Business - Arizona Phoenix man indicted for violating arms export law Company allegedly sold military aircraft engines to Venezuela

By Bob Christie

Associated Press

PHOENIX (AP) -- A Phoenix man and the company he heads have been indicted by a grand jury for violating federal arms export laws by shipping military aircraft engines to the Venezuelan air force and providing training on how to maintain them.

The indictment announced last week alleges that Floyd D. Stilwell and Marsh Aviation Co., sent military turboprop engines to Venezuela and provided training to the Venezuelans without getting a required federal export license. The U.S. government has forbidden the export of military hardware to Venezuela since 2006 because it does not cooperate with anti-terrorism efforts.

"Our national security depends upon U.S. companies abiding by our export laws. Failure to do so harms our national interests." U.S. Attorney for Arizona Dennis Burke said in a statement.

Stilwell is president and CEO of Marsh, which is based in Mesa, Ariz. The indictment said he received $1.8 million into his personal bank account for the deal.

Stilwell has been issued a court summons, according to the U.S. attorney's office in Phoenix.

Calls to the company and to Stilwell's listed home phone number were not returned.

Court records show the company filed for Chapter 11 bankruptcy reorganization last year but is still in business. Stilwell signed a court document as president and CEO of Marsh that was filed earlier this month.

According to the 10-page indictment charging conspiracy and arms export law violations, Stilwell, his company and others began the conspiracy in November 2005 and ran it until Feb. 5, 2008.

Stilwell and his company allegedly agreed to overhaul and upgrade T-76 turboprop engines for use on Venezuelan air force OV-10 Bronco armed reconnaissance planes, according to the indictment. A former Venezuelan air force officer contacted Stilwell by e-mail about the engine deal, and told Stilwell he knew of the arms embargo and ways to get around it.

Stilwell allegedly agreed to overhaul and upgrade six engines, disassemble them and disguise them as civilian models for export, and sent a Marsh employee to Venezuela to reassemble the engine. The indictment shows only four being shipped.

If convicted, Stilwell could receive 10 years in prison for the arms violations and five years on the conspiracy charge.

Published: Mon, Nov 1, 2010


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