Three Men Arrested in Scheme to Export Nulear Material to IraqBy John J. Goldman and William C. Rempel
Los Angeles Times
Federal authorities arrested a former bank president and two companions Thursday on charges of attempting to illegally export nuclear-related materials to Iraq.
The investigation, in which U.S. Customs agents posed as arms merchants for Saddam Hussein, also resulted in the seizure here of five tons of zirconium, the largest confiscation of such materials in U.S. history.
U.S. law and U.N. resolutions prohibit all trade with Iraq except for humanitarian items and forbid any nuclear weapons development. Zirconium is critical to the operation of nuclear reactors.
All of the materials, Customs agents said, originated in the Ukraine and may have been shipped with the backing of renegade former Soviet military officers or Russian organized crime.
"In the wake of the breakup of the Soviet Union, there have been concerns that nuclear weapon components produced there might fall into the hands of terrorists or rogue nations," said James Kallstrom, assistant director in charge of the FBI's New York field office.
"The potential result of their obtaining such material could only be described as catastrophic," Kallstrom said. "The possibility of the sale and diversion of nuclear material is too real."
The arrests resulted from an elaborate sting which lasted more than a year and even featured a U.S. agent posing as an Iraqi defense minister.
Indicted on charges of illegally attempting to export zirconium in violation of U.S. trade sanctions against Iraq was Demetrios Demetrios, 40, the owner of Interglobal Manufacturing Enterprises with offices in Greece, Moscow and New York, and two companions, Renos Kourtides, 55, and Constantin Zahariadis, 50.
Kourtides is a former president of the Marathon National Bank in New York City. Zahariadis, a Greek citizen, is in the export-import business, federal officials said.
The defendants allegedly also raised the possibility of selling plutonium or enriched uranium from the former Soviet Union. But they stressed purchases of these sensitive items would have to await completion of the zirconium transactions, authorities said.