Fighter jet parts and other U.S. military gear that were to be sold to Iran and China have been traced back to the Pentagon. The gear was not sold directly to these countries, but rather it was obtained by middlemen who the sold it again.
In one case, federal investigators said that a Pakistani middleman purchased arms from the Defense Department’s surplus auction. The arms purchased were Chinook helicopter engine parts, which the Immigration and Customs Enforcement agency said did successfully make it to Iran.
In a second case, Tomcat parts were bought from the Defense Department’s surplus division. Custom agents confiscated and returned the parts, but later found out that the Defense Department had resold the parts to another buyer suspected of being a broker for Iran.  Except for the US, which recently retired its Tomcat air fleet, Iran is the only other country flying Tomcats.
In 2005 alone, the profits made from the Pentagon's public surplus sales were $57 million. 
The Pentagon has had previous incidents in the past.  In 2003, a Camden, New Jersey company, State Metal Industries, was convicted for selling AIM-7 Sparrow missile guidance parts, which it had bought from the Defense Department’s surplus auctions, to an entity partially owned by the Chinese government.
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Report says US military gear sold to Iran and China