International Signal And Control
Illegal Arms Trafficking Case
CLASSIFICATION: Financial Crime
LOCATION
Lancaster, Pennsylvania
TIME PERIOD
1974-1991
VICTIMS
0 confirmed
International Signal and Control (ISC), a U.S. defense contractor based in Lancaster, Pennsylvania, was implicated in illegal arms sales and the export of classified military technology, primarily during the 1980s. The company, under CEO James Guerin, defrauded the British firm Ferranti after its acquisition in 1987, leading to Ferranti's collapse in 1991, and was involved in the unauthorized shipment of advanced military equipment to South Africa, which was subsequently forwarded to third countries, including Iraq. These activities, which included the export of radar-controlled anti-aircraft systems and missile technology without necessary licenses, were conducted with alleged U.S. government knowledge until official sanction was revoked in 1977. As a result of these crimes, Guerin was sentenced to 15 years in prison, and the case remains a significant example of defense contractor malfeasance and the complexities of covert operations during the Cold War era.
Investigators and the public theorize that International Signal and Control engaged in illegal arms sales with the complicity of U.S. clandestine organizations, suggesting a deep-rooted corruption within defense contracts. There is speculation that the abrupt cessation of these illegal activities following the company's sale to Ferranti indicates that ISC was heavily reliant on illicit operations for its financial viability. Additionally, some believe that the export of classified military technology to South Africa, which subsequently reached Iraq, reflects a broader network of covert military support that may have involved various government entities.
The Rise and Fall of International Signal and Control: A Tale of Deception and Betrayal
In the heart of Lancaster, Pennsylvania, a defense contractor by the name of International Signal and Control (ISC) once thrived. Renowned for manufacturing electronic missile subassemblies, navigation components, fuses, power supplies for proximity fuzes, and grenade technology, ISC seemed a pillar of American defense innovation. Yet beneath this veneer of legitimacy lay a shadowy world of illegal arms deals and clandestine operations that would eventually lead to one of the most significant corporate frauds of its time.
The Deceptive Prosperity of ISC
By the 1980s, ISC's business had taken a dark turn, primarily consisting of illicit arms sales prompted by various clandestine U.S. organizations. On paper, the company appeared to be extremely profitable, boasting high-priced, legitimate items. However, these profits were largely fictitious. The illusion of success came crashing down in 1987 when Ferranti, a British company, acquired ISC. The merger, initially seen as a strategic expansion, led to Ferranti's collapse in 1991 after the cessation of illegal sales left ISC with no discernible cash flow.
ISC's involvement in two major crimes would seal its fate. The first was its role in defrauding Ferranti, the very company that had purchased it. The second was the export of classified military technology to South Africa, which subsequently forwarded it to countries like Iraq.
The Origins and Operations of ISC
The company began its journey as Electronic Systems International (ESI) in 1974, manufacturing sub-assemblies for missiles like the AGM-45 Shrike and RIM-7 Sea Sparrow under standard arms contracts for the U.S. defense administration. ISC also operated a commercial repair facility for amateur radios and manufactured communication helmet radios for firemen, along with electronic bug zappers.
The Covert Exports to South Africa and Iraq
In 1974, with the tacit approval of U.S. agencies, ISC shipped advanced radar-controlled anti-aircraft systems to South Africa. Together, they developed a sophisticated ground-to-air missile, flaunting the requirement for export licenses. James Guerin, ISC's CEO, insisted that these activities were sanctioned by the U.S. government. He established a front company with South African authorities under the guise of a U.S. National Security Agency operation, shipping advanced electronic sensors without licenses. This covert operation was designed to set up listening posts to track Soviet submarines off the Cape of Good Hope. Operating under the name Gamma Systems Associates, ISC ordered restricted equipment and shipped it to South Africa, sometimes repackaging items with false descriptions for airline transport. This operation lost official sanction by 1977 and was subsequently dismantled.
Between 1984 and 1988, ISC sent over $30 million in military equipment to South Africa, including telemetry tracking antennas and gyroscopes essential for a medium-range missile system. Some of this technology found its way to Iraq. Additionally, ISC provided specifications for the Mk 20 Rockeye II cluster bomb to Chilean defense company Cardoen Industries, which produced a similar weapon used against coalition forces in the Persian Gulf War of 1991. These activities allegedly occurred with the complicity of U.S. intelligence agencies, including the CIA, in violation of U.S. and U.N. sanctions.
The Downfall Through Acquisition and Fraud
The acquisition of ISC by Ferranti in November 1987 set in motion a chain of events that would lead to Ferranti's disintegration due to the debts incurred by its new subsidiary. Eventually, Ferranti was dismantled, and most of its defense units were acquired by GEC. On October 31, 1991, James Guerin and 18 others were indicted by a Philadelphia Federal Grand Jury for orchestrating a $1.14 billion fraud related to the Ferranti/ISC merger. The charges included illegal arms sales to South Africa and Iraq.
On December 5, 1991, Guerin confessed to eight charges, including conspiracy to inflate ISC's accounts with non-existent international contracts, conspiracy to defraud Ferranti shareholders, and money laundering through U.S., U.K., and Swiss banks. He was sentenced to 15 years in prison, ultimately serving 13 years.
The Inman Controversy
In 1994, when Bobby Ray Inman withdrew from consideration as Bill Clinton's replacement for Defense Secretary Les Aspin, speculation arose that he aimed to hide his links to ISC. Inman, a former board member of ISC, faced accusations of either negligence or complicity in the approval of illicit exports.
Sources
- The ISC / Ferranti Scandal
- UK Parliament: House of Commons document: HC 28 Serious Fraud Office. Annual report 5 April 1991 to 4 April 1992
- Dixon, Norm. "US link in South African missile technology". Green Left Online.
- "South Africa's Nuclear Autopsy". The Risk Report.
- Country Data.Com: "Chile, Cardoen Industries"
- "The Making of a Dictator". Center for Defense Information.
- Made In the USA, Part III: US Company Listings A-M, LA Weekly
- James Guerin, who died Feb. 10, masterminded Lancaster County's largest fraud at $1B-plus
- Bobby Ray Inman and South Africa
In this tale of deception and international intrigue, ISC's story serves as a cautionary tale of how corporate greed and clandestine operations can lead to monumental downfalls. The legacy of ISC is a complex web of illegal arms dealings and betrayal, forever etched in the annals of corporate history.
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Illegal Arms Exports Begin
ISC ships advanced radar-controlled anti-aircraft systems to South Africa with US agency assistance.
Covert Operation Established
James Guerin sets up a front company for the NSA to facilitate illegal arms shipments to South Africa.
Major Equipment Exports
ISC exports over $30 million in military-related equipment to South Africa, some technology later transferred to Iraq.
Acquisition by Ferranti
ISC is acquired by Ferranti, leading to significant financial issues for the parent company.
Indictment of James Guerin
James Guerin and 18 others are indicted on charges related to a $1.14 billion fraud and illegal arms sales.
Guerin Pleads Guilty
James Guerin pleads guilty to multiple charges including conspiracy and money laundering, sentenced to 15 years.
Political Fallout
Bobby Ray Inman withdraws from consideration for Defense Secretary amid speculation about his ties to ISC.
International Signal and Control (ISC), a U.S. defense contractor based in Lancaster, Pennsylvania, was implicated in illegal arms sales and the export of classified military technology, primarily during the 1980s. The company, under CEO James Guerin, defrauded the British firm Ferranti after its acquisition in 1987, leading to Ferranti's collapse in 1991, and was involved in the unauthorized shipment of advanced military equipment to South Africa, which was subsequently forwarded to third countries, including Iraq. These activities, which included the export of radar-controlled anti-aircraft systems and missile technology without necessary licenses, were conducted with alleged U.S. government knowledge until official sanction was revoked in 1977. As a result of these crimes, Guerin was sentenced to 15 years in prison, and the case remains a significant example of defense contractor malfeasance and the complexities of covert operations during the Cold War era.
Investigators and the public theorize that International Signal and Control engaged in illegal arms sales with the complicity of U.S. clandestine organizations, suggesting a deep-rooted corruption within defense contracts. There is speculation that the abrupt cessation of these illegal activities following the company's sale to Ferranti indicates that ISC was heavily reliant on illicit operations for its financial viability. Additionally, some believe that the export of classified military technology to South Africa, which subsequently reached Iraq, reflects a broader network of covert military support that may have involved various government entities.
The Rise and Fall of International Signal and Control: A Tale of Deception and Betrayal
In the heart of Lancaster, Pennsylvania, a defense contractor by the name of International Signal and Control (ISC) once thrived. Renowned for manufacturing electronic missile subassemblies, navigation components, fuses, power supplies for proximity fuzes, and grenade technology, ISC seemed a pillar of American defense innovation. Yet beneath this veneer of legitimacy lay a shadowy world of illegal arms deals and clandestine operations that would eventually lead to one of the most significant corporate frauds of its time.
The Deceptive Prosperity of ISC
By the 1980s, ISC's business had taken a dark turn, primarily consisting of illicit arms sales prompted by various clandestine U.S. organizations. On paper, the company appeared to be extremely profitable, boasting high-priced, legitimate items. However, these profits were largely fictitious. The illusion of success came crashing down in 1987 when Ferranti, a British company, acquired ISC. The merger, initially seen as a strategic expansion, led to Ferranti's collapse in 1991 after the cessation of illegal sales left ISC with no discernible cash flow.
ISC's involvement in two major crimes would seal its fate. The first was its role in defrauding Ferranti, the very company that had purchased it. The second was the export of classified military technology to South Africa, which subsequently forwarded it to countries like Iraq.
The Origins and Operations of ISC
The company began its journey as Electronic Systems International (ESI) in 1974, manufacturing sub-assemblies for missiles like the AGM-45 Shrike and RIM-7 Sea Sparrow under standard arms contracts for the U.S. defense administration. ISC also operated a commercial repair facility for amateur radios and manufactured communication helmet radios for firemen, along with electronic bug zappers.
The Covert Exports to South Africa and Iraq
In 1974, with the tacit approval of U.S. agencies, ISC shipped advanced radar-controlled anti-aircraft systems to South Africa. Together, they developed a sophisticated ground-to-air missile, flaunting the requirement for export licenses. James Guerin, ISC's CEO, insisted that these activities were sanctioned by the U.S. government. He established a front company with South African authorities under the guise of a U.S. National Security Agency operation, shipping advanced electronic sensors without licenses. This covert operation was designed to set up listening posts to track Soviet submarines off the Cape of Good Hope. Operating under the name Gamma Systems Associates, ISC ordered restricted equipment and shipped it to South Africa, sometimes repackaging items with false descriptions for airline transport. This operation lost official sanction by 1977 and was subsequently dismantled.
Between 1984 and 1988, ISC sent over $30 million in military equipment to South Africa, including telemetry tracking antennas and gyroscopes essential for a medium-range missile system. Some of this technology found its way to Iraq. Additionally, ISC provided specifications for the Mk 20 Rockeye II cluster bomb to Chilean defense company Cardoen Industries, which produced a similar weapon used against coalition forces in the Persian Gulf War of 1991. These activities allegedly occurred with the complicity of U.S. intelligence agencies, including the CIA, in violation of U.S. and U.N. sanctions.
The Downfall Through Acquisition and Fraud
The acquisition of ISC by Ferranti in November 1987 set in motion a chain of events that would lead to Ferranti's disintegration due to the debts incurred by its new subsidiary. Eventually, Ferranti was dismantled, and most of its defense units were acquired by GEC. On October 31, 1991, James Guerin and 18 others were indicted by a Philadelphia Federal Grand Jury for orchestrating a $1.14 billion fraud related to the Ferranti/ISC merger. The charges included illegal arms sales to South Africa and Iraq.
On December 5, 1991, Guerin confessed to eight charges, including conspiracy to inflate ISC's accounts with non-existent international contracts, conspiracy to defraud Ferranti shareholders, and money laundering through U.S., U.K., and Swiss banks. He was sentenced to 15 years in prison, ultimately serving 13 years.
The Inman Controversy
In 1994, when Bobby Ray Inman withdrew from consideration as Bill Clinton's replacement for Defense Secretary Les Aspin, speculation arose that he aimed to hide his links to ISC. Inman, a former board member of ISC, faced accusations of either negligence or complicity in the approval of illicit exports.
Sources
- The ISC / Ferranti Scandal
- UK Parliament: House of Commons document: HC 28 Serious Fraud Office. Annual report 5 April 1991 to 4 April 1992
- Dixon, Norm. "US link in South African missile technology". Green Left Online.
- "South Africa's Nuclear Autopsy". The Risk Report.
- Country Data.Com: "Chile, Cardoen Industries"
- "The Making of a Dictator". Center for Defense Information.
- Made In the USA, Part III: US Company Listings A-M, LA Weekly
- James Guerin, who died Feb. 10, masterminded Lancaster County's largest fraud at $1B-plus
- Bobby Ray Inman and South Africa
In this tale of deception and international intrigue, ISC's story serves as a cautionary tale of how corporate greed and clandestine operations can lead to monumental downfalls. The legacy of ISC is a complex web of illegal arms dealings and betrayal, forever etched in the annals of corporate history.
No Recent News
No recent news articles found for this case. Check back later for updates.
No Evidence Submitted
No evidence found for this case. Be the first to submit evidence in the comments below.
Join the discussion
Loading comments...
Illegal Arms Exports Begin
ISC ships advanced radar-controlled anti-aircraft systems to South Africa with US agency assistance.
Covert Operation Established
James Guerin sets up a front company for the NSA to facilitate illegal arms shipments to South Africa.
Major Equipment Exports
ISC exports over $30 million in military-related equipment to South Africa, some technology later transferred to Iraq.
Acquisition by Ferranti
ISC is acquired by Ferranti, leading to significant financial issues for the parent company.
Indictment of James Guerin
James Guerin and 18 others are indicted on charges related to a $1.14 billion fraud and illegal arms sales.
Guerin Pleads Guilty
James Guerin pleads guilty to multiple charges including conspiracy and money laundering, sentenced to 15 years.
Political Fallout
Bobby Ray Inman withdraws from consideration for Defense Secretary amid speculation about his ties to ISC.