N.Y. Man Charged With Illegal Export Of Military Parts -- Equipment Headed For China In Shipment Of Scrap

UNIONDALE, N.Y. - A New York businessman was arrested yesterday by federal agents on charges of attempting to illegally export to China sophisticated military equipment, including state-of-the-art navigational gyroscopes for the F-117 Stealth bomber that were hidden in a shipment of scrap metal, officials said.

The F-117 navigational equipment was inadvertently sold by the Pentagon to George Cheng, 48, of Greenlawn two years ago instead of being junked, said Charles Gorder, an assistant U.S. attorney in Portland.

Cheng was arrested by U.S. Customs agents on Long Island yesterday and charged with exporting without a federal license one complete and two partial navigational systems for the F-117, 35 components for the navigational system of the F-111 fighter/bomber, tubes for the Navy's electronic-warfare jamming devices and hundreds of spare parts for M-16 and M-41 combat tanks, said Andre Flores, head of the U.S. Customs Service on Long Island.

The sale of any F-117 equipment outside of the United States is prohibited, as is the sale of all military equipment to China, said Assistant U.S. Attorney James Tatum Jr.

The export of the other equipment requires a license from the State Department, Tatum said.

This is not the first time Cheng has been involved with federal authorities.

On two previous occasions in the past three years, he had been warned not to export military goods to Taiwan without proper licenses, officials said. And Cheng figured in a U.S. Senate hearing this summer into the lax controls by the Pentagon in the disposal of surplus military supplies.

Testimony at the hearing conducted by U.S. Sen. Charles Grassley, R-Iowa, indicated that the Pentagon had inadvertently sold Cheng $21 million of F-117 parts that should have been scrapped.

"It was obviously a mistake for the Defense Department to sell Cheng the parts," Gorder said in a telephone interview yesterday.

A spokesman for the Pentagon Defense Reutilization and Marketing Service said that the person familiar with the Cheng case was not available yesterday to comment.

Cheng, a native of Taiwan, operates Telecomp Recycling Materials

out of his Long Island home. The company, he says, specializes in selling scrap metal.

In March, Customs agents in Portland found the F-117 and other military parts concealed within crates filled with scrap metal and being shipped through Portland to Shanghai Daying Metal in Shanghai.

Although China might have use for the sophisticated jet and electronic-warfare parts, the tank parts would most likely be used by countries such as Iran that have the older tanks.

The United States bars the export of such tank parts to Iran, but China trades with Iran, federal officials said. At a hearing yesterday at the federal courthouse in Uniondale, Magistrate Viktor Pohorelsky released Cheng on $500,000 bail, pending his surrender for arraignment later this month at the federal court in Portland.

Cheng's attorney, federal public defender Randi Chavis, declined to comment. If convicted, Cheng faces up to 50 months in prison.