TUCKED BETWEEN THE ATLANTIC & INDIAN OCEANS, CAPE TOWN LAYS CLAIM AS THE HIPPEST CITY IN SOUTH AFRICA. FAMOUS FOR ITS BEACHES AND SPECTACULAR SETTING. THIS IS ONE OF THE LAST PLACES YOU'D EXPECT TO FIND A NUCLEAR BLACK MARKET.
I'VE COME HERE TO FOLLOW THE STORY OF A MAN NAMED ASHER KARNI. HE'S BEEN ACCUSED OF TRAFFICKING NUCLEAR TECHNOLOGY TO PAKISTAN.
KARNI CAME TO SOUTH AFRICA FROM ISRAEL 20 YEARS AGO.
HE BECAME A RESPECTED MEMBER OF HIS SYNAGOGUE, CONDUCTING SERVICES WHEN RABBI JONATHAN ALTMAN WAS OUT OF TOWN.
SCHAPIRO: What kind of man is he?
ALTMAN: He was a very good leader, and people liked him. He was really their teacher, he was their friend, he was their mentor in many ways. He would read from the Torah three times a week, he would run the services, he would give classes, he was very much a mainstay of this community
SCHAPIRO: So what was the response when this man, who you've gotten to know well, is accused?
ALTMAN: It doesn't make sense to me that a man who has children in the land of Israel, right, would sell something that could be used for nuclear arms, knowingly, right, to a country that is vocally anti-Israel. When you think it through on that level, it just seems absurd.
IT DID SEEM BIZARRE -- THAT AN ORTHODOX JEW WOULD BE INVOLVED IN NUCLEAR SMUGGLING TO PAKISTAN.
IT ALL BEGAN WHEN KARNI TOOK A JOB AT EAGLE TECHNOLOGY, A COMPANY THAT SELLS HIGH-TECH ELECTRONIC EQUIPMENT TO THE MILITARY AND OTHER CLIENTS. I WENT TO SEE EAGLE'S LAWYER, MICHAEL BAGRAIM.
BAGRAIM: My reaction to that allegation when I first heard it and I first read it in the newspaper was one of shock and horror. Here's an allegation of an Orthodox Jew in South Africa with an Israeli background selling nuclear triggers to Pakistan, which could be used in the nuclear industry. And quite frankly I almost fell off my chair.
BAGRAIM TOLD ME THE COMPANY HAD NO IDEA KARNI WAS INVOLVED IN NUCLEAR SMUGGLING. BUT THEY BECAME SUSPICIOUS OF WHAT HE WAS UP TO.
BAGRAIM: Asher Karni had been working for them for many years, with a background in the industry; he had done training in the Israeli military. And in turn, he became the most successful agent they had.
His employer Eagle suspected that he was draining a lot of this business for his own account. There was a lot of activity going on and the sales seemed to be not matching the activity. Asher Karni then started disappearing at lunch hour, at odd times during the day, and they wanted to know who he was going to see.
EAGLE HIRED A PRIVATE DETECTIVE, PHILLIP REYNOLDS, TO INVESTIGATE FURTHER.
REYNOLDS: I was basically asked to conduct surveillance on Asher and attempt to ascertain what he was up to. He was suspected of possibly doing underhanded deals outside the country, possibly using their company as a front for his operation.
REYNOLDS: it sounded like, a bank account, or bank accounts, had been created, and the additional revenue was being left offshore, and in effect, I would say, that is basically defrauding his own company. I did have a note that he was apparently, or is, or was, a major in the Israeli army.
I do have a photograph over here of Asher Karni, over here in my notes... And then I have another photo here, not the clearest. I think this was the individual as well that was suspected of being involved in some other way with Asher.
THAT'S MARISA KIRSH, AN AMERICAN WHO'D BEEN THE EXECUTIVE SECRETARY TO EAGLE'S PRESIDENT. AND THEN WAS FIRED. THE DETECTIVE FOUND OUT SHE WAS SECRETLY MEETING WITH KARNI.
BAGRAIM: They would spend an hour for lunch together, he'd hand over notes, he'd give her instructions, she'd take some minutes, and she'd disappear off to go do her business.
THE COMPANY ALSO DISCOVERED THAT THEIR FORMER SECRETARY WAS WANTED IN THE UNITED STATES FOR TAKING HER SON OUT OF THE COUNTRY IN VIOLATION OF A JOINT CUSTODY ORDER. KARNI'S INVOLVEMENT WITH KIRSH CAUSED EAGLE TO DIG DEEPER.
BAGRAIM: Eagle Technology got suspicious, as to what was all this activity, and they went into the computer system to have a look at the emails.
BAGRAIM TOLD ME THE EMAILS REVEALED THAT KARNI WAS CUTTING SIDE DEALS WITH TWO COMPANIES HE'D SET UP -- ONE WITH MARISA KIRSH.
BAGRAIM: These electronic components were sourced, a lot of it in America, in the United States, and then in turn sent on to other countries. We also then investigated and we found that the other countries were India, Israel, and Pakistan.
We also discovered that he had opened bank accounts in both Israel and India, and in particular the one in India was under the name of Eagle Technology, which is very wrong.
And that, to us, was a turning point. We couldn't have the man sitting there. It was like having a viper in your bosom. And you couldn't have that viper in your bosom; you had to remove it before it bit you. And we did remove him straightaway at that point.
KARNI WAS FIRED, LOSING A SUBSTANTIAL INCOME. ODDLY ENOUGH, HE THEN MOVED INTO A MANSION ON OCEAN VIEW DRIVE, ONE OF THE WEALTHIEST NEIGHBORHOODS IN CAPE TOWN. HE RAN HIS COMPANY FROM AN OFFICE IN HIS HOUSE, WITH THE HELP OF MARISA KIRSH.
IT TURNS OUT THAT KARNI WAS SMUGGLING COMPONENTS FOR NUCLEAR BOMBS FROM THE UNITED STATES VIA SOUTH AFRICA TO PAKISTAN. IT ALL STARTED IN THE SUMMER OF 2003, WHEN KARNI RECEIVED AN EMAIL FROM A PAKISTANI BUSINESSMAN, HUMAYUN KHAN. THEY HAD WORKED TOGETHER BEFORE.
KHAN WANTED TO BUY 200 "TRIGGERED SPARK GAPS". THESE ARE HIGHLY SPECIALIZED ELECTRONIC DEVICES. THEY CAN BE USED IN A MEDICAL PROCEDURE TO BREAK UP KIDNEY STONES. OR THEY CAN BE USED TO DETONATE A NUCLEAR WEAPON.
KHAN ASKED KARNI TO MAKE THE PURCHASE FROM A SALES AGENT IN FRANCE.
HIS EMAIL ADVISED, "PLEASE DO NOT DISCLOSE THE END DESTINATION."
A FEW DAYS LATER, THE FRENCH AGENT SENT A FAX SAYING THAT KARNI WOULD NEED AN EXPORT LICENSE TO SHIP TO A COUNTRY LIKE PAKISTAN - IT WAS A U.S. REQUIREMENT.
KARNI TOLD KHAN HE WOULD NOT BE ABLE TO COMPLETE THE DEAL.
BUT KHAN PERSISTED: "I KNOW IT IS DIFFICULT BUT THAT'S WHY WE CAME TO KNOW EACH OTHER". HE PUSHED KARNI TO FIND ANOTHER SOURCE.
NINE HOURS LATER, KARNI SENT HIS RESPONSE.
WHAT KARNI DIDN'T KNOW WAS THAT HIS EMAIL TRAFFIC WAS BEING FORWARDED TO OFFICIALS IN THE U.S. COMMERCE DEPARTMENT BY AN "ANONYMOUS TIPSTER" IN SOUTH AFRICA.
IN DECEMBER 2003, A TEAM OF SOUTH AFRICAN POLICE RAIDED KARNI'S HOUSE.
AS KARNI WATCHED, THE POLICE CARTED AWAY BOXES OF COMPUTER FILES.
KARNI'S ATTORNEY, PETER KANTOR, TOLD ME WHAT HAPPENED THAT DAY.
KANTOR: They knocked on his door and they said, there's a delivery here for you. He opened the door, and 12 big men dressed in black swooped in and searched the place. They told him what it was, they showed him the warrant, a search warrant, and they said, we're here because you've been involved in breaking the law in certain dealings.
KANTOR: He said to me, I've given them everything. I've given them my hard drives, copies, everything, I've told them completely; I've been completely honest about the deal. They believed him, they didn't arrest him, and they didn't take his passport away.
BUT THEN KARNI MADE A FATAL MISTAKE. ON NEW YEARS DAY 2004, HE FLEW INTO DENVER, COLORADO, TO GO ON A SKIING HOLIDAY WITH HIS FAMILY.
AS KARNI STEPPED OFF THE PLANE, U.S. CUSTOMS AGENTS ARRESTED HIM.
KANTOR: I was so surprised and shocked when it assumed those proportions. I never dreamed it would escalate into something of this nature. I mean, Asher was a small-time electronics supplier. And to think that he had been incarcerated in the U.S. for being an arms dealer was just unthinkable.
SCHAPIRO: There are elements that are hard to square. Orthodox Jew selling nuclear triggers to Pakistan
KANTOR: To say that he was selling arms to Pakistan, which at the time was very much against the interest of Israel, would be to say that he was undermining everything that he stood for, and that he was leading a fundamentally dishonest life.
ASHER KARNI WAS ARRESTED UNDER THE EXPORT ADMINISTRATION ACT. THE LAW IS DESIGNED TO PREVENT THE PROLIFERATION OF NUCLEAR TECHNOLOGY.
THE TRIGGERS KARNI WAS TRADING ARE ONE OF OVER 2,000 ITEMS ON A U.S. DEPARTMENT OF COMMERCE WATCH LIST. THESE ARE WHAT ARE CALLED "DUAL-USE" COMPONENTS -- THEY HAVE BOTH CIVILIAN AND MILITARY USES. TO SELL THEM, YOU NEED A LEGITIMATE "END USER"-- SUCH AS A HOSPITAL --AND FOR CERTAIN RESTRICTED COUNTRIES, YOU ALSO NEED AN EXPORT LICENSE.
SCHAPIRO: So he said he was sending them to South Africa, which is not illegal, and then passing them on to Pakistan from South Africa.
KANTOR: He admitted straight up that he had put the destination South Africa, and he stated his reason. He didn't want to put the supplier in touch with the user, in case they cut him out. He was straight up front -- he said, I put the wrong entry in the form for the United States. I didn't know it was a problem, and I had done it often before.
SCHAPIRO: All right. Let me ask you this. Asher Karni first tries to attempt to buy the spark-gap triggers from a company in France.
KANTOR: Really? OK, I didn't know that.
SCHAPIRO: They tell him he needs an export license. And he says, OK, forget it, and thus puts Baragwanath hospital as the end user. So it no longer appears to be a deal aimed at Pakistan. How does one explain that kind of ..
KANTOR: No, that would tend to indicate that he might have suspected that he needed a license. That would tend to indicate that.
THIS IS HOW EASY IT WAS FOR KARNI TO EVADE THE SYSTEM -- ALL HE HAD TO DO WAS SAY HE WAS BRINGING THE DEVICES TO SOUTH AFRICA, NOT PAKISTAN. AND GIVE A CREDIBLE "END USER", A HOSPITAL. SO HE AND MARISA KIRSH CHANGED THEIR STORY: SHE SENT AN EMAIL SAYING THE TRIGGERS WERE GOING TO BARAGWANATH HOSPITAL IN SOWETO.
KARNI PICKED THE LARGEST HOSPITAL IN THE WORLD. I WENT TO SEE LLOYD THOMPSON, A DOCTOR IN THE UROLOGY DEPARTMENT.
SCHAPIRO: In the course of your work, do you use something called triggered spark gaps?
THOMPSON: Yes, yes we do. It's part of our treatment for stones, uretatic stones.
I SHOWED DR. THOMPSON KARNI'S CASE FILE.
THOMPSON: Yes, I see that. End users.
SCHAPIRO: End user. What does it say there?
THOMPSON: Baragwanath Hospital.
SCHAPIRO: So the idea that this man, Asher Karni, was sending 200 spark-gap triggers to Baragwanath Hospital.
THOMPSON: No, we don't have that kind of, no. We don't order individual parts. Not even when a machine is under warranty. It doesn't make sense. They definitely have never arrived here, and they sure as hell were not ordered from here.
IN THE SUMMER OF 2003, KARNI FINALIZED THE DEAL WITH HUMAYUN KHAN'S COMPANY, PAKLAND. 200 SPARK GAPS WOULD BE SENT IN THREE SHIPMENTS FROM THE UNITED STATES.
BUT WHAT KARNI DIDN'T KNOW WAS THAT THE SHIPMENT WAS BEING FOLLOWED BY SPECIAL AGENTS FROM THE COMMERCE DEPARTMENT. THE U.S. HAD SET UP A STING OPERATION, ASSISTED BY THE ANONYMOUS INFORMANT IN SOUTH AFRICA. THE TRIGGERS HAD BEEN DISABLED BEFORE THEY WERE SENT.
IF IT WASN'T FOR THE TIPSTER, 200 ACTIVE NUCLEAR TRIGGERS COULD BE IN PAKISTAN TODAY.
I ASKED MICHAEL BAGRAIM, THE LAWYER FOR KARNI'S OLD COMPANY, WHO COULD HAVE TURNED KARNI IN...
ONLY A FEW PEOPLE HAD ACCESS TO KARNI'S EMAIL.
BAGRAIM: It could be Marisa Kirsh... It could be anyone in Asher Karni's organization or anyone in Eagle Technology organization. I would have had no qualms about doing it. I think it's the right thing to do.
BAGRAIM THINKS KARNI KNEW EXACTLY WHAT HE WAS DOING.
Asher Karni knows what a triggered spark gap is, and Asher Karni knows what you can use it for, because that's his expertise. There are not many people with that expertise in the world.
BAGRAIM: Asher Karni was involved in the procurements there in the Israeli military.
And he was a man also with a business-science degree.
Put those two together and you've got a genius, in this particular industry.
THIS MONTH, THE JUSTICE DEPARTMENT FINALLY UNSEALED DOCUMENTS IN THE KARNI CASE. THEY REVEAL THAT KARNI HAS PLED GUILTY TO FIVE FELONIES AND IS NOW COOPERATING WITH U.S. INVESTIGATORS. HE IS FACING UP TO 25 YEARS IN PRISON.
KARNI'S CONFESSION LED TO AN INDICTMENT AGAINST HIS PARTNER IN PAKISTAN, HUMAYAN KHAN. THE U.S. HOPES TO EXTRADITE HIM FOR TRIAL. IF FOUND GUILTY, KHAN WOULD FACE UP TO 35 YEARS IN PRISON.
THE UNSEALED GOVERNMENT CHARGES ALSO SAY THERE WAS A THIRD PERSON INVOLVED -- SOMEONE THEY CALL "CO-CONSPIRATOR B" WHO WORKED FOR KARNI'S COMPANY. THE GOVERNMENT SAYS THIS PERSON, ACTING ON KARNI'S BEHALF, SENT THE REQUEST, WHICH FALSELY STATED THAT THE TRIGGERED SPARK GAPS WERE DESTINED FOR THE HOSPITAL IN SOWETO. A CROSS-CHECK OF KARNI'S EMAIL TRAFFIC REVEALS THAT MESSAGE BORE THE NAME, "MARISA."
THE CASE UNCOVERED HERE IN CAPE TOWN IS STILL UNDER INVESTIGATION BY COMMERCE DEPARTMENT OFFICIALS. THEY NOW SAY IT MAY REVEAL A NUCLEAR UNDERGROUND ON THE SAME SCALE AS THE INFAMOUS A.Q. KHAN NETWORK IN PAKISTAN.