Sirchie Pays Maximum $2.5M Administrative Civil Penalty To Settle Charges Of Aiding And Abetting Violations Of BIS Export Denial Order

WASHINGTON, D.C. - The Commerce Department’s Bureau of Industry and Security (BIS) announced today that Sirchie Acquisition Company, LLC (Sirchie LLC), a forensics and police equipment supplier based in Youngsville, North Carolina, has entered into an administrative Settlement Agreement with BIS to settle allegations of aiding and abetting actions taken to evade a denial order issued by BIS in September 2005.  The company has also entered into a three-year Deferred Prosecution Agreement with the United States Department of Justice  This settlement marks the first BIS administrative case in which the administrative civil monetary penalty amount of $250,000 per violation has been imposed for violations of the Export Administration Regulations (EAR).   

Under the Settlement Agreement with BIS, Sirchie LLC will pay the maximum aggregate administrative civil penalty of $2.5 million for the 10 charged violations of the EAR.  Additionally, pursuant to the terms of the Deferred Prosecution Agreement, Sirchie LLC will pay a total of $10.1 million in criminal fines, including expending $1.5 million over 3 years on the implementation of an export compliance program required by the terms of the Deferred Prosecution Agreement. 

In December 2005, Sirchie Fingerprint Laboratories, Inc. (SFPL) and its then President and Chief Executive Officer, settled with BIS concerning allegations that they had engaged in a scheme designed to evade the licensing requirements of the EAR by which SFPL products controlled for crime control reasons were diverted for ultimate end use in the People’s Republic of China and Hong Kong.  SFPL agreed to pay a $400,000 administrative civil penalty and accept a 5-year suspended denial of its export privileges, and its then President and Chief Executive Officer (hereinafter “the denied person”) agreed to a 5-year denial of his export privileges in settlement of the allegations (hereinafter “the denial order”).  In addition, the denied person pled guilty in U.S. District Court for the Eastern District of North Carolina to one count of criminally violating the International Emergency Economic Powers Act. 

Information obtained during an investigation conducted by the Washington Field Office of BIS’s Office of Export Enforcement determined that between February 2006 and November 2007, the denied person was directly involved in SFPL export transactions on at least ten occasions.  SFPL aided and abetted actions taken to evade the denial order by providing the denied person with requests for price quotes for items to be exported, receiving pricing information from him, and engaging in export transactions involving these items.  The assets of SFPL were acquired by Sirchie LLC on January 15, 2008, after the violations had occurred and BIS’s investigation had begun.   

 “The fact that Sirchie LLC is the first U.S. company to receive the enhanced civil penalty of $250,000 per violation reflects of the gravity with which BIS views violations of BIS denial orders.  BIS will impose significant sanctions where a company repeatedly allows an individual convicted of export control violations and denied his export privileges to continue to participate in export transactions,” said Tom Madigan, Acting Deputy Assistant Secretary of Commerce for Export Enforcement.  “In addition, a company that has previously violated the EAR must change its corporate culture and take prompt and effective corrective action to comply with the EAR and any orders issued thereunder.  Failing to do so will lead to additional, significant liability for a company or its successor.” 

Acting Deputy Assistant Secretary Madigan praised the BIS Office of Export Enforcement’s Washington Field Office, and particularly the efforts of Special Agent Philip Kuhn and Intelligence Analyst Janette Sessa-Ward for their outstanding work on this case. 

BIS controls exports and re-exports of dual-use commodities, technology and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability and foreign policy.  Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations.  For more information, please visit www.bis.doc.gov.

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