Network Analysis for Strategic Trade Investigations
Case Study: Asher Karni Network
Network analysis is a powerful tool for consolidating information from various sources and interactions in one place. It moves beyond the focus on single entities or transactions to derive insights from chains of relationships between entities. In the context of strategic trade analysis, it assists in integrating data from all parts of international trade transactions, including the involvement of banks, front companies, middle-men/facilitators, freight forwarders, customs authorities, manufacturers, subsidiaries, sales representatives, and end-users.
Through network analysis, we can start to identify broader patterns across transactions. Is there a facilitator that set in motion multiple strategic good transfers? Is a single end-user receiving multiple strategic goods that amount to a major proliferation concern? Is one manufacturer being complicit or exploited by multiple bad actors in the transfer of strategic goods? This technique can help us explore data to find high-priority targets or be the repository to keep track of an ongoing investigation.
This case study introduces network analysis through Asher Karni and his role in facilitating illicit trade in strategic goods for the Pakistani nuclear program in the early 2000s. Using publicly available documents, including the U.S. indictment of Karni and his co-conspirators, we will construct a network diagram.
Facts of the Case
Asher Karni is an Israeli and South African businessman, who at the time of his involvement in this network was residing in South Africa. In 2003, Karni was approached by Humayun Khan, the CEO of Pakland PME, to procure triggered spark gaps produced by PerkinElmer Optoelectronics, an American manufacturer. Triggered spark gaps are dual-use strategic goods that “emit an intense electrical pulse whose timing and duration are controlled to the microsecond.”i They can be used for medical purposes in lithotripters, which break up kidney stones. They can also be used to trigger detonation when used as part of a nuclear device. Triggered spark gaps are listed on the Nuclear Suppliers Group dual-use equipment list and are subject to U.S. export control regulations.
After this initial solicitation, Karni became the facilitator, seeking out potential suppliers for the triggered spark gaps that he could route to his Pakistani customer. His first advance was through Polytec, a PerkinElmer sales representative in France. Karni was informed of the export control requirements related to triggered spark gaps, which include an end-user statement certifying that the goods would be used in South Africa and not for nuclear applications.ii After relaying this information to Khan, he was told through email that “I know it is difficult but that’s why we came to know each other (P)lease help to re-negotiate this from any other source….We can give you an end user information as it is genuinely medical requirement.”iii Khan was seeking hundreds of triggered spark gaps, which does not conform with typical hospital requirements of five or six at a time.
After the setback with Polytec, Karni made a connection with Giza Technologies in New Jersey and its owner Zeki Bilmen. Giza Technologies then was used to successfully approach PerkinElmer to acquire the triggered spark gaps. An order was placed for 200 triggered spark gaps from Pakland PME with Top-Cape, Karni’s company in South Africa, on behalf of stated end-user AJKMC Lithography Aid Society, which was later found to be a front/false end-user. The goods were to be sent from the United States to South Africa, taking advantage of an exemption in export control regulations, and then re-exported illegally to Pakistan. While authorities in the United States got wind of the transaction, a shipment was able to make it to Pakistan via South Africa and the UAE.
Court documents and indictments cited the valuable information gathered through trade documentation and other sources, such as:iv
Bank transfers and details related to the financing of the transactions;
Identification of the freight forwarder, AEI Freight Forwarding, who was approached to cooperate with the investigation;
False statements on the shipper’s export declaration by Giza Technologies stating that the ultimate destination was in South Africa and the end-user as Top-Cape;
Misclassification of triggered spark gaps under a different HS code, with no ECCN, and a false commodity description of “electrical splices and couplings for switching”;
Transshipment through the UAE with additional false documentation, stating the goods were “scientific equipment.”
An investigation of Karni and his dealings ultimately led to a case being filed and Karni’s arrest when he went on vacation to Colorado in January 2004. The associated indictment revealed at least 11 strategic goods transactions that involved not only triggered spark gaps, but accelerometers, infrared detectors, manometers, oscilloscopes, and regulators. We will not go into all the specific details of these transactions here, but they can be found in the indictment and cited sources.
Preparing the Data
On October 31, 2003, United States of America v. Humayun A. Khan was filed in U.S. District Court with multiple charges of violations of the Export Administration Regulations and other laws. This document provides an accessible source of entities and their actions with regard to the Karni facilitated procurement and can be used to create a network diagram. The figure below shows an example of identification of nodes in the network within the indictment.v
We can also use the indictment to create edges, each representing a relationship or interaction between nodes. This is a directed network, so each node will be identified as either a “source” or “target” of the relationship. Each edge is also provided a label that categorizes the different types of interactions within the network. In addition, two additional fields were added to identify, wherever possible, the specific strategic good involved and an identifier that provides an order number for separate transactions. Based on the details of the indictment, the following is the edge table for the Karni network:
Karni Network Diagram
The following is the network diagram for the Karni network based on the U.S. indictment. It was created using Social Network Visualizer, a freely available visualization program.
Network visualizations are arranged based on algorithms and node placement, in this case, does not have any particular significance outside of visual efficiency and proximity of edge relationships.
The nodes in the network diagram above are colored from blue to red in increasing values of betweenness centrality. Centrality measures use the mathematical properties of a constructed network to indicate the relative importance of individual nodes. There are many different types of centrality measures. In this case, high betweeness centrality is indicative of entities that serve as bridges between many entities in the network; they are the facilitators. Unsurprisingly, node 4 represents Asher Karni and node 13 is Humayun Khan. The other nodes top betweenness scores are an unnamed South African Intermediary (Node 25), AEI Freight Forwarding (Node 1), and Giza Technologies (Node 10) which arranged the initial falsified transfer of strategic goods from PerkinElmer. These nodes are good potential targets for monitoring or potential flipping by investigators. In fact, AEI Freight Forwarding ended up assisting law enforcement in this investigation. These network analysis metrics are useful here, but even more so if used as part of initial data exploration before there is a known potential target like Karni or Khan.
The networks we construct are rarely considered “complete.” They only show known and uncovered relationships between entities. There may be more hidden connections in information we have not found yet. Network diagrams can help identify isolated nodes or areas where we suspect there are missing connections that should be investigated further. Networks can and should grow as more information is gathered and investigations progress.
The Karni network can be broken down based on individual orders in the indictment, as seen in the figure below. This subset provides the details of Order 4 for triggered spark gaps.
The Karni network diagram is a demonstration of how we can prepare data for network analysis and how these tools effectively consolidate information sources. The network metrics also accurately highlighted the key facilitators and players at the heart of the network. This case study shows that network analysis can be used effectively as an investigative tool.
i. Shapiro, Michael, “The Middleman,” Mother Jones, May/June 2005 Issue, https://www.motherjones.com/politics/2005/05/middleman/.
ii. Blackford, Jacob, “Asher Karni Case Shows Weakness in Nuclear Export Controls,” Institute for Science and International Security, 8 September 2004, https://isis-online.org/publications/southafrica/asherkarni.html.
iii. Ibid.
iv. Ibid.
v. United States of America v. Humayun A. Khan, United States District Court for the District of Columbia (2003).