California Firm Reaches Settlement Over U.S. Defense Export Control Violations

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By Samuel Rubenfeld

February 1, 2022

The U.S. State Department this week announced a settlement with Torrey Pines Logic Inc. and its sole owner, Leonid Volfson, over violations of U.S. defense-related export control laws.

Under the terms of a three-year consent agreement, Volfson and Torrey Pines Logic will pay a USD 840,000 civil penalty, with half of the amount suspended on the condition that the funds will be used to implement remedial compliance measures, according to the State Department. The company also agreed to hire a compliance officer to oversee implementation of the deal.

“The settlement demonstrates the Department’s role in strengthening U.S. industry by protecting U.S.-origin defense articles from unauthorized exports,” the State Department said. “The settlement also highlights the importance of obtaining appropriate authorization from the Department before exporting…controlled defense articles.”

Torrey Pines Logic, based in San Diego, California, exported thermal imaging units to several countries, including Lebanon, Russia and China, according to charging documents posted Monday by the Directorate of Defense Trade Controls (DDTC), a State Department office that enforces U.S. defense-related export restrictions. Torrey Pines Logic had exported various thermal imaging units without receiving authorization, even as its license applications were pending, records show.

The company also attempted to export thermal imaging systems to Singapore without a license, according to the DDTC records. Volfson had attempted to travel from Seattle with the Singapore-bound goods in his carry-on luggage but was stopped by agents of Customs and Border Protection (CBP), who seized them after he failed to produce approvals, records show. 

During a period in which the U.S. Navy had suspended Torrey Pines Logic from government contracting, the company “performed manufacturing work” on goods for Sojitz-US for ultimate delivery to the parent company, Sojitz Aerospace Corporation in Tokyo, the DDTC records show. Sojitz Aerospace is an affiliate of Sojitz Corporation, the parent company of Sojitz (Hong Kong) Limited, whose rogue traders led the firm into a sanctions violations settlement last month.

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