Three individuals have been arrested for allegedly sending military secrets to China and importing illegal Chinese magnets for use in American jets.
The Justice Department alleged that the three sent approximately 70 drawings with export-controlled technical data on them to a Chinese company without a U.S. government license to do so.
The drawings belonged to two U.S. companies and were related to aviation, submarines, radars, tanks, mortars, missiles, targeting systems, and fire control.
The three individuals are Phil Pascoe, 60, and Monica Pascoe, 45, both of Floyds Knobs, Indiana, and Scott Tubbs, 59, of Georgetown, Kentucky.
Along with a magnet company based in Louisville, Kentucky called Quadrant Magnetics, the three are also charged in an alleged scheme to supply the Defense Department with rare earth magnets smelted and magnetized in China.
Rare earth magnets are the strongest magnets now available. They are made using rare earth metals, of which China is the world’s largest producer, according to Magnetsource.com.
Quadrant used the magnets in components it sold to the DOD for use in F-16 and F-18 jets and other assets. U.S. law says rare earth magnets sold to DOD have to be produced and magnetized in the U.S. or an approved country, which China is not.
On its website, Quadrant, founded in 1992, describes itself as “a worldwide leader in the magnetic industry.”
Quadrant earlier this year announced plans for a $95 million rare earth magnet facility called “Project NeoGrass,” which it said would revitalize U.S. rare earth manufacturing, according to the Courier-Journal.
As part of the project, Quadrant cut a deal with Kentucky that could yield a $3.4 million tax break over 10 years. A spokesperson for Kentucky Gov. Andy Beshear said the governor’s office “just learned of the charges against this company and are actively reviewing them,” the Courier-Journal reported.
