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John Thompson

Elizabethton Bureau Chief
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Arms dealer sentenced to 46 months in prison

October 13th, 2011 10:46 pm by John Thompson

ELIZABETHTON — A Carter County man was sentenced on Thursday to 46 months in federal prison following his guilty plea on one count of exporting defense articles without a license.
Jerome Stuart Pendzich, 34, Hampton, appeared in U.S. District Court in Knoxville on Thursday, where Judge Thomas Phillips ordered the sentence after finding Pendzich guilty of violating the Arms Export Control Act and the International Traffic in Arms Regulations.
Pendzich was accused of exporting the ceramic plates used in military-style bulletproof vests. Export of military articles is prohibited under the Arms Export Control Act and the international regulations.
According to the plea agreement signed by the defendant, Pendzich was operating two Internet businesses from his residence at 209 Reece Hill Road, Hampton. He was also soliciting business on eBay with the username Bulletproofvest.
In Jan. 2009, agents with the federal Immigration and Customs Enforcement Agency in San Diego were conducting a query of individuals and companies advertising on eBay who were soliciting commodities listed and controlled under the United States Munitions List and who were willing to ship the items “world wide.”
The undercover agents contacted Pendzich by email and said Pendzich indicated his willingness to ship to the United Arab Emirates. Recorded phone calls were then made between the undercover agents and Pendzich.
In May 2009, the undercover agents made arrangements with Pendzich to have him ship small arms protective inserts (SAPI plates) to Bogota, Colombia. According to the plea agreement, Pendzich told the undercover agents that he had an export license which authorized him to send the SAPI plates directly to Bogota. He told the agents he would ship then from Tennessee by U.S. Postal Service priority mail.
On May 28, 2009, the undercover agents received information that Pendzich had mailed a package at the Hampton Post Office to Bogota. The agents received two SAPI plates.
On June 18, 2009, the agents received information Pendzich had mailed two packages at the Hampton Post Office. These packages contained eight SAPI plates. The plates were received on June 19.
The agents said Pendzich had falsely described the contents as “ceramic plates” and “gifts” on customs declarations.
The agents said Pendzich had previously been told by his supplier, Armor Express, that an export license was needed from the Department of State before he could export the plates.
Prior to sentencing on Thursday, Judge Phillips denied a motion by the defense to a sentence that was lesser than the normal guidelines. Pendzich cited two reasons. First he cited a stipulation from the government that the shipment of the plates “posed no risk to the security or foreign policy of the United States.” The second reason was that he had to provide care for his mother, whose health was declining.
Prosecutor Jeffery E. Theodore countered that the items being shipped were defense articles listed in the U.S. Munitions List and “such conduct was fraught with potential for harm to the security of the United States. Moreover, the defendant attempted to ship the defense articles to Bogota, Colombia. There are paramilitary organizations such as Fuerzas Armadas Revolucionaras de Colombia (FARC) located in Colombia. FARC is the most significant drug trafficking organization in Colombia ... although not intended by the defendant, had he been successful, the bulletproof vests and body armor he attempted to export could possibly have ended up in the hands of narco-terrorists.”
On the second point, Theodore said the family circumstances did not warrant a lesser sentence and there were other family members who could provide care for Pendzich’s mother while he was incarcerated.
Agents from Homeland Security investigated the case.

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