By Jim Jordan, The Lexington Herald-Leader (Lexington, Ken.)
Galls Inc. tried to ship handcuffs, helmets, listening devices and other law-enforcement equipment to foreign countries without getting the required licenses, a federal agent alleges in an affidavit released yesterday.
The 16-page document was used to obtain a search warrant from U.S. Magistrate Judge James B. Todd that led to the Wednesday raid on Galls' two Lexington locations, generating wide media coverage.
The affidavit by Department of Commerce Special Agent Steven D. Fisher does not claim that Galls shipped goods to Iran or any other embargoed country.
It alleges that, in addition to improperly licensed shipments, Galls allowed a man on the federal Denied Persons List to place three orders in 2003 that went to Macedonia and that the Lexington company tried to ship an order to Jordan in October that was actually destined for Iraq.
In response, Aramark Corp., the New York Stock Exchange company that owns Galls, assured its customers that Galls was back "in full operation fulfilling and shipping customer orders" after the raid.
"We are continuing to cooperate with the investigation," the company said. "We are reviewing our current policies and procedures to ensure compliance with all relevant export laws."
Aramark spokeswoman Kristine Grow said the company had no further comment yesterday.
Neither Galls nor any of its executives have been charged in connection with the allegations. Prosecutors will review evidence, including information from the raid, to determine whether charges should be filed.
Galls is a leading supplier of uniforms and equipment for police, paramedics and military personnel, who can order by mail or the Internet or buy at Galls stores in Lexington and California.
On Wednesday, state police and agents from at least three federal agencies seized about 100 documents, recording tapes and computer hard drives relating to Galls' foreign sales during a raid at the company's headquarters and store on Palumbo Drive and its shipping center and warehouse on Russell Cave Road.
A list of the seized items also was filed with U.S. District Court in Lexington yesterday.
Galls' four California stores, which employ 200 of its 800 employees, were not raided.
In his affidavit, Fisher said Galls was "knowingly and intentionally" violating federal export licensing laws.
"Galls has systematically exported crime-control commodities to various destinations around the world by falsely claiming on export documents" that the shipments were licensed, Fisher wrote. "The company lists the same, invalid license number when, in fact, no real license exists."
The number was obtained by Galls in 2001 to ship 50 handcuffs to Denmark, he said, but Galls used the license number "on 1,199 separate occasions" to ship "controlled products" to foreign countries.
In 2002, for example, Fisher said, Galls applied to ship a Tactical Ear listening device to Azerbaijan and "public safety equipment" to Zambia under the Denmark license number.
The affidavit said Galls shipped three orders to Macedonia between March and October 2003 that had been placed by Yuri Montgomery, who had been put on the Denied Persons List by a court in 2000. U.S. companies are not supposed to sell restricted items to those on the list.
"Montgomery, who lives in the U.S., made these purchases on his personal Visa card," Fisher wrote. Montgomery could not be reached for comment by the Herald-Leader yesterday.
In October, Fisher said, Galls applied to the Department of Commerce for a license to export unidentified items to Iraq. The company was told it needed another type of license issued by the Treasury Department.
Then in November, Fisher said, Galls applied to the Commerce Department for a license to export unidentified items to Jordan, but investigators determined "that the equipment listed on the license to Jordan was in fact destined for Iraq."
Other examples of possible violations cited in the affidavit included:
• An unlicensed shipment of 200 handcuffs to Jordan that was halted May 12 at a New York airport.
• An unlicensed shipment to Japan of "assorted law enforcement products including several pairs of handcuffs" that was stopped at the Cincinnati airport on April 15.
• A shipper's export declaration filed on Aug. 13 to send 72 helmets to Kuwait for which Galls had no export license.
Galls 'fully aware' of rules
Fisher said that federal customs and commerce officials met with Galls executives in September to make sure the company understood export regulations. The executives declared that they were "fully aware' of the requirements, he said.
"Galls has an extensive licensing history" with the Department of Commerce, "having applied for more than 120 licenses since 1997," Fisher said. More than half involved exports of handcuffs, which are restricted under federal crime-control laws.
Other sensitive items Galls has been approved to export include bulletproof vests, riot shields, fingerprinting equipment and night vision devices.
"As with handcuffs," Fisher said, "these commodities require export licenses for almost every destination in the world."