Under Secretary for Industry and Security; In the Matter of: Wayne LaFleur, Respondent, 5916-5921 [E9-654]

Agencies

• DEPARTMENT OF COMMERCE

[Federal Register Volume 74, Number 21 (Tuesday, February 3, 2009)]
[Notices]
[Pages 5916-5921]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-654]


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DEPARTMENT OF COMMERCE

[Docket No. 07-BIS-0028]


Under Secretary for Industry and Security; In the Matter of: 
Wayne LaFleur, Respondent

Final Decision and Order

    This matter is before me upon a Recommended Decision and Order 
(``RDO'') of an Administrative Law Judge (``ALJ''), as further 
described below.
    In a charging letter filed on December 18, 2007, the Bureau of 
Industry and Security (``BIS'') alleged that Respondent Wayne LaFleur 
committed one violation of the Export Administration Regulations 
(currently codified at 15 CFR Parts 730-774 (2008) (``Regulations'')), 
issued pursuant to the Export Administration Act of 1979, as amended 
(50 U.S.C. app. sections 2401-2420 (2000)) (the ``Act''),\1\ when he 
exported a vessel to Cuba during a regatta without the license required 
by the Regulations. Specifically, the charge against Respondent Wayne 
LaFleur is as follows:
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    \1\ From August 21, 1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which had been extended by successive Presidential Notices, 
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)), 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. sections 1701-1707) 
(``IEEPA''). On November 13, 2000, the Act was reauthorized and 
remained in effect through August 20, 2001. Since August 21, 2001, 
the Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has 
been extended by successive Presidential Notices, the most recent 
being that of July 23, 2008 (73 FR 43603, July 25, 2008), has 
continued the Regulations in effect under IEEPA.
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Charge 1 15 CFR 764.2(a)--Exporting a Vessel Without the Required 
License

    Between on or about May 22, 2003 through on or about May 31, 2003, 
[LaFleur] engaged in conduct prohibited by the Regulations when he 
exported the vessel
    EKA, an item subject to the Regulations and classified on the 
Commerce Control List under Export Control Classification Number 
(``ECCN'') 8A992.f, to Cuba during a regatta without the required 
Department of Commerce authorization. On more than one occasion prior 
to the regatta, BIS's Office of Export Enforcement had advised race 
organizers that all regatta participants required a Department of 
Commerce export license prior to exporting their vessel to Cuba. On or 
about May 22, 2003, the Office of Export Enforcement met with [LaFleur] 
and other regatta participants at the regatta's pre-launch party and 
informed [LaFleur] that a license was required for the temporary export 
of vessels to Cuba during the regatta. On or about May 23, 2003, the 
Office of Export Enforcement provided [LaFleur] with a written letter 
indicating again that an export license was required by all regatta 
participants who took their vessels to Cuba and that a particular 
license that had been identified by some participants as authority to 
take their vessel to Cuba during the regatta did not in fact authorize 
the temporary export of a vessel. Pursuant to Section 746.2 of the 
Regulations, a license is required for the export of vessels to Cuba 
and no license was obtained for the export of the EKA to Cuba. In 
temporarily exporting a vessel to Cuba without the required license, 
[LaFleur] committed one violation of Section 764.2(a) of the 
Regulations.
    December 18, 2007 Charging Letter against Wayne LaFleur, at 1-2 
(Exhibit Q to BIS's Motion for Decision).\2\
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    \2\ In the charging letter, LaFleur's name was inadvertently 
misspelled as ``Lefleur'', which BIS sought to correct in its Motion 
for Decision. I agree with the conclusion in the RDO that this 
spelling change was not substantive and in no way prejudiced 
LaFleur, who clearly understood that the charging letter was 
addressed to him. RDO, at 3, fn. 4.
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    On October 31, 2008, BIS filed a motion for decision on the record 
against Respondent LaFleur as to the above charge. Based on the record 
before him, the ALJ determined that reliable and substantial evidence 
demonstrated clearly, under the applicable preponderance standard, that 
the facts described in the charging letter more probably than not 
occurred as alleged by BIS. RDO, at 7.\3\ The ALJ found that LaFleur 
committed one violation of Section 764.2(a) of the Regulations when he 
exported to Cuba the vessel EKA, an item subject to the Regulations and 
classified under ECCN 8A992.f, without the export license required by 
the Regulations. Id. The ALJ also recommended, following consideration 
of the record, that LaFleur be assessed a monetary penalty of $8,000.00 
and a denial of export privileges for three years. RDO, at 10-11. The 
ALJ further recommended that the denial of export privileges be

[[Page 5917]]

suspended for the entire three-year period provided that LaFleur pays 
the monetary penalty within 30 days of the Final Decision and Order and 
that LaFleur commits no further violations during the period of 
suspension. Id. In his RDO, the ALJ indicated that, should LaFleur fail 
to abide by any of the conditions of suspension, then the denial order 
will become active with regard to LaFleur. Id.
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    \3\ The certified record, including the original copy of the RDO 
dated December 8, 2008, was received in my office on December 11, 
2008.
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    The RDO, together with the entire record in this case, has been 
referred to me for final action under Section 766.22 of the 
Regulations. I find that the record supports the ALJ's findings of fact 
and conclusions of law, including that Section 764.2(a) of the 
Regulations, like most of the violation provisions in Section 764.2, is 
a strict liability offense, and that the movement of a vessel from the 
United States to Cuba, even if only temporary, is considered an export 
to Cuba under the Regulations. RDO, at 4-5, 10. I also agree with the 
ALJ that when BIS decides to seek, or declines to seek, charges in an 
administrative or civil enforcement action, BIS is entitled to the 
discretion that a criminal prosecutor is afforded in determining 
whether or which charges to bring or not to bring. Such decisions are 
committed to the agency's prosecutorial discretion and unsuitable for 
review by an ALJ. RDO, at 8-10 (citing cases).
    Moreover, LaFleur's assertion that he ``applied for and obtained 
from the United States Coast Guard permission to leave the security 
zone with stated destination being Varadero[,] Cuba,'' (LaFleur's 
Response to Interrogatory No. 7; see also Answer of LaFleur dated 
January 17, 2008), neither was substantiated by the record nor is a 
defense under the Regulations. It is well established that approval of 
an action by one agency does not alleviate the need of a person to 
comply with another agency's regulatory requirements', even if such 
agency responsibilities might overlap. Nor is there any inconsistency 
in requiring the person subject to different regulation to meet all 
such requirements. As the DC Circuit has observed:

    [W]e expect persons in a complex regulatory state to conform 
their behavior to the dictates of many laws, each serving its own 
special purpose. In cases of this type, an administrative agency 
need not make any ``accommodation'' to the constraints that other 
laws place upon the regulated person.

    N.Y. Shipping Ass'n., Inc. v. Federal Maritime Commission, 854 F.2d 
1338, 1367 (DC Cir. 1988) (finding there was no ``conflict'' requiring 
compliance with federal shipping laws even though activities which 
might be sanctioned under federal labor laws violate federal shipping 
laws). That for another purpose the U.S. Coast Guard might have given 
its approval for LaFleur to leave the ``security zone'' of the United 
States did not relieve him of his legal obligation to obtain the 
required export license under the Regulations before taking his vessel 
to Cuba.
    I also find that the imposition of a civil monetary penalty and 
suspension of export privileges for three years is appropriate based 
upon a review of the entire record, given the nature of the violations, 
the facts of this case, and the importance of deterring future 
unauthorized exports.\4\ Albeit LaFleur may have received warning from 
the BIS agents shortly before the beginning of the regatta, these 
warnings were clear and unequivocal in informing him of the need to 
secure the requisite authorization under the Regulations before 
exporting the vessel to Cuba, even on a temporary basis. LaFleur 
ignored these warnings at his peril.
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    \4\ The sanction recommended by the ALJ also is consistent with 
the sanction proposed by BIS.
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    Based on my review of the entire record, I affirm the findings of 
fact and conclusions of law in the RDO.
    Accordingly, it is therefore ordered,
    First, that a civil penalty of $8,000.00 is assessed against Wayne 
LaFleur, which shall be paid to the U.S. Department of Commerce within 
(30) thirty days from the date of entry of this Order.
    Second, pursuant to the Debt Collection Act of 1982, as amended (31 
U.S.C. 3701-3720E (2000)), the civil penalty owed under this Order 
accrues interest as more fully described in the attached Notice, and, 
if payment is not made by the due date specified herein, LaFleur will 
be assessed, in addition to the full amount of the civil penalty and 
interest, a penalty charge and administrative charge.
    Third, for a period of three (3) years from the date that this 
Order is published in the Federal Register, Wayne LaFleur, 339 Torrey 
Pines Point, Naples, FL 34113, and his successors or assigns, and when 
acting for or on behalf of LaFleur, his representatives, agents, or 
employees (hereinafter collectively known as the ``Denied Person'') may 
not participate, directly or indirectly, in any way in any transaction 
involving any commodity, software or technology (hereinafter 
collectively referred to as ``item'') exported or to be exported from 
the United States that is subject to the Regulations, or in any other 
activity subject to the Regulations, including, but not limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the Regulations, or in any other 
activity subject to the Regulations; or
    C. Benefiting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the Regulations, or in any other activity subject to the Regulations.
    Fourth, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Denied Person of the ownership, possession, or 
control of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby the Denied Person acquires 
or attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the Denied Person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and which is owned, possessed or controlled by the Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the Denied Person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Fifth, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the Denied Person by affiliation, 
ownership,

[[Page 5918]]

control, or position of responsibility in the conduct of trade or 
related services may also be made subject to the provisions of the 
Order.
    Sixth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the Regulations where the only items 
involved that are subject to the Regulations are the foreign-produced 
direct product of U.S.-origin technology.
    Seventh, that, as authorized by Section 766.17(c) of the 
Regulations, the denial period set forth above shall be suspended in 
its entirety, and shall thereafter be waived, provided that: (1) Within 
thirty days of the effective date of the Decision and Order, LaFleur 
pays the monetary penalty imposed against him of $8,000.00 in full, and 
(2) for a period three years from the effective date of the Decision 
and Order, LaFleur commits no further violations of the Act or 
Regulations.
    Eighth, that the final Decision and Order shall be served on 
LaFleur and shall be published in the Federal Register. In addition, 
the ALT's Recommended Decision and Order, except for the section 
related to the Recommended Order, shall also be published in the 
Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective upon publication in the Federal Register.

    Dated: January 7, 2009.
Daniel O. Hill,
Deputy Under Secretary of Commerce for Industry and Security.
United States Department of Commerce
Bureau of Industry and Security
Washington, DC 20230

    In the Matter of: Wayne LaFleur, Respondent. [Docket No.: 07-
BIS-0028]

Recommended Decision and Order \1\

    Issued: December 8, 2008.
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    \1\ For proceedings involving violations not relating to Part 
760 of the Export Enforcement Regulations, 15 CFR 766.17(b) and 
(b)(2) prescribe that the Administrative Law Judge's decision be a 
``Recommended Decision and Order.'' The violations alleged in this 
case are found in Part 764. Therefore, this is a ``Recommended'' 
decision. That section also prescribes that the Administrative Law 
Judge make recommended findings of fact and conclusions of law that 
the Under Secretary for Export Administration, Bureau of Industry 
and Security, U.S. Department of Commerce, must affirm, modify or 
vacate. 15 CFR 766.22. The Under Secretary's action is the final 
decision for the U.S. Commerce Department. 15 CFR 766.22(e).
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    Issued by: Hon. Waiter J. Brudzinski, Administrative Law Judge.

Preliminary Statement

    This Recommended Decision and Order is issued in response to the 
October 31, 2008 Motion for Decision on the Record as to the charge 
filed against Respondent Wayne LaFleur (``LaFleur'' or 
``Respondent'') submitted by the Bureau of Industry and Security, 
United States Department of Commerce (``BIS'' or ``Agency''). In 
accordance with the undersigned's Scheduling Order of May 7, 2008, 
Respondent had until December 1, 2008 to respond to BIS's motion. 
Since that time has passed with no response, this matter is now ripe 
for decision.
    On April 1, 2008, the undersigned consolidated the following BIS 
cases: (1) In the Matter of Peter Goldsmith, Docket: 07-BIS-0026; 
(2) In the Matter of Michele Geslin, Docket: 07-BIS 0027; and (3) In 
the Matter of Wayne LaFleur, Docket: 07-BIS-0028. However, this 
Recommended Decision and Order pertains only to Respondent LaFleur. 
On September 8, 2008, BIS moved for a summary decision against 
Geslin and Goldsmith on the charge that each had aided and abetted a 
violation of the Regulations through their organization of and 
participation in the regatta. On October 15, 2008, the undersigned 
issued a Recommended Decision and Order granting BIS's Motion for 
Summary Decision. Accordingly, the matters involving Geslin and 
Goldsmith have been excluded from the case caption.
    On December 18, 2007, BIS issued a charging letter initiating 
administrative enforcement proceedings against LaFleur. The charging 
letter alleged that LaFleur committed one violation of the Export 
Administration Regulations (currently codified at 15 CFR parts 73 0-
774 (2008)) (the ``Regulations''),\2\ issued under the Export 
Administration Act of 1979, as amended (50 U.S.C. App. sections 
2401-2420 (2000)) (the ``Act'').\3\
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    \2\ The charged violation occurred in 2003. The Regulations 
governing the violation at issue are found in the 2003 version of 
the Code of Federal Regulations (15 CFR parts 730-774 (2003)). The 
2008 Regulations establish the procedures that apply to this matter.
    \3\ Since August 21, 2001, the Act has been in lapse and the 
President, through Executive Order 13222 of August 17, 2001 (3 CFR, 
2001 Comp. 783 (2002)), as extended most recently by the Notice of 
July 23, 2008 (73 FR 43,603 (July 25, 2008)), has continued the 
Regulations in effect under the International Emergency Economic 
Powers Act (50 U.5.C 1701-1706 (2000)).
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    Specifically, the charging letter alleged that, between on or 
about May 22, 2003 through on or about May 31, 2003, LaFleur engaged 
in prohibited conduct by exporting a vessel to Cuba in violation of 
the Regulations. The charge read as follows:

Charge 1 15 CFR 764.2(a)--Exporting a Vessel without the Required 
License

    Between on or about May 22, 2003 through on or about May 31, 
2003, [LaFleur] engaged in conduct prohibited by the Regulations 
when he exported the vessel EKA, an item subject to the Regulations 
and classified on the Commerce Control List under Export Control 
Classification Number (``ECCN'') 8A992.f, to Cuba during a regatta 
without the required Department of Commerce authorization. On more 
than one occasion prior to the regatta, BIS's Office of Export 
Enforcement had advised race organizers that all regatta 
participants required a Department of Commerce export license prior 
to exporting their vessel to Cuba. On or about May 22, 2003, the 
Office of Export Enforcement met with [LaFleur] and other regatta 
participants at the regatta's pre-launch party and informed 
[LaFleur] that a license was required for the temporary export of 
vessels to Cuba during the regatta. On or about May 23, 2003, the 
Office of Export Enforcement provided [LaFleur] with a written 
letter indicating again that an export license was required by all 
regatta participants who took their vessels to Cuba and that a 
particular license that had been identified by some participants as 
authority to take their vessel to Cuba during the regatta did not in 
fact authorize the temporary export of a vessel. Pursuant to Section 
746.2 of the Regulations, a license is required for the export of 
vessels to Cuba and no license was obtained for the export of the 
EKA to Cuba. In temporarily exporting a vessel to Cuba without the 
required license, [LaFleur] committed one violation of Section 
764.2(a) of the Regulations.
    Ex. Q (Charging Letter against LaFleur).\4\
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    \4\ In the charging letter, LaFleur's name was inadvertently 
misspelled as ``Lefleur'', as discussed in BIS's Motion for 
Decision. This spelling correction is not substantive and in no way 
prejudices LaFleur, who clearly understood that the charging letter 
was addressed to him, as evidenced by his participation in this 
matter. This Court has previously found that BIS may amend 
typographical errors, especially when no prejudice to the Respondent 
would result from such amendment. See International Freight 
Forwarders, 73 FR at 25649 fn. 4, aff'd, 73 FR at 25648.
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    On October 31, 2008, BIS moved for decision on the record as to 
the charge against LaFleur, on the basis that the preponderance of 
evidence, including admissions from LaFleur, demonstrated clearly 
that LaFleur committed the violation of Sec.  764.2(a), as alleged. 
Section 764.2(a) provides as follows:
    (a) Engaging in prohibited conduct. No person may engage in any 
conduct prohibited by or contrary to, or refrain from engaging in 
any conduct required by, the EAA, the EAR, or any order, license or 
authorization issued thereunder.
    15 CFR 764.2(a) (2003, 2008). Section 764.2(a) thus makes it 
unlawful, inter alia, for a person to engage in conduct prohibited 
by or contrary to the Regulations, such as engaging in the 
unlicensed export of an item when a license was required for such 
export under the Regulations. Id.
    As with most of the Section 764.2 violation provisions, Section 
764.2(a) of the Regulations is a strict liability offense. See 15 
CFR 764.2; Iran Air v. Kugelman, 996 F.2d 1253, 1258-9 (D.C. Cir. 
1993) (upholding the Department of Commerce's reading of the 
Regulations as allowing for strict liability charges); In the Matter 
of Kabba & Amir Investments, Inc., d.b.a. International Freight 
Forwarders (``International Freight Forwarders''), 73 FR 25649, 
25652 (May 7, 2008) (concluding that Section 764.2(b) is a strict 
liability offense), aff'd by Under Secretary, 73 FR 25648; see also 
In the Matter of Petrom GmbH International Trade, 70 FR 32743, 32754 
(June 6, 2005).\5\
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    \5\ Section 764.2(b) states a violation for causing, aiding or 
abetting ``the doing of any act prohibited * * * by the 
Regulations,'' and thus, inter alia, sets forth a violation for 
causing, aiding or abetting conduct that would constitute a 
violation of Section 764.2(a). Compare 15 CFR 764.2(a) and (b). 
Moreover, where the Regulations include a knowledge or intent 
requirement, such a requirement is explicitly set forth in Section 
764.2. See e.g., 15 CFR 764.2(e) (Acting with knowledge of a 
violation). The Regulations and their history also make clear that a 
knowledge or intent requirement will be included specifically in the 
pertinent violation provision when such a requirement is intended. 
See 45 FR 84022 (Dec. 22, 1980) (removing knowledge requirement from 
several violation provisions in the Regulations).

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[[Page 5919]]

    Under the Regulations, the movement of a vessel from the United 
States to Cuba is considered an export, even if the vessel remains 
in Cuba only temporarily. See 15 CFR 734.2(b) (2003, 2008) (defining 
``export'' to include ``an actual shipment or transmission of items 
subject to the [Regulations] out of the United States * * *.''). \6\ 
The Regulations also provide that an exporter ``will need a license 
to export or reexport all items subject to the [Regulations] * * * 
to Cuba * * * '' except in circumstances, not applicable to the 
current situation, where a License Exception would authorize the 
export or reexport. 15 CFR 746.2(a) (2003, 2008)).
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    \6\ Temporary exports have been subject to export control laws 
for more than 60 years. See e.g., 7 FR 5007 (July 2, 1942) (amending 
Part 802 of title 32 of the Code of Federal Regulations to authorize 
the export of certain stores and spare parts that are carried abroad 
on vessels and planes for use or consumption by the crew); cf. 15 
CFR 740.1 5(b)(2008).
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    Pursuant to 5 U.S.C. 556(d), BIS bears the burden of proving the 
allegations in the charging letter under the traditional 
``preponderance of the evidence'' standard of proof typically 
applicable in administrative or civil litigation. In the Matter of 
Ihsan Medhat Elashi, 71 FR 38843, 38847 (July 10, 2006), aff'd, 71 
FR 38843-38844. See also Steadman v. S.E.C., 450 U.S. 91, 102 
(1981); Sea Island Broadcasting Corp. of S.C. v. F.C.C., 627 F.2d 
240, 243 (D.C. Cir. 1980). Thus, BIS must establish simply that it 
is more likely than not that the respondent committed the violation 
alleged in the charging letter. See Herman & Maclean v. Huddleston, 
459 U.S. 375, 390 (1983). BIS needs, in other words, to show ``that 
the evidence of a fact is more probable than its nonexistence.'' 
Concrete Pipe & Products v. Construction Laborers Pension Trust, 508 
U.S. 602, 622 (1993). To satisfy this burden, BIS may rely upon 
direct or circumstantial evidence. See, generally, Monsanto Co. v. 
Spray-Rite Serv. Corp., 465 U.S. 752, 764-765 (1984).
    Section 764.3 of the Regulations sets forth the sanctions BIS 
may seek for violations of the Regulations. The applicable sanctions 
are: (i) A monetary penalty, (ii) a denial of export privileges 
under the Regulations, and (iii) suspension from practice before the 
Bureau of Industry and Security. 15 CFR 764.3. Pursuant to the 
International Emergency Economic Powers Act (50 U.S.C. 1701-1706 
(2000)) (``IEEPA''), as amended, the maximum monetary penalty in 
this case is $250,000 per violation. International Emergency 
Economic Powers Enhancement Act of 2007, Public Law 110-96, 121 
Stat. 1011 (2007); see also International Freight Forwarders, 73 FR 
at 25653, aff'd at 73 FR 25648.
    BIS requests that I recommend to the Under Secretary of Commerce 
for Industry and Security \7\ that LaFleur (1) be assessed a civil 
penalty in the amount of $8,000 and (2) be made subject to a denial 
of export privileges to last for three years and remain suspended 
during that period provided that LaFleur pays the monetary fine 
against him within thirty days of the date of the Final Decision and 
Order, and does not commit any further violations of the Regulations 
during the three year period of the suspension. BIS seeks this 
sanction because the item exported in this case involved a vessel 
controlled for anti-terrorism reasons to a country that the United 
States Government has designated a state sponsor of international 
terrorism.\8\ In addition, LaFleur was advised numerous times by 
federal agents before the regatta in question began that taking a 
vessel to Cuba without the proper Department of Commerce (DOC) 
authorization was a violation of U.S. law.\9\
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    \7\ Pursuant to Section 13(c)(1) of the Export Administration 
Act and Sec.  766.17(b)(2) of the Regulations, in export control 
enforcement cases, the ALJ makes recommended findings of fact and 
conclusions of law that the Under Secretary must affirm, modify or 
vacate. The Under Secretary's action is the final decision for the 
U.S. Department of Commerce.
    \8\ See 15 CFR Part 766, Supp. No. 1, section III.A. (discussing 
the factors that BIS considers in the context of settling an 
enforcement action and stating that ``BIS is more likely to seek a 
greater monetary penalty and/or denial of export privileges * * * in 
cases involving: (1) Exports or reexports to countries subject to 
anti-terrorism controls * * * ''). Cuba has been designated as a 
Terrorist Supporting Country and is subject to such anti-terrorism 
controls. See 15 CFR Part 740, Supp. No. 1 Country Group E:1 (2003); 
15 CFR 742.1, 746.2 (2003).
    \9\ See 15 CFR Part 766, Supp. No. 1, section III.A. (discussing 
the factors that BIS considers in the context of settling an 
enforcement action and stating that ``[i]n cases involving gross 
negligence, willful blindness to the requirements of the EAR, or 
knowing or willful violations, BIS is more likely to seek a denial 
of export privileges * * * and/or a greater monetary penalty than 
BIS would otherwise typically seek'').
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    I find that decision on the record in favor of BIS is 
appropriate as to the charge filed against Respondent Wayne LaFleur 
because reliable and substantial evidence demonstrates clearly, 
under the preponderance standard, that the facts described in the 
charging letter more probably than not occurred as alleged. This 
decision has been made based on my review of the entire record 
before me.
    In LaFleur's January 17, 2008 answer to the charging letter, 
LaFleur failed to deny that he took the vessel EKA to Cuba without 
the proper DOC authorization, as alleged in the charging letter. Ex. 
M. More directly, in response to BIS's requests for admission and 
interrogatories, LaFleur admitted that he took the vessel EKA from 
Key West, Florida, to Cuba during the regatta and that he was owner 
of the vessel EKA during the regatta. Exs. J & N (at Requests & 
Admissions 19, 20, 21); Exs. I & O (at Interrogatories & Responses 
2, 10).
    LaFleur has admitted, and BIS has confirmed through a search of 
its licensing database, that no DOC license was obtained for the 
export of the vessel EKA to Cuba. Exs. L & P; see Exs. J & N (at 
Request & Admission 22) (when asked to admit that he did not apply 
for a license, LaFleur stated that he ``had no knowledge that a 
vessel was being exported,'' therefore failing to specifically deny 
the request and implicitly acknowledging that he did not, in fact, 
apply for a license for the export of his vessel).
    Although the provision of the Regulations that LaFleur violated 
was a strict liability offense, it is notable, for purposes of the 
penalty, that LaFleur also admitted to receiving numerous written 
warnings from BIS Special Agents prior to the regatta in question. 
LaFleur admits that he received a letter on May 22, 2003 explaining 
that vessels are ``exported'' to Cuba ``even if they merely visit a 
Cuban port,'' and that he received two letters on May 23, 2003, 
informing him that taking a vessel into Cuban territorial waters 
without the proper export license would be a violation of federal 
law. Exs. J & N (at Requests & Admissions 24, 25); see also Exs. B & 
C. In addition, LaFleur acknowledged, in response to BIS 
interrogatories, that he was cautioned by DOC officials on May 22, 
2003, the day before the regatta started, that a license issued to 
an organization called Conchord Cayo Hueso for the export of certain 
medical items to Cuba would not authorize members or asserted 
members of that organization to export vessels to Cuba. Exs. I & O 
(at Interrogatory & Response 4) (stating that at the pre-launch 
party on May 22, 2003, he was informed by DOC that the license in 
question ``may not be valid'').\10\ LaFleur further admits that this 
latter fact was confirmed to him by BIS Special Agents on the day of 
the regatta. Exs. J & N (at Request & Admission 25) (admitting 
receipt of warning on day of regatta); Ex. C.
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    \10\ BIS provided evidence in this matter that it had searched 
its electronic licensing database and determined conclusively that 
no license for the export of vessels to Cuba was applied for or 
issued to Conchord Cayo Hueso or its president during the applicable 
time period. Ex. P.
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    LaFleur has asserted that other captains involved in the regatta 
in question were not charged with violations of the Regulations. 
Even if true, this would not be relevant to the case at hand. 
Criminal prosecutors have broad discretion over whom to prosecute, a 
position that ``rests largely on the recognition that the decision 
to prosecute is particularly ill-suited to judicial review.'' Wayte 
v. U.S., 470 U.S. 598 at 607 (1985). ``Such factors as the strength 
of the case, the prosecution's general deterrence value, the 
government's enforcement priorities, and the case's relationship to 
the government's overall enforcement plan are not readily 
susceptible to the kind of analysis the courts are competent to 
undertake.'' Id. Similarly, ``when an agency decides to seek 
enforcement actions (or declines to seek enforcement actions), it is 
entitled to the same type of discretion that a prosecutor is 
afforded in bringing (or not bringing) criminal charges.'' Greer v. 
Chao, 492 F.3d 962 at 964 (8th Cir. 2007) (parentheticals in 
original). Indeed, the Supreme Court ``has

[[Page 5920]]

recognized on several occasions over many years that an agency's 
decision not to prosecute or enforce, whether through civil or 
criminal process, is a decision generally committed to an agency's 
absolute discretion.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985). 
Such agency decisions are unsuitable for judicial review because 
they involve ``a complicated balancing of a number of factors which 
are particularly within [the agency's] expertise,'' such as 
assessing where agency resources are best spent and whether a 
particular enforcement action fits the agency's overall policies. 
Id. at 837. ``The agency is far better equipped than the courts to 
deal with the many variables involved in the proper ordering of its 
priorities.'' Id.
    After admitting the material facts against him, and in light of 
the absence of any viable defense by LaFleur, it is clear that the 
preponderance of the evidence weighs in favor of BIS, and that BIS 
is entitled to decision in its favor with regard to the charge 
against LaFleur.

Recommended Findings of Fact and Conclusions of Law

    Based upon the record before me, I make following findings of 
fact and conclusions of law:

I. Findings of Fact

    1. The vessel EKA was classified under Export Control 
Classification Number 8A992.f on the Commerce Control List at the 
time of the alleged violations. Ex. K.
    2. The vessel EKA was exported to Cuba during the regatta 
described in the charging letter. Exs. J & N (at Request & Admission 
20).
    3. Prior to the regatta that began on May 23, 2003, Wayne 
LaFleur waswarned specifically at least twice by BIS that a 
Department of Commerce license was required to export a vessel to 
Cuba. Exs. J & N (at Requests & Admissions 24, 25).
    4. No Department of Commerce authorization was obtained for the 
export to Cuba of the vessel EKA. Exs. J & N (at Request & Admission 
22); Ex. L; Ex. P.
    5. Wayne LaFleur owned the vessel EKA during the regatta 
described in the charging letter and traveled upon the vessel EKA to 
Cuba during the regatta. Exs. J & N (at Requests & Admissions 19, 
21); Exs. I & 0 (at Interrogatory & Response 10).

II. Conclusions of Law

    1. The export of the vessel EKA to Cuba required an export 
license from the Department of Commerce. Ex. L.
    2. Section 764.2(a) of the Regulations is a strict liability 
provision.
    3. LaFleur engaged in conduct prohibited by the Regulations when 
he exported the vessel EKA to Cuba without the required Department 
of Commerce export license.
    Respondent's role in the export of a vessel from the United 
States to Cuba in this case demonstrates indifference to U.S. export 
control laws. Therefore, I find that BIS's penalty recommendation is 
entirely reasonable, especially given the repeated efforts made by 
BIS agents to specifically inform Respondent of the proper export 
licensing requirements.
    Accordingly, I recommend that the Under Secretary enter an Order 
imposing an $8,000 penalty against LaFleur and a denial of export 
privileges for three years. Further, I recommend the Order state 
that the denial of export privileges shall be suspended for the 
entire three year period, provided that LaFleur pays the monetary 
penalty within 30 days of the Final Decision and Order and that 
LaFleur commits no further violations during the period of the 
suspension. Should LaFleur fail to abide by any of the conditions of 
suspension, then the denial order will become active. This penalty 
is consistent with prior cases decided by this Court. See, e.g., 
International Freight Forwarders, 73 FR at 25652, aff'd at 73 FR 
25648 (imposing a monetary penalty of $6,000 and a conditional 
denial of export privileges for three years against a freight 
forwarder that aided and abetted an attempted export of medical 
equipment to Cuba).
    The terms of the denial of export privileges against Respondent 
should be consistent with the standard language used by BIS in such 
orders, with modifications as necessary to comply with the 
conditional nature of the denial of export privileges described 
above.
    Wherefore,

Recommended Order

[REDACTED SECTION]

    Accordingly, I am referring this Recommended Decision and Order 
to the Under Secretary of Commerce for Industry and Security for 
review and final action for the agency, without further notice to 
the Respondent, as provided in Section 766.7 of the Regulations.
    Within thirty (30) days after receipt of this Recommended 
Decision and Order, the Under Secretary will issue a written order 
affirming, modifying or vacating the Recommended Decision and Order. 
15 CFR 766.22(c). A copy of the Agency's regulations for Review by 
the Under Secretary is attached as Appendix B.

    Done and dated this 8th day of December, 2008 at New York, New 
York.

Hon. Walter J. Brudzinski,
Administrative Law Judge.

Appendix A--List of Exhibits

A. Agency's Exhibits

Exhibit A Letter to Michele Geslin dated April 24, 2003, with copy 
of certified mail receipt signed by Michele Geslin. (3 pages)
Exhibit B Letter to race participants from BIS Special Agent dated 
April 22, 2003. (1 page)
Exhibit C Letter to All Third Annual Conch Republic Cup Race 
Participants dated May 23, 2003; letter to race participants, dated 
May 23, 2003. (2 pages)
Exhibit D Letter to Peter Goldsmith dated April 10, 2003, with copy 
of certified mail receipt initialed by Peter Goldsmith. (3 pages)
Exhibit E Charging Letter addressed to Michele Geslin dated December 
18, 2007. (3 pages)
Exhibit F Charging Letter addressed to Peter Goldsmith dated 
December 18, 2007. (3 pages)
Exhibit G Michele Geslin's answer to Charging Letter dated February 
10, 2008. (1 page)
Exhibit H Peter Goldsmith's answer to Charging Letter dated February 
10, 2008. (1 page)
Exhibit I BIS's Interrogatories and Requests for Production of 
Documents, with certificate of service dated May 14, 2008. (14 
pages)
Exhibit J BIS's Requests for Admission to include Exhibits A through 
D, and certificate of service dated May 14, 2008. (15 pages)
Exhibit K Certified Licensing Determination dated September 4, 2008. 
(2 pages)
Exhibit L Certified copy of letter indicating results of BIS's 
search of its electronic licensing database for records of export 
licenses or applications related to the transactions in question. (2 
pages)
Exhibit M Wayne LaFleur's answer to Charging Letter, dated January 
17, 2008. (1 page)
Exhibit N Wayne LaFleur's response to BIS's Requests for Admission 
(see Ex. J for requests). (1 page)
Exhibit O Wayne LaFleur's response to BIS's Interrogatories and 
Requests for Production of Documents (see Ex. I for interrogatories 
and requests). (2 pages)
Exhibit P Certified copy of letter indicating results of BIS's 
search of its electronic licensing database for records of export 
licenses or applications related to the transaction in question. (2 
pages)
Exhibit Q Charging Letter addressed to Wayne LaFleur, dated December 
18, 2007. (5 pages)

B. Respondent's Exhibits

    Respondent did not file any exhibits.

Appendix B--Notice to the Parties Regarding Review by Under Secretary

Title 15--Commerce and Foreign Trade

Subtitle B--Regulations Relating to Commerce and Foreign Trade

Chapter VII--Bureau of Industry and Security, Department of 
Commerce

Subchapter C--Export Administration Regulations

Part 766--Administrative Enforcement Proceedings

15 CFR 766.22

Section 766.22 Review by Under Secretary

    (a) Recommended decision. For proceedings not involving 
violations relating to part 760 of the EAR, the administrative law 
judge shall immediately refer the recommended decision and order to 
the Under Secretary. Because of the time limits provided under the 
EAA for review by the Under Secretary, service of the recommended 
decision and order on the parties, all papers filed by the parties 
in response, and the final decision of the Under Secretary must be 
by personal delivery, facsimile, express mail or other overnight 
carrier. If the Under Secretary cannot act on a recommended decision 
and order for any reason, the Under Secretary will designate another 
Department of Commerce official to receive and act on the 
recommendation.
    (b) Submissions by parties. Parties shall have 12 days from the 
date of issuance of the

[[Page 5921]]

recommended decision and order in which to submit simultaneous 
responses. Parties thereafter shall have eight days from receipt of 
any response(s) in which to submit replies. Any response or reply 
must be received within the time specified by the Under Secretary.
    (c) Final decision. Within 30 days after receipt of the 
recommended decision and order, the Under Secretary shall issue a 
written order affirming, modifying or vacating the recommended 
decision and order of the administrative law judge. If he/she 
vacates the recommended decision and order, the Under Secretary may 
refer the case back to the administrative law judge for further 
proceedings. Because of the time limits, the Under Secretary's 
review will ordinarily be limited to the written record for 
decision, including the transcript of any hearing, and any 
submissions by the parties concerning the recommended decision.
    (d) Delivery. The final decision and implementing order shall be 
served on the parties and will be publicly available in accordance 
with Sec.  766.20 of this part.
    (e) Appeals. The charged party may appeal the Under Secretary's 
written order within 15 days to the United States Court of Appeals 
for the District of Columbia pursuant to 50 U.S.C. app. 2412(c)(3).

Certificate of Service

    I hereby certify that I have served the foregoing Recommended 
Decision and Order as indicated below to the following person(s):

Mario Mancuso, Under Secretary of Commerce for Industry and 
Security, U.S. Department of Commerce, Room H-3892, 14th Street & 
Constitution Avenue, NW., Washington, DC 20230. (By Facsimile to 
202-482-2387 and Federal Express.)
Charles G. Wall, Gregory Michelsen, Attorneys for Bureau of Industry 
and Security, Office of Chief Counsel for Industry and Security, 
U.S. Department of Commerce, Room 11-3 839, 14th Street & 
Constitution Avenue, NW., Washington, DC 20230. (By Facsimile to 
202-482-0085 and Federal Express.)
Wayne LaFleur, 339 Torrey Pines Point, Naples, FL 34113. (By Federal 
Express.)
Peter Goldsmith, 2627 Staples Avenue, Key West, FL 33040. (By 
Federal Express.)
Michele Geslin, 2627 Staples Avenue, Key West, FL 33040. (By Federal 
Express.)
Hearing Docket Clerk, ALJ Docketing Center, 40 S. Gay Street, Room 
412, Baltimore, Maryland 21202-4022. (By Facsimile to 410-962-1746 
and Federal Express.)

    Done and dated this 8th day of December 2008, New York, New 
York.

Regina V. Maye,
Paralegal Specialist to the Hon. Walter J. Brudzinski, 
Administrative Law Judge.

 [FR Doc. E9-654 Filed 2-2-09; 8:45 am]
BILLING CODE 3510-DT-M