Feds knock; a business is lost
HUNTSVILLE, Ala. -- As Alex Latifi walks through his empty factory, the only sounds are his footsteps and the dull hum of the wavering fluorescent light overhead. The lathes and drill presses that once churned out a steady stream of critical parts for the U.S. military are still.
The ghostly silence at Axion is the result of a four-year government probe that targeted Latifi for allegedly violating U.S. export law by sending to China classified drawings of an Army Black Hawk helicopter part and falsifying related tests.
Armed federal agents raided Latifi's home and business in 2004 and 2006, seizing computers, cellphones and cardboard boxes full of records. Prosecutors froze $2.5 million of his assets in 2006, dealing what may prove a fatal blow to his 24-year-old business. Finally, in March 2007, U.S. Attorney Alice Martin unveiled a multiple-count criminal indictment in Birmingham, Ala., placing the Iranian-American immigrant at the intersection of two of the country's most emotionally charged national security worries: Iran and China.
"Keeping sensitive U.S. military technology from falling into the wrong hands is a top priority for the Justice Department," Kenneth Wainstein, assistant attorney general for national security, said at the time. "This indictment and other recent illegal export prosecutions should serve as a warning to companies seeking to enhance their profits at the expense of America's national security."
But rather than deterring renegade exporters, the Latifi case now appears as a cautionary tale of what critics call an overzealous prosecution. It is also a reminder that the innocent can pay an enormous price while the gears of justice grind. "The government's case itself it seems to me was sloppily prepared. … Their prosecutorial zeal caused them to overlook some deficiencies in their case," says Clif Burns, an export law attorney at Powell Goldstein in Washington, D.C., who was not involved in the case.
During a seven-day trial last fall, the government's case swiftly unraveled. The informant who tipped Army investigators to Latifi's alleged misdeeds turned out to be an Axion employee who was simultaneously embezzling company funds. Prosecutors also conceded that the government had failed to mark the sensitive technical drawing that Latifi, 60, was accused of illegally exporting with the warning language Defense Department regulations require.
In her Florence, Ala., courtroom, U.S. District Court Judge Inge Johnson called the government's case "sloppy" before swiftly dismissing all charges. The judge also ordered the government to pay Latifi nearly $364,000 for his attorney's fees, a move the local U.S. attorney called "unprecedented."
For the government, the defeat was a rare loss in the export-control arena. For Latifi, the ordeal — he faced up to 40 years in prison if convicted on all counts — struck at the ideals that defined his life as an engineer and as an immigrant. "I paid with four or five years of my life. I lost my company. … This is like the Gestapo. This is not the United States," Latifi said in a joint interview with his wife, Beth, in which they recounted their experiences with federal law enforcement officials.
The drama may not be over. Latifi's attorneys have filed a formal complaint with the Justice Department's office of professional responsibility (OPR) accusing Martin and her deputies, David Estes and Angela Debro, of "prosecutorial misconduct" for allegedly stating in conversations with the defense attorneys that their goal was to put Latifi out of business whether or not they won the case. Latifi is seeking access to the government's case files, which his attorneys say will prove that prosecutors failed to disclose evidence suggesting his innocence.
Martin's 6½-year tenure already has been marked by high-profile trials and controversy. The Republican appointee's handling of prosecutions of former Alabama governor Don Siegelman, a Democrat, and HealthSouth CEO Richard Scrushy has been criticized as politically motivated, most recently in an April 17 report by the Democratic staff of the House Judiciary Committee.
Mark White, incoming president of the state bar association, says the Alabama legal community is concerned with "the attitudes and positions taken by the U.S. attorney's office. … They are seen as being political."
A ruling on Latifi's attempt to see prosecutors' records may be months away, but Johnson already has indicated deep concern about the government's conduct. "Evidence was received during the defendant's trial that at least raises the possibility that the government continued to investigate and prosecute (Latifi) even after uncovering evidence demonstrating that the defendants were not guilty of the alleged crimes," the judge wrote.
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