The Harry and the Turbocharger Story

                                                 The Harry and the Turbocharger Story

                                                                           1990

                                              A true story about selling military parts

                                         Written 12/2015 and Re-written 05/23/2016

                                                                  Howard Yasgar

For most of my career I have been in the automotive, marine and truck parts business, and like most companies we have always exported quite a bit overseas.

Most companies that export follow the rules, by not shipping to countries that are on our government’s  blacklist.

However there are always companies that will cheat, and they all do it  for a variety of reasons.

Some cheat unknowingly, because they are selling to a export agent that is doing the cheating.

Some cheat because they are agents of the particular blacklisted country, but most companies cheat just for the money.

We found out that companies are caught all the time cheating and they are prosecuted by the government.

When the parts being exported are military in nature, exporting becomes a little more serious and a lot more complicated.

First of all you need a Department of state license, which is not cheap, it’s around $1800.00 a year.

Then you must monitor the countries that are on our countries black list, a list that changes often.

But the next most important thing is, you must know who the  end user customer is.

If you are shipping for an agent, he must advise you of the end user. And that’s a problem as agents usually don’t want to tell you who their customer is.

But it’s the law, and to protect yourself you must ask for an end user certificate.

If the purchasing  agent refuses to provide you an end user certificate, the prudent thing to do is cancel the order.

When exporting military spare parts the Department of state reviews the part numbers of the items you are shipping just to  be certain if the country they are shipping to actually has the vehicles that use the parts. They want to be sure the items are actually  for the country you request the license for.

It’s a lot of work but the Department of state does it, and if they suspect the parts might be for another country they will not issue an export license.

Our Company learned all of this from  U.S Customs agent who showed up at our door one day.

He had in his hands a bunch of our companies invoices.

He said,  are these your invoices, I looked at them and they were ours.  

The Custom agent said, did you know these parts are for the M60 Tank?

I said no, they are for a Caterpillar tractor.

The Customs agent said you are lucky, the parts you sold are for Caterpillar tractors, but they also fit the M60 Military tank.

Your customer, knowing the parts fit a tank, sold them to a company in Canada. The Canadian company sold them to a company in France, and the French company tried to ship them to Iran and the

shipment was confiscated.

Your customer will receive 2 years in prison, and had you known the parts were for military application your company and you would have been prosecuted a well.  

I asked the Customs officer how could I know who my customer is selling to.

He said the answer is simple, if you sell military related items, you must know who the end used is.

After that episode you can be sure we know who the end user is.

But it’s not always that easy.         

Export agents that do not want their customers to learn who their supplier is, will request that you not put your name on the shipment, they want to provide you with  shipping labels.

This will not work when exporting military parts, but that does not stop people from breaking the law all the time. People always try to ship to blacklisted countries and many are caught.  

And that’s what this short story is all about.   

We had a friend  named Harry, and Harry had a wholesale parts supply business in Ohio.

Harry was contacted by an export agent requesting a fairly large quantity of turbochargers, that had a military application.

As Harry’s company was a distributor for  Schweitzer turbocharger, the agent went to Harry and gave him an order.

Harry knew the parts had a military application, but he chose to disregard it. All he wanted was the profit on the sale and that’s all Harry cared about.

Harry then packed the shipment for export.

While packing it, Harry did exactly what any honest and legitimate company does not do.

Harry put his catalogs, calendars and his business cards into the packages before he sealed them up.

Harry hoped that the end user customer would see his advertisements and come to him directly next time bypassing the agent, and that was not a very nice thing to do.

What Harry didn’t know was that his customer was a bigger crook than he was, and he intended to ship the turbochargers to Iran, a country that’s on the U.S. Government’s “No ship” blacklist.   

Harry’s customer was on the Department of State Watch list, and the entire turbocharger shipment was confiscated.

Not only was Harry’s customer prosecuted, but Harry was prosecuted too.

It was hard for Harry to convince U.S. Customs he did nothing wrong, as they found his catalogs, calendars and business cards in the shipment.

Before it was all over, Harry told me that between his attorney bills and fines he spent $380,00.00.

Harry  was never paid for the turbo chargers and he almost lost his building.

After that, I don’t think Harry sold any more Military parts or put his advertisements in any of his shipments.