NEW YORK - U.S. Customs agents used a "classic sting operation" setting up phony businesses in New York and Tokyo to crack down on the smuggling of illegal bugging devices, government officials said Wednesday. The operation, employing some of the same spook technology it targeted, came in from the cold with a series of coordinated raids Wednesday on "spy stores" in more than 20 cities from coast to coast.
Thirteen people 10 Americans and three Japanese were charged with smuggling "electronic surreptitious interception devices." Eleven of the suspects were taken into custody in Operation Clean Sweep, law enforcement officials said. A Clifton, NJ company was named in the concurring indictment.
One suspect, arrested in New York, was a Japanese executive of Micro Electronic Industries Co. Ltd. of Tokyo, described in the 106 page federal complaint as the largest exporter of illegal listening devices to the United States.
Micro shipped more than 4,000 items worth an estimated $3 million between October 1993, when the investigation began, and February of this year allegedly falsifying documents to mislead customs officials about their true purpose and value, the complaint said.
It outlined three conspiracies to import the devices by false documentation and to market them wholesale or retail. A separate complaint alleged a fourth con spiracy by two New York men who, according to officials, were arrested Wednesday in the act of planting a bug in an office conference room.
Federal law prohibits the im port, sale, or even advertising of eavesdropping devices for private use. Some of the items displayed at a news conference Wednesday were as sophisticated as those used by the FBI and other agencies, officials said.
Among them were tiny monitoring devices powered by the very phone line they tap; and a ball point pen, a small desk calculator, and a power strip...all concealing tiny transmitters that can eavesdrop on a room. "I could use a lot of this equip ment to do my job. It doesn't get much better than this," said customs Commissioner George J. Weise
"These illegal bugging and wiretapping devices are being used to deprive Americans of privacy, and to carry out such crimes as drug dealing, corporate espionage and kidnapping," said Mary Jo White, the U.S. Attorney for Manhattan.
One item on display was a pocket size transmitter that Weise said had been concealed in a shipment of Colombian cocaine, enabling druglords to listen for any sound indicating the drugs had been discovered.
The complaint said customs officers set up an "American Undercover Company" in Manhattan to gather evidence on the smuggling of bugging devices. Customs turned an existing company in Japan into a "sting" by recruiting two of its employees, one working in New York and the other in Japan, as "confidential informants" after they pleaded guilty to misdemeanor charges and agreed to cooperate.
Many so called spy stores, including several in New York, have sold bugging devices openly for years, in some cases promoting them in large newspaper ads. But White said investigators collected evidence some through legal eavesdropping that the merchants knew they were violating the law. To make the charges stick, prosecutors must prove criminal intent, White said.
The raids were carried out in New York, Philadelphia, Chicago, Dallas, Miami, Reston, Va.; Denver, New Jersey, Nevada, Georgia, Missouri, Utah, and Washington state.
Eleven arrests, mostly in New York and New Jersey, included Norman Buitta, owner of Quark Spy Centre, a well known Manhattan store, and Ken Taguchi, identified by customs officials as an executive in charge of exports for Micro Electronics. Other U.S. companies named in the indictment include Allied Products International Inc., of Clifton.
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Reprinted from the New York Daily News
Also named in the eight count indictment was his com pany, Spy Factory Inc., and two top executives. They face up to five years if convicted. The indictment comes five months after federal agents raided 40 stores selling spy equipment in 24 cities. Three of the stores were in New York. Those stores were not affiliated with the Spy Factory. Agents seized $2.9 million in illegal listening devices that had been exported by the Micro Electronic Industries Co. Ltd. of Tokyo. They arrested 15 people, including three Japanese businessmen.
The ilems seized included tiny wiretapping devices and micro size eavesdropping transmitters concealed in calculators, phone jacks and ball point pens. Much of the equipment was sold to private investigators. young professionals and suspicious spouses, officials said. But on at least two occasions the gadgets were bought by drug dealers who were transporting cocaine from Colombia and by kidnapers who were carrying out an abduc tion and extorlion plot. The sale of spying devices is restricted to law elll'orcement agencies. Last month, one of the Japanese businessmen, Ken Taguchi, pleaded guilty to conspiring to manufacture illegal wiretappillg and bugging equipment and to smuggle and sell the equipment in the U.S.
Also, private investigators Brian Dunne. a retired NYPD detective, and Anthony Palma, a retired NYPD officer, pleaded guilty to related charges. Dunne and Palma worked at the Spy Store on Christopher St., one of three such stores targeted in the April raids. The others were Quark Spy Centre on Third Ave. in midtown and Spy Master in Rockville Centre, L.I.
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Reprinted from the New York Times
For several years, the so called spy shops have been popping up around the country, selling advanced surveillance equipment, like transmitters hidden in pens, calculators or telephone jacks. The stores appear legitimate; they even advertise their wares in catalogues, on billboards and in newspapers.
But Federal authorities said many devices these shops sell are not only illegal, but have been used by criminals for corporate espionage, drug dealing and kidnapping.
The United States Customs Service raided more than 40 espionage shops yesterday morning in cities across the country. Fifteen people, including three Japanese business men, were charged in what prosecutors called an international scheme to smuggle millions of dollars worth of illegal bugs and wiretapping devices. By yesterday afternoon, nine people had been arrested in New York and New Jersey; all but one were released on bail.
Officials said the raids were in tended to squash a growing, multi million dollar industry that was giv ing people access to eavesdropping equipment once only available to the Federal Bureau of Investigation and Dther law enforcement agencies.
The shops have become a popular fixture in New York City and surrounding suburbs, and yesterday's raids included seven stores in the region. The stores sell not only legal equipment like powerful binoculars, investigators said, but also surveillance equipment that allows people to eavesdrop illegally on others without their consent. "This prosecution should cripple the sources of source of these devices in the United States," said Mary Jo White, the United States Attorney in Manhattan. She said the listening devices sold in the stores "made possible the total and secret destruction of our right to privacy."
Among the devices seized were calculators, pens, telephone jacks and electric power strips that had been equipped with minuscule microphones and transmitters, known in the intelligence trade as bugs. The bugs were designed to pick up conversations and transmit them more than a mile away to a receiver the size of a pack of cigarettes.
"This is state of the art," said Robert Van Etten, the special agent in charge of the customs office in New York City. "It doesn't get much better than this.
Under the 1968 Omnibus Crlme and Safe Streets Act, it is illegal for ordinary citizens to own, manufacture or sell eavesdropping equipment specifically designed for "the surreptitious interception of wire, oral or electronic communications." Only law enforcement agencies are allowed to buy or use such devices and then only with a court order.
Prosecutors said the equipment was made by two Tokyo companies: Micro Electronics Industries and T. Satomi & Company. They shipped the goods illegally into the United States, disguising them on customs documents as "microphones."
The equipment was then distributed through several chains of spy stores from coast to coast, Federal agents said. The largest distributor was the Spy Factory, a national chain with 16 stores, based in San Antonio. But smaller businesses, like the Quark Spy Centre at 537 Third Avenue in midtown Manhattan, near East 36th Street, and Allied Products International in Clifton, N.J., also sold the equipment, officials said.
Federal officials said that during the 17 month investigation, at least 4,400 illegal devices, selling for about $3 million, were shipped to the stores that were raided yesterday.
Mr. Van Etten said the listening equipment has become popular among drug dealers, as well as business executives seeking to spy on competitors and even spouses trying to uncover infidelities.
The investigation that led to the raids began in October 1993, after customs agency arrested two people, one in Manhattan and one in Tokyo, on charges of smuggling spy equipment into the country. The suspects, who have not been identified, agreed to cooperate with Federal agents and to secretly record conversations with others in the business.
In early 1994, the customs agency set up a fake import company in New York City to gather evidence against the two Japanese manufacturers and several local shops. Agents posed as importers interest ed in entering the spy equipment business. Other agents visited spy shops in 10 states, posing as buyers.
With their own high tech devices, the agents secretly recorded conversations with the owners and managers. In some cases, the agents posed as drug dealers. In others, they pre tended to be husbands looking to spy on their wives.
Several store owners arrested yesterday told Federal undercover agents that they knew the equipment was illegal in the United States, according to the complaint.
Those arrested yesterday in the New York City region were Victor 1. Intiso, owner of Allied Products In ternational in Clifton, N.J.; Norman T. Buitta and G. Brian A. Griffiths owners of the Quark Spy Centre in Manhattan; Brian Dunne and Anthony Palma, employees of the Spy Store on Christopher Street in Manhattan and in Melville, L.l., Philip J. Rosen, owner of Spy Master in Rockville Centre, L.l., and Michael Falcon, owner of the Spy Mart in Morganville, N.J.
Last year, customs agents in Miami found a transmitter made by Micro Electronics Industries inside a shipment of 500 kilograms of cocaine from Colombia, Mr. Van Etten said. The bug apparently alerted the dealers that Federal agents had found their drug cache.
In another case in November 1994, a group of kidnappers used the same type of transmitter, Ms. White said. One of the kidnappers used the transmitter, hidden in his car, to signal to three other men in another car that the time was ripe to swoop in and kidnap the victim, she said.
Private security experts say there has been a steady, though not spectacular, increase in spy shops around the country in the last decade. What is driving the trend is not entirely clear, they said, though one reason is that the equipment is smaller and cheaper to manufacture than ever before.
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Reprinted from Associated Press
They face up to 40 years in prison and fines of up to $1.5 million each.
Store owner John Demeter and three of his workers were found guilty Wednesday despite claims that they didn't know it was illegal to possess, sell, import or export such items as a light bulb containing a listening device.
A similar case is set for trial in New York.
Prosecutors presented evidence that Demeter and the company had been warned at least twice the devices were illegal, including a letter to federal investigators in which Demeter explained the law.
"They had two bites at the apple and they still continued to do the illegal business,'' Special Assistant U.S. Attorney Kevin Kozak said.
Defense attorneys did not return phone messages.
Federal investigators say they broke up an international scheme to supply the illegal devices to stores across the United States, including Spy Shops International. Authorities raided 40 stores in 24 cities in 1994, including New York, Philadelphia, San Francisco and Chicago.
Authorities seized a light bulb, pens, calculators, and an electrical plug adapter that doubled as bugging devices. One was capable of picking up conversations through a concrete wall.
The case decided Wednesday was the first to go to trial. Prosecutors said some of the equipment was sold to a U.S. Customs agent who said he wanted to use it for corporate spying. In another instance, phone-tapping equipment was sold to an agent posing as a Russian national, who refused to show any identification. He was shown how to tap a U.S. phone.
The defense said the store sold only to people who said they would export the items, and the store thought that made the transactions legal.
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Reprinted from Newsday
Mary Jo White, U.S. attorney for the Southern District, said the case is part of a continuing investigation by the U.S. Customs Service that has targeted the smuggling of bugging and wiretapping equipment and their sale and use in this country.
"These arrests mark the first prosecutions of buyers and users," White said yesterday. David Schechter of Louisville, Ky., the former general counsel for BATUS Inc., a subsidiary of the tobacco company Brown & Williamson, was one of those named in a federal complaint unsealed in U.S. District Court in Manhattan.
Also charged were William Prudente, 39, of Levittown, and Dean Stull, president of a New Jersey plastics company. All three men could face up to five years in prison and fines of up to $250,000 if they are convicted.
As part of the probe, federal prosecutors in April raided spy shops around the country, including the Spy Store in Melville and its sister shop located on Christopher Street in Manhattan.
The complaint charges that Schecter purchased a sophisticated wiretapping device in December, 1993, from a Manhattan spy shop that was capable of transmitting all conversations that took place on a multi-line phone.
Schechter also bought an audio surveillance device that, according to the shop catalog, enables someone to listen to a conversation "through a wall," according to investigators.
Records show that Schechter paid to have the informant install the equipment. A month later, the informant flew to Louisville and Schechter escorted him to an office at the Brown & Williamson Tower that was not his.
The informant installed the transmitter into a phone there, which permitted Schechter to surreptitously receive and record the calls in the office, investigators said.
The complaint charged Schechter paid the informant to service the wiretap for the next two years. Customs agents determined that Schecter had retired from BATUS, which no longer exists. Representatives of the parent company, BAT Industries, told the agent that all business relating to the company is now handled by Brown & Williamson.
Schechter was arraigned in federal court in Louisville, where he was released on a $100,000 bond. Brown & Williamson could not be reached for comment. Prudente was charged in a separate scheme involving illegal bugging equipment. Prudente has posed as a New York City police surgeon and inspector, an agent with the Bureau of Alcohol, Tobacco and Firearms and as an anti-terrorist expert, investigators said.
Prudente was released on $75,000 bond after his arraignment yesterday in Manhattan federal court. Stull, president of a New Jersey firm that manufactures plastic caps for shampoo and toothpaste, was also charged with purchasing illegal bugging and wiretap equipment from a Manhattan spy shop. Prosecutors said late yesterday that he has agreed to surrender to authorities.
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Reprinted from a Washington DC Newspaper
Jamiel's companies based in New York City have used many corporate names such as, or similair to: Communications Controls, Communications Control Systems, Communications Control Systems Ltd, CCS Communications Control Systems, The Spy Shop, The Spy Shop Ltd, The CounterSpy Shop, The CounterSpy Shop of Mayfair London, Surveillance Technology Group, Law Enforcement EquipmentCorp and more recently the Spyzone on the Internet.
After close review of his sales literature and product specification sheets by a number of experts in the field, it appears he provides the same eavesdropping equipment from the same manufacturer in Japan that was sold by the other Spy Shops. Gee, he wasn't arrested with the others, was he?
Question One: If he does sell the same equipment... how does he get the same, illegal bugging devices, into this country legally?
Question Two: If he does sell the illegal Japanese bugging equipment... how come he wasn't busted like the 40 other stores around the USA? Is he still doing stings for the government? Did they decide to leave him off the list for his past or current cooperation?
Anyone know the answers?