Michael Balestra, Special Agent of the U.S. Department of Homeland Security, submitted a 16-page sworn affidavit on June 21, 2021 to Judge Jennifer Boal against Arif Ugur, a Turkish national, requesting that an arrest warrant be issued.
Ugur was accused of:
1) Conspiring to export defense technical data from the United States to Turkey without an export license;
2) Exporting technical data from the United States to Turkey without an export license;
3) Committing wire fraud by devising a scheme of fraudulently obtaining contracts from the Department of Defense (DOD).
Ugur is a 52-year-old Turkish national who lived in Massachusetts intermittently since 2002. He became a Permanent Resident of the United States in 2005.
According to the affidavit, Ugur founded in 2015 the Anatolia Group Limited Partnership in Massachusetts, described as a domestic manufacturer and supplier of specialty machinery and parts to DOD. He was the sole partner.
The Affidavit claimed that “between July 2015 and September 2017, Ugur acquired dozens of contracts to supply DOD entities with various parts and hardware items used by the U.S. military. Many of these contracts required that the parts be ‘domestic end product,’ manufactured in the United States. In order to obtain these contracts, Ugur falsely represented to DOD that Anatolia would manufacture the parts at facilities in the United States. In fact, Anatolia had no manufacturing capabilities whatsoever and many of the parts that Anatolia supplied to DOD and its affiliates were manufactured overseas, including at least one manufacturer in Turkey. Some of these parts were substandard and, therefore, could not be used for their intended military purpose.”
Ugur provided the manufacturer in Turkey “with technical specifications and drawings of the parts, which he obtained from the Defense Logistics Agency (DLA).” Several of the drawings and specifications required an export license which Ugur failed to obtain, prior to exporting them to Turkey. He registered his company with the DLA which granted him access to DOD bids after he agreed in writing to comply with the strict legal requirements — not disclosing, sharing or providing foreign entities access to defense technical data, according to the affidavit.
On August 13, 2015, DLA provided Ugur access to technical specifications, drawings and other information concerning active DLA solicitations. That same day via email, Ugur notified three Turkish nationals on how to access the DLA ‘Collaboration Folders’ through the internet, including its library of ‘military critical technical data,’ the affidavit alleged.
Special Agent Balestra wrote in the affidavit: “In an email dated on or about July 27, 2016, a DLA purchasing agent asked Ugur to verify the ‘address of the actual manufacturing’ of Bracket Assemblies for the purpose of arranging an origin inspection…. In an email dated on or about July 28, 2016, Ugur told the contracting agent that the Bracket Assemblies were being manufactured by Anatolia at 90 Woodmont Road in Milford, Connecticut. I believe this statement was false, as Ugur knew that the Bracket Assemblies were being manufactured by the Turkish Manufacturer in Turkey. Ugur subsequently caused the Bracket Assemblies to be delivered to DOD in late August 2016 without allowing DLA to first inspect the parts at the place of manufacture. I believe that Ugur intentionally avoided the origin inspection in order to conceal from DLA the true place of manufacture: Turkey. Upon receiving the Bracket Assemblies, DOD determined that they failed to meet contractual specifications. DOD declined to pay Ugur and Anatolia for the Brackets, and they attempted (unsuccessfully) to return the parts to Ugur.”
A similar violation allegedly took place when DLA awarded Anatolia a contract to manufacture Groove Pulleys. On August 23, 2016, Ugur emailed the technical data related to the Groove Pulleys to Individual D, an employee of AYPIK located in Turkey, according to Balestra’s sworn affidavit. DOD determined that the Groove Pulleys failed to meet the contractual specifications.
Arif Ugur was arrested on June 22, 2021 and charged in federal court in Boston with one count of wire fraud, one count of violating the Arms Export Control Act and one count of conspiracy to violate the Arms Export Control Act, stated in a press release the United States Attorney’s Office, District of Massachusetts.
“The charge of violating the Arms Export Control Act provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $1 million, or twice the gross gain or loss of the offense. The charge of conspiring to violate the Arms Export Control Act provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss of the offense,” according to the U.S. Attorney’s Office.
The U.S. Attorney’s Office pointed out that “the details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.”