NASHVILLE, Tenn. - Four former officers of Nashville arms manufacturer Sabre Defence Industries, LLC (SDI-US), pleaded guilty Monday to conspiring to defraud the United States and to violations of the Arms Export Control Act (AECA), following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
SDI-US Corporate President Charles Shearon, 55, of Ashland City, Tenn.; Chief Financial Officer Elmer Hill, 64, of Brentwood, Tenn.; Director of Marketing and Sales Michael Curlett, 44, of Hermitage, Tenn.; and International Shipping and Purchasing Manager Arnold See, Jr., 54, of Antioch, Tenn., entered guilty pleas before Chief U.S. District Court Judge, Todd J. Campbell. Sentencing is set for Aug. 1 at 10 a.m.
The four men, along with co-conspirators SDI-US and Guy Savage 42, a citizen of the United Kingdom and owner of SDI-US, were indicted in January for conspiracy to defraud the United States, conspiracy to commit mail fraud and wire fraud, making false statements on export and import documents, and for conspiracy to violate the AECA.
"The national security implications of this case cannot be underestimated," said Raymond R. Parmer, Jr., special agent in charge of ICE HSI in New Orleans. "HSI agents in Nashville foiled a potentially dangerous smuggling scheme. In the wrong hands, technology like this could be used to inflict harm upon America or its allies."
"The illegal import, export and transfer of firearms and related components poses a great risk to America and our allies," said U.S. Attorney Jerry Martin. "Those who engage in such irresponsible and illegal activity will come to realize the commitment of our law enforcement partners to safeguarding America and the high priority given to this issue by the Department of Justice."
According to the indictment, Shearon, Hill, See, and Curlett conspired with Savage to illegally import and export regulated firearms and firearm components and technology to and from the United States.
During the plea hearings, Shearon, Hill, See, and Curlett stated that Savage directed their illegal activities from his personal residences in the United Kingdom, as well as from a related company, Sabre Defence Industries, LTD (SDI-UK), a licensed manufacturer, distributor, and importer of firearms and firearms components, also owned by Savage and headquartered in the United Kingdom. All defendants admitted that they had conspired to export firearms components, which are listed as defense articles on the United States Munitions List (USML), from the United States to an international location, without first obtaining a license or written authorization from the Directorate of Defense Trade Controls (DDTC) of the United States Department of State, as required.
They further admitted that they had conspired to import into the United States from international sources, suppressors, also known as silencers, which are also defense articles listed on the USML, without having first obtained the required license and authorization from the ATF.
The import and export of defense articles, such as firearms or firearms components or other military items on the USML, are strictly controlled by the AECA and its attendant regulations, the International Trafficking in Arms Regulations (ITAR).
At the hearing, Shearon, Hill, and See admitted that, since 2003, they had conspired with Savage to falsify shipping records, conceal unlicensed firearms components in false bottoms of shipping cartons, and mislabel and undervalue shipments of firearm components, in an effort to avoid scrutiny by U.S. Customs and Border Protection control officers.
Curlett admitted that his participation in the conspiracy began with his employment with SDI-US in 2007. Each of the four defendants admitted that they had used email accounts and other forms of electronic communication to communicate with each other, and with Savage and other individuals located in the United States, the United Kingdom, and elsewhere, to ship firearms components from the United States to SDI-UK, without first obtaining an export license or permission and that they used international common carriers to ship the restricted items to and from the United States.
Shearon, Hill and See further admitted that, at the direction of Savage, they sought to conceal their illegal import and export activities by maintaining two sets of business books to record the company's accounts and balances, and its export and import activities. On Feb. 8, 2011, Savage was arrested in the United Kingdom with assistance from the London Metropolitan Police Service-International Assistance Unit, and the Department of Justice-Office of International Affairs. Searches were conducted in conjunction with the arrest and the Department of Justice is seeking Savage's extradition from the United Kingdom to the United States to stand trial.
Additional assistance was provided by trial attorneys from the Department of Justice-National Security Division.
Assistant U.S. Attorney John K. Webb and Department of Justice Trial Attorney John Han, from the Organized Crime and Racketeering Section, are representing the United States.