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Jury: Two Guilty In Arms-to-Iran Conspiracy

December 16, 1985

ORLANDO, Fla. (AP) _ A publisher-entrepreneur and a registered arms dealer were convicted Monday of federal charges of conspiracy and wire fraud in a plot to ship 1,140 Army anti-tank missiles to Iran.

The jury acquitted four other defendants after four days of deliberations following a five-week trial.

Convicted of one count of conspiracy and two counts of wire fraud each were Paul Cutter, 47, magazine publisher-writer from San Jose, Calif., and Charles St. Claire, 52, an international arms dealer from Granada Hills, Calif.

Cutter was described by the government as the mastermind of the scheme, uncovered by an FBI undercover operation earlier this year. He was acquitted of a charge of attempted bribery of an Army officer who works at the Pentagon.

Cutter had contended that the FBI informant who exposed the plot, Anthony Romano, had threatened to kill him if he backed out of the deal. Romano has a criminal history and past associations with organized-crime groups in the Northeast, according to court records and trial testimony.

″Apparently, the jury thinks it is OK for the government to use Mafiosos and threaten the defendants,″ said Cutter’s attorney, Chris Carroll.

The prosecution said St. Claire contacted Romano in March in Orlando. Witnesses said St. Claire furnished a shopping list of missiles, airplane parts and other weapons he wanted to buy for the government of the Ayatollah Khomeini for use in its war with Iraq.

Weapons sales to Iran were banned in 1979.

″I think it stinks. I think it’s bad,″ St. Claire said of the verdict.

The jurors acquitted George Neranchi, a Cutter employee from San Francisco; Farhin Sanai, Iranian-born resident of Calabasas, Calif.; Fadel Norman Fadel, 54, her husband; and Hossein Monshizadeh-Azar, identified by the prosecution as an Iranian government official. Sanai and Fadel are international commodities brokers.

They claimed that Cutter had tricked them into the plot by passing himself off as a U.S. government agent who was putting together the arms deal with the sanction of American intelligence officials.

″The convictions were a partial vindication of the government’s position ... The acquittals show that the jury believed that these people were connived by Paul Cutter to participate in the scheme,″ said Assistant U.S. Attorney Stephen Calvacca. ″All told, the FBI investigation was successful and the government is satisfied.″

Cutter, an American born in Yugoslavia, worked for the U.S. Information Agency in Moscow in the 1960s. He owns European Defense Associates and EDA Publishing Co. of Santa Clara, Calif.

The jury also found European Defense Associates guilty of the same three counts as Cutter and St. Claire.

Cutter remains in jail pending his Jan. 21 sentence. St. Claire remained free on bond until his March 22 sentencing.

Conviction of conspiracy carries a 5-year prison sentence and a $10,000 fine. Each count of wire fraud has a penalty of one year in prison and a $1,000 fine.

Seven people were originally arrested on July 31 in California, Florida and Virginia.

U.S. Army Lt. Col. Wayne G. Gillespie, 46, of Alexandria, Va., was acquitted of conspiracy, wire fraud and bribery charges by U.S. Circuit Judge G. Kendall Sharp on Nov. 26. Gillespie, a 25-year Army veteran, works for the Army Materiel Command at the Pentagon.

The judge agreed with defense contentions that Gillespie was ″an unwitting tool″ of Cutter when he went to the Orlando suburb of Altamonte Springs to inspect two U.S. Army TOW missiles at Romano’s house.

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