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CEO arrested for illegal defense exports

Department of Justice

U.S. Attorney’s Office

Southern District of California


FOR IMMEDIATE RELEASE

Friday, March 4, 2022

Former Tungsten Heavy Powder & Parts CEO Arrested and Charged with Unlawful Exportation of Defense Articles including to The People’s Republic of China

Assistant U.S. Attorneys Kareem A. Salem (619) 546-8904 and John Parmley (619) 546-7957

NEWS RELEASE SUMMARY – March 4, 2022

SAN DIEGO – Joe Sery, former owner and chief executive officer of Tungsten Heavy Powder & Parts, and his brother, Dror Sery, are charged in a federal grand jury indictment unsealed today with violations of federal export laws pursuant to the International Traffic in Arms Regulations (ITAR).

Tungsten Heavy Powder & Parts, or THPP, is a San Diego-based company that provides tungsten fragments, sub-assemblies, and other weapon grade components for United States military contracts.

According to the indictment, between January 1, 2016, and December 12, 2019, Joe Sery entered into contracts with various aerospace and defense companies on behalf of THPP. Joe Sery then obtained  ITAR- controlled technical data and drawings from these companies to allow THPP to fulfill the contracted order. Some of THPP’s projects included the construction of an Advanced Rapid Response Weapon, a 155-millimeter Bi-Modal Warhead, a R9E Warhead, and an 81-millimeter Cowling Cone. These drawings contained information, which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles.

Despite being educated and trained regarding the requirements of ITAR, Joe Sery and his brother Dror Sery – a foreign national and dual citizen of Israel and South Africa – knowingly and willfully exported from the United States to the People’s Republic of China, the Republic of India and elsewhere overseas, defense articles covered by the United States Munitions List without first obtaining permission from the United States Department of State’s Directorate of Defense Trade Controls.

The indictment further alleges that Joe Sery and Dror Sery accomplished this, in part, by creating a non-THPP email address to surreptitiously receive ITAR-controlled documents. Additionally, shortly after Dror created the outside email address Joe Sery provided Dror Sery with administrative level access of THPP’s “ShareFile system,” which contained ITAR-controlled data. Subsequently, on several occasions, Joe Sery and Dror Sery exported technical drawings from the United States via email messages to each other, including while Dror was located in India and the People’s Republic of China.

Joe Sery is expected to be arraigned in federal court on Monday; an arrest warrant has been issued for fugitive Dror Sery. He is believed to be residing in Israel.

THPP is cooperating with the investigation.

“The indictment alleges that these brothers disregarded important regulations designed to keep sensitive information from falling into the hands of those who would harm America,” said U.S. Attorney Randy Grossman. “The U.S. Attorney’s Office will work together with our law enforcement partners to protect military technology.” Grossman thanked the prosecution team, HSI and DCIS for their excellent work on this case.

“This arrest highlights the outstanding partnerships between HSI and the Department of Defense’s investigative agencies who work tirelessly every day to ensure our protected military technology and weaponry are not used by foreign actors against our warfighters and allies on the battlefield,” said HSI San Diego Special Agent in Charge Chad Plantz. “This arrest sends a clear message that those entrusted with our country’s military technology and weaponry will be held responsible for its safeguarding.”  

“Mr. Sery is accused of compromising sensitive defense technology, and today’s arrest is an important step toward protecting our country’s information,” said Bryan D. Denny, Special Agent in Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office.  “DCIS will always take aggressive action with our law enforcement partners to deter and investigate any such threats to our national defense.”

DEFENDANTS                     Case Number 21CR2898-GPC 

Joe Sery                                  Age: 77                       San Diego, CA

Dror Sery                                Age: 70                       Israel/Unknown

SUMMARY OF CHARGES

Conspiracy to Commit Offenses Against the United States- Title 18 U.S.C., Sections 371,554; Title 22 U.S.C., 2778(b)(2), (c); Title 22 CFR Sections, 120, 121.1 , 123.1, 127.l(a)(4)

Exportation of Defense Articles Without a License and Aiding and Abetting To Do Same

Title 22 U.S.C., Sections 2778(b)(2), (c); Title 22 CFR 120, 121.1, 123, 127; Title 18 U.S.C., 2

Criminal Forfeiture – Title 18 U.S.C., Sections 98l(a)(l)(c); Title 28 Section 246l(c); Title 22 U.S.C., 401

Maximum penalty: Twenty years in prison and $1 million fine

AGENCIES

U.S. Homeland Security Investigations

U.S. Defense Criminal Investigative Services

U.S. Army, Criminal Investigation Division

National Security Division, Department of Justice

Link:

DOJ Press Release

Categories: Department of Justice (DOJ) Updates Enforcement Actions Export Control Indictments and Arrests International Traffic in Arms Regulations (ITAR)

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