Nov. 10 (UPI) -- Federal authorities have arrested three people, including a prominent Louisville businessman, on accusations that they conspired to send export-controlled military information to China.
The indictment unsealed Wednesday names Phil Pascoe, 60, and Monica Pascoe, 45, both of Floyds Knobs, Ind., as well as Scott Tubbs, 59, of Georgetown, Ky., and Quadrant Magnetics LLC as defendants. Phil Pascoe is the president of Quadrant.
The charging document accuses the trio and the California-based engineering firm of sending a company located within the Asian nation some 70 drawings of technical data in violation of the Arms Export Control Act and the International Traffic in Arms Regulations.
Federal prosecutors said the drawings were owned by two U.S. companies and related to aircraft, submarines, radar, tanks, mortars, missiles, infrared and thermal imaging targeting systems and Department of Defense fire control systems.
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Quadrant is also accused of importing rare earth magnetics from a company in China that it sold to two U.S. companies, which used them in components that were sold to the Pentagon for F-16 and F-18 combat aircraft as well as other military assets.
Rare earth magnates sold to the Department of Defense must be either be produced in the United States or an approved country, which China is not, federal prosecutors said, accusing Quadrant of violating the Defense Acquisition Regulations System.
The three defendants have been each charged with wire fraud, exporting technical data without a license and smuggling goods from the United States, each of which comes with a maximum prison sentence ranging from 10 to 30 years.
The announcement comes nearly a year after Kentucky Gov. Andy Beshear announced in January that Quadrant has agreed to build a new $95 million rare earth magnet manufacturing facility in Louisville, where the company has been operating an engineering, machining and assembly hub since 2001.
Beshear's spokesperson Crystal Staley told UPI in an emailed statement that they have just learned of the charges are reviewing them.
"We fully support any and all efforts to protect our national security and are grateful for the hard work of the dedicated professionals in our federal law enforcement agencies," she said.
The Cabinet for Economic Development also told UPI that it recognizes the severity of the charges and was awaiting more information.
"The state tax incentive agreement preliminarily approved through the Kentucky Business Investment program in January for the company's proposed investment to manufacture rare earth magnets in Kentucky are performance based in nature with no up-front money exchanged as part of the agreement," it said.
"The agreement has not received final approval and no action has been taken by the company to claim tax incentives from the state."
The charges are the latest the United States has filed against individuals accused of illegally sending China information.
On Monday, a federal judge sentenced retired U.S. Army helicopter pilot Shapour Moinian to nearly two years behind bars for acting as an agent of the Asian nation and accepting tens of thousands of dollars from representatives of the country in exchange for aviation-related data.
