United States of America v. Ihsan Elashyi, Case No. 3:02-
CR-052-L(05) (N.D. TX) and United States of America v. Ihsan 
Elashyi, Case No. 3:02-CR-033-L(01) (N.D. TX).
---------------------------------------------------------------------------

    The Double Jeopardy ``Clause protects only against the 
imposition of multiple criminal punishments for the same offense.'' 
Hudson v. United States, 522 U.S. 93, 93 (1997). Courts have 
traditionally looked at Congressional intent when determining if a 
penalty is civil or criminal in nature. Id. at 94. A penalty statute 
labeled ``civil'' will generally be considered civil in nature 
unless the sanction is so punitive as to render it criminal. Id. 
``[N]either money penalties nor debarment has historically been 
viewed as'' criminal in nature. Id. at 104.
    Congress authorized a range of penalties available for export 
violations. See 50 U.S.C. app. 2410(c); 15 CFR 764.3. These 
penalties include a monetary penalty of up to $11,000 \15\ per 
violation and a revocation of export privileges. Id. Congress 
labeled these money penalties and debarment action as ``[c]ivil 
penalties.'' 50 U.S.C. app. 2410(c). From the wording of the 
statute, it is evident that Congress clearly intended the penalties 
available in this proceeding to be civil in nature. Since this 
proceeding is civil in nature, the Double Jeopardy Clause will not 
be a bar to the issuance of any additional administrative sanctions.
---------------------------------------------------------------------------

    \15\ The maximum penalty per violation is stated in Sec.  
764.3(a)(1), subject to adjustments under the Federal Civil 
Penalties Adjustment Act of 1990 (28 U.S.C. 2461, note (2000)), 
which are codified at 15 CFR 6.4.
---------------------------------------------------------------------------

D. Violations of the Export Administration Act and Regulations

    While Respondent has not refuted the evidence submitted against 
him by BIS, the burden of proof remains on BIS to prove the 
allegations in the charging letter by reliable, probative, and 
substantial evidence. See 5 U.S.C. 556(d). The Supreme Court has 
held that 5 U.S.C. 556(d) adopts the traditional ``preponderance of 
the evidence'' standard of proof. Dir., Office of Workers' Comp. 
Programs v. Greenwich Collieries, 512 U.S. 267, 290 (1994) (the 
preponderance of the evidence, not the clear-and-convincing 
standard, applies in adjudications under the APA) (citing Steadman 
v. S.E.C., 450 U.S. 91 (1981)). To prevail, BIS must establish that 
it is more likely than not that the Respondents committed the 
violations alleged in the charging letter. See Herman & Maclean v. 
Huddleston, 459 U.S. 375, 390 (1983). In other words, the Agency 
must demonstrate ``that the existence of a fact is more probable 
than its nonexistence.'' Concrete Pipe & Products v. Construction 
Laborers Pension Trust, 508 U.S. 602, 622 (1993). To satisfy the 
burden of proof, BIS may rely on direct and/or circumstantial 
evidence. See generally Monsanto Co. v. Spray-Rite Servo Corp., 465 
U.S. 752, 764-765 (1984).
    The Agency has produced sufficient evidence to establish that 
Respondent violated all charges, except Charges 12 and 25.

1. Charge 1: Conspiracy To Export Without Required License

    Charge 1 alleges that Respondent conspired to export computers 
and software to Syria in violation of 15 CFR 742.9. The conspiracy 
regulations provides: ``No person may conspire or act in concert 
with one or more persons in any manner or for any purpose to bring 
about or to do any act that constitutes a violation of the EAA, the 
EAR, or any other order, license or authorization issued 
thereunder.'' 15 CFR 764.2(d). This charge is found proved.
    On January 27, 2006, Respondent was found guilty of conspiracy 
to knowingly violate the EAR and was sentenced to 60 months 
imprisonment for the conspiracy and for other counts for which 
Respondent was convicted.\16\ (Gov't Ex. 3, at 3). The central facts 
of this charge are identical to those set forth in the criminal 
conspiracy. (Gov't Ex. 1, at 8-12). Respondent received orders for 
computers from customers in Syria, contracted to ship computers to 
Syria, failed to file required Shipper's Export Declaration for 
exports to Syria, and failed to receive the necessary export 
licenses. (Gov't Ex. 1, at 10-11). The criminal conspiracy 
indictment and subsequent conviction provide sufficient evidence 
that Respondent conspired to export computers and software to Syria.
---------------------------------------------------------------------------

    \16\ United States of America v. Ihsan Elashyi, Case No. 3:02-
CR-052-L(05) (N.D. TX).
---------------------------------------------------------------------------

2. Charge 2: Export of Computer Without Required License

    Charge 2 alleges that Respondent violated 15 CFR 764.2(a) by 
exporting a computer to Syria without the required license on August 
2, 2002. The relevant regulation prohibits any person from engaging 
in ``any conduct prohibited by or contrary to * * * the EAA [or] the 
EAR * * *.'' 15 CFR 764.2(a). This charge is found proved.
    In connection with the conspiracy referenced above, Respondent 
engaged in conduct prohibited by the EAR by exporting a computer to 
Syria without the proper export license. See 15 CFR 742.9. The 
central facts of this charge are identical to the facts alleged in 
Count 11 of the criminal indictment against Respondent. (Gov't Ex. 
1, at 16). The indictment alleged that on July 31, 2000, Respondent 
knowingly and willfully exported an item to Syria without the 
license required by 15 CFR 742.9. Id. Respondent was found guilty of 
exporting this computer to Syria without the proper license and was 
sentenced to 72 months imprisonment for this export and for other 
counts for which he was convicted. (Gov't Ex. 2, at 10; Gov't Ex. 3, 
at 3). The facts alleged in the indictment and subsequent conviction 
provide sufficient evidence that Respondent exported the item to 
Syria in violation of the EAR.

3. Charge 3: Selling Computer With Knowledge of Violation

    Charge 3 alleges that Respondent violated 15 CFR 764.2(e) by 
selling a computer to Syria with knowledge that a violation was 
about to occur. The relevant regulation provides that ``no person 
may * * * sell * * * any item exported or to be exported from the 
United States, or that is otherwise subject to the EAR, with 
knowledge that a violation of the EAA, the EAR, or any order * * * 
is about to occur, or is intended to occur in connection with the 
item.'' 15 CFR 764.2(e). This charge is found proved.
    Respondent engaged in conduct prohibited by the EAR by selling a 
computer to Syria with knowledge a violation of the EAR would occur. 
As described in Charge 1, Respondent was found guilty of conspiring 
to export items without the proper license. As described in Charge 
2, Respondent was found guilty of knowingly exporting a computer to 
Syria without the required license. In connection with these 
charges, BIS has provided an invoice showing the sale of this 
exported computer from Infocom Corporation, to A1, Ghein Bookshop in 
Damascus, Syria. (Gov't Ex. 6). Respondent was a systems consultant 
and sales representative for Infocom at this time. (Gov't Ex. 1, at 
2). The facts alleged in the indictment and subsequent conviction 
for the export of this computer, combined with the invoices, provide 
sufficient evidence that Respondent sold a computer with knowledge 
that a violation would occur.

4. Charge 4-15: Exporting While Denied Export Privileges

    Charges 4-15 allege that Respondent violated 15 CFR 764.2(k) by 
exporting, on twelve occasions, in violation of an export denial 
order. The relevant regulation provides that ``[n]o person may take 
any action that is prohibited by a denial order.'' 15 CFR 764.2(k). 
Charges 4-11 and 13-15 are found proved. Charge 12 is found not 
proved.
    On September 6, 2001, the Assistant Secretary of Commerce for 
Export Enforcement entered an order that denied the export 
privileges of Respondent for a period of 180 Days. (Gov't Ex. 7). 
This order stated that Respondent ``may not, directly or indirectly, 
participate in any way in any transaction involving any commodity, 
software or technology * * * exported or to be exported from the 
United States that is subject to the [EAR] * * *.'' (Gov't Ex. 7, at 
2). Respondent was served a copy of this order on September 7, 
2001.\17\ With

[[Page 38848]]

knowledge of this denial order, the evidence shows Respondent 
continued to export the following items via Tetrabal Corporation 
\18\ or in his own capacity:
---------------------------------------------------------------------------

    \17\ The certificate of service lists that a ``Request for Stay 
of Proceeding to Conduct Settlement Negotiations'' was served. 
(Gov't Ex. 8). However, the order that accompanied this certificate 
of service was titled ``Order Temporarily Denying Export 
Privileges.'' It appears the drafter of the certificate was in error 
and the certificate should have also been titled ``Order Temporarily 
Denying Export Privileges.'' On December 4, 2001, Respondent sent a 
letter to a U.S. Customs office in Dallas, TX. (Gov't Ex. 9). This 
letter states that Respondent was aware of the export denial order 
issued against him on September 6, 2001. It is evident that 
Respondent had knowledge of the denial order.
    \18\ Respondent was the CEO of Tetrabal Corporation. Gov't Ex. 
9. As CEO of Tetrabal, Respondent was ultimately responsible for its 
actions. See U.S. v. Park, 421 U.S. 658, 670-71 (1975), see also 
U.S. v. Dotterweich, 320 U.S. 277 (1943).
---------------------------------------------------------------------------

    Charge 4: On August 19, 2001, Tetrabal issued an invoice for 
sale and export of 10 ``horn strobe signal telecom telephone ringer 
devise,'' items subject to the EAR. (Gov't Ex. 12). The purchaser 
was listed as Al Bassam International in Alkhobar, Saudi Arabia. Id. 
Tetrabal shipped these items to Saudi Arabia, via Airborne Express, 
on September 22, 2001. (Gov't Ex. 13).
    Charge 5: On September 19, 2001, Tetrabal issued an invoice for 
the sale and export of one box of used clothing, an item subject to 
the EAR. (Gov't Ex. 14). The purchaser was listed as Teyseer Alkayal 
in Amman, Jordan. Id. Tetrabal shipped these items to Jordan, via 
Federal Express, on September 19, 2001. (Gov't Ex. 15).
    Charge 6: \19\ On August 22, 2001, Tetrabal issued an invoice 
for the sale and export of 82 Dell Dimension 128 computers, items 
subject to the EAR. (Gov't Ex. 16). The purchaser was listed as 
E.T.E. in Riyadh, Saudi Arabia. Id. Tetrabal shipped these items to 
Saudi Arabia, via Lufthansa Cargo AG, on September 19, 2001. (Gov't 
Ex. 17).
---------------------------------------------------------------------------

    \19\ The facts alleged by BIS in Charges 6 and 19 are identical 
to Count 3 of the indictment to which Respondent plead guilty to in 
United States of America v. Ihsan Elashyi, Case No. 3:02-CR-033-
L(01) (N.D. TX). (Gov't Ex. 10, 11).
---------------------------------------------------------------------------

    Charge 7: On October 15, 2001, ``Albassam Corporation'' \20\ 
issued an invoice for the sale of networking equipment, items 
subject to the EAR. (Gov't Ex. 19). The purchaser was listed as Al 
Bassam International in Alkhobar, Saudi Arabia. Id. On October 22, 
2001, Tetrabal arranged for pickup and delivery of this equipment, 
via DHL, to Saudi Arabia. (Gov't Ex. 17). This equipment was 
subsequently detained, prior to delivery, by the Department of 
Commerce, and seized and forfeited by the U.S. Customs Service. 
(Gov't Ex. 21).
---------------------------------------------------------------------------

    \20\ ``Albassam Corporation'' is found to be an alias for 
Respondent and Tetrabal Corporation. The invoices for Albassam are 
identical in all ways to the invoices used by Respondent for 
Tetrabal. (See Gov't Ex. 16, 19, 22). Also, all shipping documents 
for Albassam are issued in the name of Tetrabal. BIS has submitted 
sufficient evidence to show that ``Albassam Corporation'' served as 
an alias for Respondent and Tetrabal Corporation.
---------------------------------------------------------------------------

    Charge 8: On October 26, 2001, ``Albassam Corporation'' issued 
an invoice for the sale of five printers, items subject to the EAR. 
(Gov't Ex. 22). The purchaser was listed as Al Bassam International 
in Alkhobar, Saudi Arabia. Id. On October 26, 2001, the printers 
were exported to Saudi Arabia, via DHL Express. (Gov't Ex. 23). In 
addition to the facts outlined in footnote 20, several other factors 
show that ``Albassam Corporation'' is an alias of Respondent and 
that it was in fact Respondent who exported the items. First, 
Tetrabal's name and DHL account number were on this air waybill, but 
were scratched out and replaced by ``Bassam Intl'' and a new account 
number. Id. Second, a purchase order for the five printers was 
issued from a company called Scansource in Greenville, SC to 
Tetrabal. (Gov't Ex. 24). Tetrabal would have purchased the 
computers from this company in order to then sell and export the 
computers to Al Bassam. Third, a receipt was issued showing Tetrabal 
as the shipper. Id. This equipment was subsequently detained, prior 
to delivery, by the Department of Commerce, and seized and forfeited 
by the U.S. Customs Service. (Gov't Ex. 25).
    Charge 9: On October 31, 2001, Tetrabal issued an invoice for 
the sale and export of computer accessories, items subject to the 
EAR. (Gov't Ex. 26). The purchaser was listed as United Computer 
System in Cairo, Egypt. Id. The company Mynet, found to be the same 
as Tetrabal,\21\ shipped these items to Egypt, via Federal Express, 
on November 2, 2001. (Gov't Ex. 27).
---------------------------------------------------------------------------

    \21\ On a U.S. Postal Service form, Application for Mail 
Delivery Through Agent, three names are listed as Tetrabal 
Corporation officers, Ihsan Elashyi, Abdulla Alnasser, and Maysoon 
Alkayali. (Gov't Ex. 28). Maysoon Alkayali is found to be the same 
as ``M. Kayali,'' the person who signed the air waybill for Mynet. 
Furthermore, the address Mynet listed on the air waybill is the same 
address Tetrabal listed on the U.S. Postal Service form. (Gov't Ex. 
27, 28).
---------------------------------------------------------------------------

    Charge 10: On October 31, 2001, Tetrabal issued an invoice for 
sale and export of computer accessories, items subject to the EAR. 
(Gov't Ex. 29). The purchaser was listed as MAC Club in Riyadh, 
Saudi Arabia. Id. The company Mynet shipped these items to Saudi 
Arabia, via Federal Express, on November 2, 2001, to the same 
person, Anwar Galam, as the invoice from Tetrabal was made out to. 
(Gov't Ex. 30). As set forth in Charge 9, Mynet is found to be an 
alias of Respondent.
    Charge 11: On November 5, 2001, Tetrabal provided a quotation to 
MAC Club in Riyadh, Saudi Arabia for the sale of Apple Imac security 
cables. (Gov't Ex. 31). On November 7, 2001, Tetrabal issued an 
invoice for sale of Apple Imac security cables, items subject to the 
EAR. (Gov't Ex. 32). The purchaser was listed as MAC Club in Riyadh, 
Saudi Arabia. Id. A. Nasser, an officer of Tetrabal,\22\ shipped 
these items to Saudi Arabia, via Airborne Express, on September 22, 
2001. (Gov't Ex. 33).
---------------------------------------------------------------------------

    \22\ Abdulla Alnasser, believed to be the same person as ``A. 
Nasser,'' is listed as an officer of Tetrabal on the U.S. Postal 
Service form, an Application for Mail Delivery Through Agent. (Gov't 
Ex. 28). The address A. Nasser listed on the air waybill is 
identical to the address listed for Tetrabal on the U.S. Postal 
Service form. Id.
---------------------------------------------------------------------------

    Charge 12: In support of Charge 12, BIS introduced Exhibit 34. 
Exhibit 34 is an invoice for the sale of Apple Imac and Apple 
Powermac security cables to MAC Club in Riyadh, Saudi Arabia. This 
invoice is the same invoice introduced in support of Charge 11 
(Exhibit 32). BIS recognizes this and states in its Submission of 
Evidence that ``[a]lthough the invoice in Exhibit 34 appears 
identical to that in Exhibit 32, it appears that two separate 
transactions took place as the Federal Express airway bill numbers 
listed in Exhibits 33 and 35 are not the same.'' BIS is correct in 
that two separate airway bill numbers exist. However, this not does 
prove the existence of two separate transactions/violations. A more 
likely explanation would be that two shipments were made involving 
the same transaction. A quotation from Tetrabal was given for the 
sale of 400 Apple Imac security cables (NG-AIM and NG-AMT variants) 
to MAC Club. (Gov't Ex. 31). MAC Club responded to this quotation by 
requesting the purchase of a sample NG-AIM and a sample AG-AMT. 
(Gov't Ex. 32). An invoice was drawn up for this sale. Id. It 
appears these samples were sent via the air waybills introduced in 
Exhibits 33 and 35. Charge 12 is found to be part of the same 
transaction as Charge 11 and is not found to be a separate offense.
    Charge 13: On November 21, 2001, Tetrabal provided quotations 
for the export of various items to United Computer System, attention 
Moustafa Maarouf, in Cairo, Egypt. (Gov't Ex. 36). On November 30, 
2001, a ``Haydee Herrera'' issued an invoice to Moustafa Maarouf for 
the sale of several of the items for which Tetrabal had provided 
quotations. (Gov't Ex. 37). ``Haydee Herrera'' has been found to be 
an alias of Respondent.\23\ The items were exported by ``Haydee 
Herrera,'' via Federal Express, on November 30, 2001. (Gov't Ex. 
38).
---------------------------------------------------------------------------

    \23\ Two pieces of evidence provided by BIS show that ``Haydee 
Herrera'' was used as an alias for Respondent. First, the address 
listed for ``Haydee Herrera'' is the same address used by Tetrabal. 
(Gov't Ex. 36 & 38). Second, the handwritten invoice issued by 
``Haydee Herrera'' is identical to the handwritten invoices issued 
by Tetrabal. (Gov't Ex. 14, 37).
---------------------------------------------------------------------------

    Charge 14: On December 10, 2001, Tetrabal provided quotations 
for the export of computers to United Computer System in Cairo, 
Egypt, attention Moustafa Maarouf. (Gov't Ex. 39). On November 30, 
2001, Tetrabal issued a proforma invoice to United Computer Systems, 
attention Moustafa Maarouf, for sale of computers and computer 
accessories to Egypt. (Gov't Ex. 40). On December 21, 2001, ``Haydee 
Herrera'' issued an invoice for the sale of a computer and computer 
accessories, items subject to the EAR, to Moustafa Maarouf in Cairo, 
Egypt. (Gov't Ex. 41). As set forth in Charge 14, ``Haydee Herrera'' 
is found to be an alias of Respondent. The December 21, 2001 invoice 
and the December 20, 2001 proforma invoice concern the sale of the 
same items. The items were exported by ``Haydee Herrera,'' via 
Federal Express, on December 21, 2001. (Gov't Ex. 42).
    Charge 15: On January 28, 2002, Tetrabal issued an invoice for 
the export of SCSI kits to CompuNet in Saida, Lebanon, attention 
Osama Qaddoura. (Gov't Ex. 43). Prior to the invoice, Respondent had 
sent and received several e-mails from Osama Qaddoura regarding the 
export. (Gov't Ex. 44). The e-mail address used by Osama Qaddoura, 
listed as ``[email protected],'' indicates the company is Syrian, not 
Lebanese. Id. In

[[Page 38849]]

addition, the country code listed for CompuNet telephone number is 
``963,'' which is the country code for Syria, not Lebanon. Id. The 
items were shipped by ``Samer Suwwan'' to Saida, Lebanon, via DHL, 
on February 5, 2002. (Gov't Ex. 45). ``Samer Suwwan'' is believed to 
be an alias of Respondent.

5. Charge 16: Negotiating an Export While Denied Export Privileges

    Charge 16 alleges that Respondent violated 15 CFR 764.2(k) by 
negotiating a transaction involving the export of an item while he 
was denied export privileges. The relevant regulation provides that 
``[n]o person may take any action that is prohibited by a denial 
order.'' 15 CFR 764.2(k). Negotiating the sale of an export is an 
action prohibited by a denial order.\24\ Charge 16 is found proved.
---------------------------------------------------------------------------

    \24\ The denial order states that Respondent ``may not, directly 
or indirectly, participate in any way in any transaction involving 
any commodity, software or technology * * * exported or to be 
exported from the United States that is subject to the [EAR].'' See 
Id. (Gov't Ex. 7, at 2). Negotiating the sale of an export would be 
considered ``participat[ing] in any way'' of an export.
---------------------------------------------------------------------------

    On October 12, 2001, Tetrabal issued a quotation to Al-Masdar 
\25\ in Riyadh, Saudi Arabia, for the sale of Dell Dimension 
computers to Al-Masdar. (Gov't Ex. 46). On October 30, 2001, 
Respondent and Tetrabal sent a facsimile to Mr. William Martin, a 
Special Agent in BIS's Dallas Field Office, to request permission to 
export the computers to Saudi Arabia. (Gov't Ex. 47). On October 30, 
2001, Mr. Martin responded to Respondent and Tetrabal informing them 
that he could not authorize their export and advised them of the 
pertinent sections of the EAR regarding these types of transactions. 
(Gov't Ex. 48). Despite this letter, Respondent continued to 
negotiate the sale of exports to Al-Masdar. (Gov't Ex. 50). On 
November 19, 2001, Respondent informed Al-Masdar that his accounts 
were ``shut down'' because of the export denial order. (Gov't Ex. 
49). Al-Masdar, fearing that Respondent would not make good on the 
sale of exports already paid for, sent a letter and copies of 
correspondence that Al-Masdar had with Respondent and Tetrabal to 
the U.S. Embassy in Riyadh, Saudi Arabia. (Gov't Ex. 50). The 
letters and correspondence show that Respondent and Tetrabal 
negotiated the sale of computers to Al-Masdar, sold the computers to 
Al-Masdar, and collected money from Al-Masdar for the sale of the 
computers, while he was denied his export privileges. Id. Respondent 
failed to ship the computers to Al-Masdar when Respondent and 
Tetrabal began having difficulties as a result of the temporary 
denial of export privileges. Id. This evidence clearly shows that 
Respondent was engaged in export negotiations while he was denied 
export privileges.
---------------------------------------------------------------------------

    \25\ Tetrabal spells Al-Maser with an ``e,'' while Saudi Systems 
Corporation (the company encompassing Al-Masdar) spells Al-Masdar 
with an ``a.'' This Order will spell Al-Masdar with an ``a.''
---------------------------------------------------------------------------

6. Charges 17-29: Selling Computers and Computer Accessories With 
Knowledge of Violation

    In Charges 4-16, BIS alleges that Respondent knowingly violated 
his denial order. A separate regulation, 15 CFR 764.2(e),\26\ make 
it a violation to act with knowledge that a violation of the EAR 
would occur. A violation of a denial order would constitute a 
violation of the EAR. Therefore, if an individual has a denied 
export license, violating the denial order is one violation \27\ and 
the act of knowingly violating the EAR is a separate violation.\28\ 
As a result, in respect to the facts set forth in Charges 4-16, BIS 
also charged Respondent with the act of knowingly violating the EAR 
in Charges 17-24.\29\ Charges 17-24 and 26-29 are found proved. 
Charge 25 \30\ is found not proved.
---------------------------------------------------------------------------

    \26\ The relevant part of the regulation provides that ``[n]o 
person may * * * sell * * * any item exported or to be exported from 
the United States, or that is otherwise subject to the EAR, with 
knowledge that a violation of the EAA, the EAR, or any order * * * 
is about to occur, or is intended to occur in connection with the 
item.''
    \27\ 15 CFR Sec.  764.2(k).
    \28\ 15 CFR Sec.  764.2(e).
    \29\ Therefore, the following Charges have the same facts: 
Charges 4 & 17, 5 & 18, 6 & 19, 7 & 20, 8 & 21, 9 & 22, 10 & 23, 11 
& 24, 12 & 25, 13 & 26, 14 & 27, 15 & 28, and 16 & 29.
    \30\ Note: Since Charge 12 was found to be included in the same 
transaction as Charge 11, Charge 12 was determined not to be found 
proved. Likewise, Charge 25 (setting forth the same facts as set 
forth in Charge 12) is also not found proved, since Charge 25 is 
found to be included in the same transaction as Charge 24 (which has 
the same facts set forth in Charge 11).
---------------------------------------------------------------------------

    The facts set forth in Charges 4-16 show that Respondent had 
knowledge that the actions he took would be in violation of the EAR. 
First, the facts show that the Respondent was aware of the denial 
order. A certificate of service shows Respondent received the denial 
order and Respondent drafted a letter stating he was aware of the 
denial order. (Gov't Ex. 8, 9). The denial order clearly states the 
order was issued pursuant to the EAR. (Gov't Ex. 8). Any violation 
of the denial order would therefore be in violation of the EAR. 
Second, the evidence in Charges 9, 10, and 15 shows Respondent took 
action to evade the denial order by exporting under aliases. 
Respondent continued to export under such aliases as Mynet, Kayali 
Corporation, and Samer Suwwan. Such evasion to export under his own 
name strongly indicates that Respondent had knowledge that the 
actions he was undertaking were in violation of the EAR. Charges 17-
24 and 26-29 are therefore found proved.
    Charge 25 is found not proved.\31\ In support of Charge 25, BIS 
introduced Exhibit 34. Exhibit 34 is an invoice for the sale of 
Apple Imac and Apple Powermac security cables to MAC Club in Riyadh, 
Saudi Arabia. This invoice is the same invoice introduced in support 
of Charge 24 (Exhibit 32). BIS recognizes this and states in its 
Submission of Evidence that ``[a]lthough the invoice in Exhibit 34 
appears identical to that in Exhibit 32, it appears that two 
separate transactions took place as the Federal Express airway bill 
numbers listed in Exhibits 33 and 35 are not the same.'' BIS is 
correct in that two separate airway bill numbers exist. However, 
this not does show the existence of two separate transactions. A 
more likely explanation would be that two shipments were made 
involving the same transaction. A quotation from Tetrabal was given 
for the sale of 400 Apple Imac security cables (NG-AIM and NG-AMT 
variants) to MAC Club. (Gov't Ex. 31). MAC Club responded to this 
quotation by requesting the purchase of a sample NG-AIM and AG-AMT. 
(Gov't Ex. 32). An invoice was drawn up for this sale. Id. It 
appears these samples were sent via the air waybills introduced in 
Exhibits 33 and 35. Charge 25 is found to be part of the same 
transaction as Charge 24 and is not found to be a separate offense.
---------------------------------------------------------------------------

    \31\ This finding follows the same rationale laid out in Charge 
12.
---------------------------------------------------------------------------

7. Charges 30-32: Taking Action To Evade Denial Order

    Charges 30-32 allege that Respondent violated 15 CFR 764.2(h) by 
taking action to evade a denial order. The relevant regulation 
provides that ``[n]o person may engage in any transaction or take 
any other action with intent to evade the provisions of the EAA, 
[or] the EAR * * * .'' 15 CFR Sec.  764.2(h). Charges 30-32 are 
found proved.
    Charges 30-32 corresponded respectively to Charges 9, 10, and 15 
as discussed above. On each of these occasions, Respondent took 
action to evade his denial order. In Charge 9, it was shown that 
Respondent used the aliases ``Mynet'' and ``M. Kayali'' to export 
computer accessories to Egypt. In Charge 10, it was shown that 
Respondent again used the aliases ``Mynet'' and ``M. Kayali'' to 
export computer accessories to Saudi Arabia. In Charge 15, it was 
shown that Respondent used the alias ``Samer Suwwan'' to export 
computers to Lebanon. Respondent used these aliases to disguise his 
continued export of goods. These facts have shown that Respondent 
took action to evade his denial orders in Charges 30-32.

VII. Reason for the Sanction

    Section 764.3 of the EAR establishes the sanctions that BIS may 
seek for the violations charged in this proceeding. The sanctions 
are: (1) A civil penalty of up to $11,000 per violation, (2) 
suspension of practice before the Department of Commerce, and (3) a 
denial of export privileges under the Regulations. See 15 CFR 764.3. 
BIS moves the Administrative Law Judge to recommend to the Under 
Secretary for Industry and Security (``Under Secretary'') that the 
export privileges of Respondent under the Regulations be denied for 
a period of fifty (50) years and that Respondent be ordered to pay a 
civil penalty in the amount of $352,000, the maximum civil penalty 
($11,000 for each of the 32 violations) allowable based upon the 
charges in the charging letter.
    A fifty year denial of export privileges and a $330,000 \32\ 
civil penalty are deemed appropriate sanctions in this case. 
Respondent has shown severe disregard and contempt for export 
control laws, including conspiracies to do acts that violate the 
Regulations, taking actions with knowledge that the actions violated 
the Regulations, and

[[Page 38850]]

exporting items in violation of an order prohibiting Respondent from 
exporting items subject to the Regulations. Respondent engaged in a 
conspiracy to export items to Syria without the required Department 
of Commerce authorization. The United States maintains controls over 
exports to Syria because Syria is a state sponsor of terrorism. In 
addition, Respondent has shown contempt for the administrative 
orders issued by BIS by exporting items in violation of an order 
denying his export privileges and by changing names on shipping 
documents to evade the order denying his export privileges.
---------------------------------------------------------------------------

    \32\ Since Charges 12 and 25 were found not proved, the 
requested civil penalty was reduced by $22,000 ($11,000 per 
violation, as set forth in 15 CFR Sec.  764.3).
---------------------------------------------------------------------------

    Such a penalty is consistent with penalties imposed in a recent 
case under the Regulations involving shipments to comprehensively 
sanctioned countries. See In the Matter of Petrom GmbH International 
Trade, 70 FR 32,743 (June 6, 2005) (affirming the recommendations of 
the Administrative Law Judge that a twenty year denial and $143,000 
administrative penalty was appropriate where violations involved 
multiple shipments of EAR99 items to Iran as a part of a conspiracy 
to ship such items through Germany to Iran).
    The recommended penalties are also consistent with settlements 
reached in significant BIS cases under the Regulations concerning 
illegal exports of pipe coating materials to Libya. See In the 
Matter of Jerry Vernon Ford, 67 FR 7352 (February 19, 2002) 
(settlement agreement for a 25 year denial); In the Matter of 
Preston John Engebretson, 67 FR 7354 (February 19, 2002) (settlement 
agreement for a 25 year denial); and In the Matter of Thane-Coat, 
Inc., 67 FR 7351 (February 19, 2002) (settlement agreement for a 
civil penalty of $1,120,000 ($520,000 suspended for two years and a 
25 year denial)).
    The nature and quantity of violations in this case warrant a 
more significant penalty. In particular, Respondent's contempt for 
the temporary denial order by continuing to export after the order 
was imposed and constantly shifting both his name and Tetrabal's 
name to evade the order warrants the extraordinary penalty proposed 
in order to prevent others from showing the same contempt for BIS's 
administrative orders. In addition, there are no factors that have 
been put forth by Respondent that warrant any mitigation of the 
penalty.

VIII. Recommended Order

[Redacted Section]

    Within 30 days after receipt of this Recommended Decision and 
Order, the Under Secretary shall issue a written order, affirming, 
modifying or vacating the recommended decision and order. See 15 CFR 
Sec.  766.22(c).

    Done and dated June 5, 2006 at Norfolk, Virginia.

Peter A. Fitzpatrick,
Administrative Law Judge, U.S. Coast Guard, Norfolk, Virginia.

[FR Doc. 06-6022 Filed 7-7-06; 8:45 am]
BILLING CODE 3510-33-M