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Businessman Fined for Smuggling High-Tech Systems

August 12, 1986|WILLIAM C. REMPEL | Times Staff Writer

A fugitive Orange County businessman who, authorities say, smuggled more than $15 million of high-technology equipment to the Soviet Union has been fined $1.24 million and will be denied all export privileges for 30 years, the Department of Commerce announced Monday.

Charles J. McVey, 61, of Villa Park, indicted more than three years ago on charges that he shipped sophisticated computers, oscilloscopes and a satellite image-processing system that "have direct military uses" to the Soviets, is listed today among the Customs Service's most wanted fugitives.

He reportedly lives in Switzerland and has yet to stand trial on the charges.

The Commerce Department fines also were levied against three of McVey's Anaheim-based companies--Vanguard International Ltd., Facilities Management Ltd. and Land Resources Management Inc.

According to federal court records, McVey concealed shipments of restricted technology to the Soviet Union by filing false export documents that claimed he was shipping unrestricted televisions, videocassette recorders, typewriters and air conditioners to Switzerland.

The computer systems--including sophisticated mainframe equipment, software and disk drives--were then transshipped to such Soviet customers as the Geology Institute of the USSR, the Soviet Space Institute and the Computer Research Institute in Minsk, the government said.

At one time, McVey sent employees of his Vanguard International company to Moscow to hold computer training classes for a dozen Soviet engineers in Minsk, court records alleged.

McVey, a high-tech entrepreneur and physicist, was a frequent visitor to the Soviet Union prior to his indictment in 1983. He once boasted to a reporter of dining privately with Leonid I. Brezhnev in the late Soviet leader's Moscow apartment.

U.S. prosecutors say McVey used a network of Swiss-based companies to disguise his shipments of U.S.-made technology to the Soviets. However, that network collapsed in 1982 after Customs Service agents intercepted a computer that they say was destined for the Soviet Union.

In what investigators claim was an attempt to avoid detection, McVey flew the computer from Southern California to Mexico in a rented private plane. In Mexico City it was loaded aboard a jet bound for Amsterdam. However, when the plane made a scheduled stop in Houston, Customs Service agents found the container and replaced its high-tech cargo with sand. The sand reportedly was delivered to the Space Institute of Moscow, and McVey fled the United States after posting a $1-million bond.

Also seized by Customs Service agents in a subsequent search of McVey's Anaheim offices was a multi-spectral electronic scanner that Secretary of Defense Casper W. Weinberger described as "indispensable to military, air and satellite reconnaissance."

Agents said in court records that McVey shredded documentary evidence before it could be seized.

The $1.24 million in fines announced Monday by the Commerce Department is the second-largest administrative levy ever assessed for export violations. A record $1.5 million was assessed against a New England firm in 1984.

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