Kovacs, 64, was sentenced yesterday in the U.S. District Court for the District of Columbia before the Honorable Richard J. Leon. Kovacs pled guilty in May 2004 to conspiring to violate the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1705, and the Export Administration Regulations (“EAR”), 15 C.F.R. Parts 730-774, by exporting the hot press industrial furnace, which is used in manufacturing high strength metals.

According to the government’s proffer of evidence at the time of Kovacs’ plea, in March 1998, Kovacs was the owner and president of Elatec Technology Corporation (“Elatec”), a Massachusetts corporation. In March 1998, Elatec received an inquiry from the Beijing Research Institute of Material and Technology (“BIMI”), a research institute affiliated with the Chinese aerospace and missile programs. The inquiry was for a hot press industrial furnace called a “Pressvac.” In June 1998, BIMI and Elatec signed a contract for Elatec to sell BIMI a Pressvac furnace for $324,000.

In August 1998, Elatec submitted an application with the Department of Commerce, Bureau of Industry Security, for a license to export the Pressvac furnace to China. In March 1999, the Department of Commerce informed Elatec by letter that it would not be issuing a license for the export of the Pressvac furnace to China. The letter advised Elatec that “the proposed export could make a material contribution to the proliferation of missiles.”

After learning of the denial of the license, Kovacs and BIMI agreed to a plan whereby the furnace would be sold to a purportedly new customer in China, which in reality would still be BIMI. Kovacs told Elatec’s employees about the “new” customer. He also instructed them not to use BIMI’s name in connection with the sale, to complete all paperwork with the “new” customer’s name, and never to call the furnace a Pressvac. Instead, Kovacs told employees to refer to the product as a “Ceramvac with hot press options.”

In July 1999, Elatec exported the Presvac furnace to China. Paperwork associated with the export omitted the name of the end-user in China, labeled the furnace as a “Ceramvac,” and falsely classified it as “no license required.”

After the Department of Commerce and ICE began their investigation, Kovacs caused Elatec employees to create false documentation and instructed an Elatec employee to testify falsely before a grand jury that BIMI engineers who came to the United States to consummate the sale of the Pressvac were here for a presentation related to future sales.

As part of his plea agreement with the government, Kovacs cooperated with the investigation, which Judge Leon took into consideration in fashioning the sentence. In handing down the sentence of incarceration, Judge Leon stated that he was focusing on the seriousness of the offense and the need to deter future offenders.

In announcing today’s sentence, U.S. Attorney Taylor, Commerce Assistant Secretary Jackson, and ICE Special Agent in Charge Reid commended the investigative work of Department of Commerce Special Agents, in particular David Poole, and ICE Special Agent William Argue. They also praised former Assistant U.S. Attorney Wendy L. Wysong, who indicted the case and negotiated the plea agreement, and Assistant U.S. Attorney Jay I. Bratt, who handled the remainder of the case.