[Federal Register Volume 72, Number 116 (Monday, June 18, 2007)]
[Notices]
[Pages 33445-33446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2982]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; George Charles Budenz II and 
Richard Scott Tobey; In the Matter of: George Charles Budenz II, 94394-
198, FDC SEATAC, Federal Detention Center, P.O. Box 13900, Seattle, WA 
98198 and With an Address at: 25143 Jack Rabbit Acres, Escondido, CA 
92026, Respondent: and Richard Scott Tobey, 42079 Humber Drive, 
Temecula, CA 92591, Related Person

Order Denying Export Privileges

A. Denial of Export Privileges of George Charles Budenz II

    On July 19, 2006, in the U.S. District Court in the Southern 
District of California, following a plea of guilty, George Charles 
Budenz II (``Budenz'' or ``Respondent'') was convicted of violating 
Section 38 of the Arms Export Control Act (22 U.S.C. 2778 (2000)) 
(``AECA''). Budenz pled guilty to knowingly and willfully exporting and 
causing to be exported from the United States to Malaysia and Belgium 
military aircraft parts which were designated as defense articles on 
the United States Munitions List, without having first obtained a 
license from the Department of State for such export, or other written 
authorization for such an export. Budenz was sentenced to 36 months 
imprisonment and fined $10,000, followed by three years of supervised 
release.
    Section 11(h) of the Export Administration Act of 1979, as amended 
(currently codified at 50 U.S.C. app. 2401-2420 (2000)) (the ``Act'') 
\1\ and Sec.  766.25 of the Export Administration Regulations 
(``Regulations'') \2\ provide, in pertinent part, that ``[t]he Director 
of Exporter Services, in consultation with the Director of the Office 
of Export Enforcement, may deny export privileges of any person who has 
been convicted of a violation of * * * Section 38 of the Arms Export 
Control Act,'' for a period not to exceed 10 years from the date of 
conviction. 15 CFR 766.25(a) and (d). In addition Sec.  750.8 of the 
Regulations states that BIS's Office of Exporter Services may revoke 
any BIS licenses previously issued in which the person had an interest 
in at the time of his conviction.
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    \1\ 50 U.S.C. app. Sec.  2401-2420. Since August 21, 2001, the 
Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended 
by the Notice of August 3, 2006 (71 FR 44551, Aug. 7, 2006), has 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) 
(``IEEPA'').
    \2\ The Regulations are currently codified at 15 CFR parts 730-
774 (2007).
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    I have received notice of Budenz's conviction for violating the 
AECA, and have provided notice and an opportunity for Budenz to make a 
written submission to the Bureau of Industry and Security as provided 
in Sec.  766.25 of the Regulations. Having received no submission from 
Budenz, I, following consultations with the Office of Export 
Enforcement, including its Director, have decided to deny Budenz's 
export privileges under the Regulations for a period of five years from 
the date of Budenz's conviction.

B. Denial of Export Privileges of Related Persons

    In addition, pursuant to Sec. Sec.  766.25(h) and 766.23 of the 
Regulations, the Director, Office of Exporter Services, in consultation 
with the Director, Office of Export Enforcement, may take action to 
name persons related to the Respondent by ownership, control, position 
of responsibility, affiliation, or other connection in the conduct of 
trade or business in order to prevent evasion of the Order. I gave 
notice to Richard Scott Tobey (``Tobey''), notifying him that his 
export privileges under the Regulations could be denied for up to 10 
years as BIS believes that he is related to Arif Ali

[[Page 33446]]

Durrani (``Durrani'') and Budenz and including him in an Order is 
necessary to prevent evasion. I have decided to include Tobey in the 
Budenz Order. The basis for naming Tobey to the Budenz Order is that 
Tobey pled guilty to conspiracy to violate the AECA, in violation of 18 
U.S.C. 371, for conspiring to export controlled military aircraft parts 
to the United Arab Emirates and Canada without the required licenses 
from the Department of State. Tobey was placed on probation for five 
years and fined $10,000.00. Based upon these facts, Tobey is related to 
Budenz by ownership, control, position of responsibility, affiliation, 
or other connection in the conduct of trade or business and he needs to 
be named to any Budenz Denial Order to prevent evasion of it.
    Having received no submission from Tobey, I have decided, following 
consultations with the Office of Export Enforcement, including its 
Director, to name Tobey as a related person to the Budenz Denial Order, 
thereby denying his export privileges for five years from the date of 
Budenz's conviction.
    I have also decided to revoke all licenses issued pursuant to the 
Act or Regulations in which Budenz and Tobey had an interest at the 
time of Budenz's conviction. The five-year denial period ends on July 
19, 2011.
    Accordingly, it is hereby Ordered
    I. Until July 19, 2011, George Charles Budenz II, 94394-198, FDC 
SEATAC, Federal Detention Center, P.O. Box 13900, Seattle, WA 98198, 
and with an address at: 25143 Jack Rabbit Acres, Escondido, CA 92026, 
and when acting for or on his behalf, his employees, agents or 
representatives, (``the Denied Person'') and the following person 
related to the Denied Person as defined by Section 766.23 of the 
Regulations, Richard Scott Tobey, 42079 Humber Drive, Temecula, CA 
92591, and when acting for or on his behalf, his employees, agents or 
representatives, (``the Related Person'') (together, the Denied Person 
and the Related Person are ``Persons Subject To This Order'') 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.
    II. No person may, directly or indirectly, do any of the following:
    A. Export or reexport to or on behalf of the Persons Subject To 
This Order any item subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Persons Subject To This Order 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 Persons 
Subject To This Order 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 Persons Subject To This Order of any 
item subject to the Regulations that has been exported from the United 
States;
    D. Obtain from the Persons Subject To This Order 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 which is owned, possessed or controlled by the Persons Subject To 
This Order, or service any item, of whatever origin, that is owned, 
possessed or controlled by the Persons Subject To This Order 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.
    III. In addition to the Related Person named above, after notice 
and opportunity for comment as provided in section 766.23 of the 
Regulations, any other person, firm, corporation, or business 
organization related to Budenz 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 if necessary 
to prevent evasion of the Order.
    IV. 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.
    V. This Order is effective immediately and shall remain in effect 
until July 19, 2011.
    VI. In accordance with Part 756 of the Regulations, Budenz may file 
an appeal of this Order with the Under Secretary of Commerce for 
Industry and Security. The appeal must be filed within 45 days from the 
date of this Order and must comply with the provisions of Part 756 of 
the Regulations.
    VII. In accordance with Part 756 of the Regulations, Tobey may file 
an appeal of this Order with the Under Secretary of Commerce for 
Industry and Security. The appeal must be filed within 45 days from the 
date of this Order and must comply with the provisions of Part 756 of 
the Regulations.
    VIII. A copy of this Order shall be delivered to Budenz and the 
Related Person. This Order shall be published in the Federal Register.

    Dated: June 9, 2007.
Eileen M. Albanese,
Director, Office of Exporter Services.
[FR Doc. 07-2982 Filed 6-15-07; 8:45 am]
BILLING CODE 3510-DT-M