## Facts

- Federal prosecutors charged multiple individuals and business entities with participating in alleged schemes to sell and transfer U.S.-origin defense articles to a putative Iranian buyer, Cyrus Hashemi.
- A fourth superseding indictment alleged five separate conspiracies involving different contemplated arms transactions, including one described as the “Dergo Establishment” deal.
- The government alleged defendants sought U.S. governmental export approvals by conspiring to submit false statements to U.S. agencies about the true destination and end user of the defense articles.
- The indictment also included substantive false-statement counts tied to documents allegedly filed with U.S. authorities in connection with the Dergo transaction.
- Samuel Evans was alleged to be the lead intermediary, named in substantive counts and as a participant in each alleged conspiracy.
- Defendants moved pretrial to dismiss the indictment on multiple grounds, including lack of extraterritorial application, defective conspiracy pleading, due process/fair notice, and alleged government misconduct in an undercover operation involving Hashemi.

## Issues

1. Whether the Arms Export Control Act (AECA) and related federal criminal provisions could apply to largely foreign conduct involving U.S.-origin defense articles and alleged fraud directed at U.S. export-control processes.
2. Whether charging five separate conspiracies was facially defective as duplicative, multiplicitous, or otherwise insufficiently pleaded.
3. Whether prosecution was barred by due process principles, including alleged lack of fair notice and claims of outrageous government conduct tied to the foreign-policy environment and undercover activity.
4. Whether the substantive false-statement counts adequately alleged offenses based on the identified filings and alleged misrepresentations regarding destination and end use.

## Decision

- The court denied defendants’ motions to dismiss and sustained the fourth superseding indictment.
- The court held the AECA and related provisions could reach the charged conduct because the alleged scheme targeted U.S. regulatory approval processes and involved false statements to U.S. agencies about destination and end user.
- The court ruled the conspiracy counts were not fatally defective at the pleading stage; whether the evidence showed one or multiple conspiracies was primarily a trial question.
- The court rejected due process and fair-notice challenges, finding the statutory and regulatory scheme provided adequate notice that unauthorized transfers and falsified destination representations were unlawful.
- The court held allegations of undercover involvement and investigative tactics did not justify dismissal for outrageous government conduct.
- The court found the false-statement counts sufficiently pleaded as to the documents filed, the agencies involved, and the nature of the alleged falsity.

## Legal Principles

- Export-control statutes may apply to foreign-centered conduct when the charged scheme involves U.S.-origin defense articles and a substantial nexus to U.S. governmental interests, including fraud on U.S. licensing or regulatory processes.
- An indictment charging multiple conspiracies is not subject to dismissal merely because defendants argue the conduct constitutes a single broader conspiracy; the existence and scope of conspiracies commonly present factual issues for trial.
- Due process does not bar prosecution where the governing statutes and regulations provide fair notice that the charged conduct is prohibited, notwithstanding contemporaneous foreign-policy developments or alleged informal assurances.
- Dismissal for outrageous government conduct is reserved for exceptional cases; undercover participation and sting tactics generally do not meet that standard absent extreme facts.
- For false-statement offenses, an indictment is sufficient if it identifies the relevant submissions to U.S. authorities and alleges materially false representations (such as destination/end-user misstatements), leaving disputes over falsity and materiality for trial.

## Conclusion

The court allowed the prosecution to proceed, holding that the AECA-based indictment adequately alleged extraterritorially reachable conduct tied to fraud on U.S. export controls, properly pleaded multiple conspiracies, and stated viable false-statement charges, with due process and government-misconduct arguments reserved for trial-based defenses.


United States v. Evans, 667 F. Supp. 974 (S.D.N.Y. 1987)