2 Plead Innocent in Exporting of Restricted Gear

SACRAMENTO — A Costa Mesa couple charged with conspiring to ship sophisticated electronics gear to Hong Kong and Pakistan pleaded not guilty Monday in federal court.

Attorneys for Arnold and Rona Mandel said their clients believed they were operating legally from July, 1982, to August, 1983, when their Grass Valley and Auburn firms shipped the restricted equipment to a Hong Kong importer, who shipped it to Pakistan.

“They were completely unwitting as far as any knowledge or involvement in attempts to assist in the nuclear arms development of Pakistan or any other country,” said San Francisco attorney Mark Topel, who represents Arnold Mandel.

“My clients attempted to comply with the letter of the law.”

During a brief arraignment hearing before Magistrate Esther Mix, the Mandels spoke only to confirm their identities and enter their not-guilty pleas.

Federal prosecutors decline to provide details of the equipment or its potential uses except to say that it is considered vital to U.S. strategic interests.

“It’s extremely high-technology testing equipment,” said George O’Connell, an assistant U.S. attorney. “It can be used for high-energy research.”

A federal grand jury indictment on July 17 accused the Mandels of making 15 shipments of the controlled equipment to Hong Kong without a license and trying to cover up the scheme.

A separate indictment issued the same day charged Hong Kong businessman Leung Yiu Hung of selling the gear, worth more than $993,000, to Pakistan in violation of U.S. trade restrictions.

The equipment was manufactured by Tektronix Corp., an Oregon company that O’Connell said simply filled the Mandels’ orders and was “completely innocent” of wrongdoing.

The Mandels are each charged with one count of conspiracy, 10 counts of illicitly exporting controlled technology and six counts of submitting false statements to a government agency. The charges could bring a maximum prison term of 85 years and fines up to $550,000 each.