LOUISVILLE, Ky. — The United States Department of Justice said three people from Indiana and Kentucky were arrested for allegedly scheming to export technical data drawings to China and supplying the Department of Defense (DOD) with items from China that are prohibited.
According to court documents, Phil Pascoe, 60, Monica Pascoe, 45, of Floyd Knobs, Indiana, and Scott Tubbs, 59, of Georgetown, Kentucky are charged with wire fraud, smuggling goods and violations of the Arms Export Control Act.
A company called "Quadrant Magnetics" is also named in the documents.
The indictment alleges that between December 2018 and January 2020, the trio planned to send about 70 drawings related to U.S. military projects to a company in China without a U.S. license, which is in violation of the Arms Export Control Act and the International Traffic in Arms Regulations.
Court documents show Quadrant Magnetics imported rare earth magnets from a company in China that smelted and magnetized them and then sold them to two American companies.
The rare earth magnets from China were allegedly included in components sold to the DOD for use in defense assets.
Officials said if convicted, Phil and Tubbs face a maximum of 20 years in prison for each count of wire fraud and 10 years for smuggling goods from the United States.
All three co-defendants face up to five years for conspiracy to defraud the U.S., officials said.
Quadrant Magnetics released a statement after the indictment.
“The company is cooperating with the government regarding the recent indictment from the Western District of Kentucky. We will continue to do so, and we remain focused on our mission to serving as an important partner to our customers.”
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