U.S. Department Of Defense Magnet Supplier Accused Of Sending Military Intelligence To Communist China

On November 10, it was reported that Phil Pascoe, 60, and Monica Pascoe, 45, of Indiana, and Scott Tubbs, a 59-year-old man from Georgetown, were charged along with Quadrant Magnetics LLC with smuggling goods and selling U.S. military data to communist China, according to a release from the U.S. Department of Justice. They have been accused of wire fraud, violation of the Arms Export Control Act, unlawfully supplying the Department of Defense with rare-earth magnets used in aviation systems that were magnetized in Communist China, a violation of national regulations.

The U.S. DOJ’s indictment alleges that between January 2012 and December 2018, the three defendants “conspired to send approximately 70 drawings containing export-controlled technical data to a company located in China without a license from the U.S. government.” The charging documents also alleged that Quadrant Magnetics imported its rare earth magnets from a company in China and sold them to two U.S. companies which used magnets in military equipment sold to the DOD. Under the Defense Acquisition Regulation System, rare-earth magnets sold to the DOD must be produced and magnetized in the United States or other authorized countries, a list that doesn’t include China.

The Defense Criminal Investigative Service, the FBI, the Department of Homeland Security, the IRS’s Criminal Investigation Unit, the Naval Criminal Investigative Service, and the Department of Energy’s Office of Inspector General, are involved in the investigation into this case.