A Belgian businessman will be arraigned Thursday on federal charges alleging he violated U.S. laws by attempting to export aluminum tubes – that were controlled for nuclear proliferation purposes – from an Illinois company, through Belgium, to a Malaysian company, without obtaining a required license from the U.S. Commerce Department.
These charges were announced by Zachary T. Fardon, U.S. Attorney for the Northern District of Illinois; Gary Hartwig, special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Chicago; Robert J. Shields Jr., acting special agent in charge of FBI’s Chicago office; and Ronald B. Orzel, special agent in charge of the Chicago office of U.S. Department of Commerce’s (DOC) Bureau of Industry and Security, Office of Export Enforcement.
This case follows a lengthy undercover investigation in which the U.S. company, based in Schaumburg, Ill., which was cooperating with law enforcement, actually shipped different non-controlled aluminum tubes to the defendant’s business in Belgium before they were allegedly illegally transshipped to Malaysia.
Court documents allege that the Malaysian business is a front company operated by an individual who is sometimes located in Iran.
The case involves "7075 T6" aluminum tubing with an outside diameter of 4.125 inches and an ultimate tensile strength of 572 MPa (megapascals), which is used in the aerospace industry, among other applications. As a controlled material, a license is required from the DOC’s Bureau of Industry and Security to export the 7075 aluminum from the U.S. to Malaysia, but not to Belgium.
Nicholas Kaiga, 36, of Brussels and London, was charged with one count of violating the International Emergency Economic Powers Act (IEEPA) and two counts of making false statements on U.S. export forms in a three-count indictment returned by a federal grand jury last Thursday. Kaiga has been in federal custody since his arrest June 25 in New York City, about a week after he arrived there. A criminal complaint filed at the time of his arrest was unsealed when he was indicted last week.
The Justice Department’s National Security Division is assisting with this case.
According to the complaint affidavit and the indictment, the Schaumburg company, identified as "Company A" in court documents, began cooperating with law enforcement in December 2007. The cooperation began after a person identified as "Individual A," who was at times located in Iran, attempted to purchase 7075 aluminum from Company A, to be shipped to a company in the United Arab Emirates, but was denied an export license. In late 2009, an undercover agent began posing as an employee of Company A.
Between November 2009 and February 2012, the indictment alleges that Kaiga, who was managing director of a Belgian company, Industrial Metals and Commodities, attempted to export 7075 aluminum from Company A to Company B in Malaysia without an export license. The complaint affidavit alleges that Company B was a front for Individual A in Iran. The false-statements charges allege that Kaiga lied on Commerce Department export declaration forms, which stated that the ultimate destination and recipient of the 7075 aluminum were in Belgium.
In November 2011, material that was purported to be 7075 aluminum, but was actually substituted with a different aluminum by Company A in cooperation with law enforcement, was picked up from Company A by a freight-forwarding company designated by Kaiga’s Belgian company. The material arrived in the Belgian port of Antwerp Dec. 1, 2011. Two months later it was shipped by a freight-forwarding company to Individual A’s front company in Malaysia.
Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine; making false statements to government agencies carries a maximum penalty of five years in prison and a $250,000 fine. Assistant U.S. Attorneys Raj Laud and Nancy DePodesta are prosecuting this case.
An indictment merely contains charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.