Chicago-area company, owner charged with illegally exporting, importing military articles

CHICAGO — A federal indictment was unsealed Feb. 18 against a suburban company, its president and a former employee for unlawfully exporting and importing sensitive military articles, including components used in night-vision systems and on the M1A1 Abrams tank, which is the main battle tank used by the U.S. Armed Forces.

These charges were announced by the following agency heads:  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; James C. Lee, special agent in charge of the Chicago Office of the Internal Revenue Service; and Brian Reihms, special agent in charge of the Department of Defense’s Criminal Investigative Service in Chicago.

Vibgyor Optical Systems Inc., a company located in Arlington Heights, Illinois, purported to manufacture optics and optical systems, including items that were to be supplied to the U.S. Department of Defense (DoD). Instead of manufacturing the items domestically, as it claimed, Vibgyor illegally sent the technical data for, and samples of, the military articles to manufacturers in China. The company then imported the items from China to sell to its customers, including DoD prime contractors.

Bharat “Victor” Verma, 74, of Arlington Heights, Vibgyor’s president, and Urvashi “Sonia” Verma, 40, of Chicago, a former Vibgyor employee and owner of a now-defunct company that operated as a subcontractor for Vibgyor, were also charged. The defendants were charged in an indictment returned by a federal grand jury in January and made public this week.

According to the indictment, between November 2006 and March 2014, the defendants conspired to defraud the United States and violate both the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). AECA prohibits the export or import of defense articles and defense services without first obtaining a license from the U.S. Department of State;  it is one of the principal export-control laws in the United States.  Under ITAR, any person seeking to import items designated as defense articles on the U.S. Munitions Import List is required to obtain a permit to do so from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Vibgyor won subcontracts to supply optical components and systems to DoD prime contractors by misrepresenting the location of manufacture of the items it supplied. Bharat Verma falsely claimed that the items Vibgyor supplied were manufactured domestically, when they actually had been manufactured in China, based on information the company illegally exported to Chinese manufacturers. In addition to illegally providing to China technical data for a military item, Urvashi Verma attempted to ship an example of one of the military items to the Chinese manufacturer.

“The Arms Export Control Act and the International Traffic in Arms Regulations are vital to preventing embargoed countries from gaining access to our sensitive military technology, and to ensuring that our armed forces are not issued substandard equipment,” stated Fardon, after the charges were announced.  “Where companies and individuals seek to violate AECA and the ITAR, we will not hesitate to act.”

Vibgyor, Bharat Verma, and Urvashi Verma are charged with one count of conspiracy to violate both the AECA and the ITAR and one count of conspiracy to defraud the United States; each offense is punishable by up to five years’ imprisonment. The defendants are also charged with one count of violating the AECA, with a maximum possible penalty of 20 years in prison and a fine up to $1 million. Vibgyor and Bharat Verma were also charged with international money laundering, an offense with a maximum possible sentence of 20 years’ imprisonment and a fine up to $500,000.

The government is being represented by Assistant U.S. Attorneys Diane MacArthur, Bolling W. Haxall, and Shoba Pillay, and Trial Attorney Casey Arrowood of the Department of Justice’s National Security Division.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.