An Iranian businessman and a Chinese importer have been charged in a seven-count federal indictment with conspiring to smuggle nuclear-related equipment from the US to Iran, federal officials announced on Friday.
Parviz Khaki of Iran and Zongcheng Yi of Guangzhou, China, are accused of plotting to evade the US trade embargo of Iran and other export controls by shipping regulated items to Hong Kong before they were reshipped to Iran.
The equipment and materials apparently sought by Mr. Khaki could be used to construct, operate, and maintain gas centrifuges to enrich uranium. Khaki also allegedly sought radioactive materials for shipment to Iran.
The charges were returned by a federal grand jury in Washington, D.C.
“Today’s indictment sheds light on the reach of Iran’s illegal procurement networks and the importance of keeping US nuclear-related materials from being exploited by Iran,” Lisa Monaco, assistant attorney general for national security, said in a statement.
“Iranian procurement networks continue to target US and Western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe,” she said.
The smuggling conspiracy began in October 2008 and continued until January 2011, according to the indictment.
In March 2009, Khaki began dealing with a US-based individual who identified himself as an experienced smuggler. The US-based contact advised Khaki that the product he was seeking could not be exported from the United States legally, but that for a fee he could help make the transaction happen.
What the US contact didn’t tell Khaki is that he was an undercover federal agent posing as a smuggler.
The resulting undercover operation offered US officials insight into secret efforts in Iran to obtain nuclear capability.
Although the conspiracy involved discussions about shipping a wide range of equipment and sensitive materials, the indictment charges the men with actually shipping only two products from the US to Iran.
These products were two lathes and a quantity of nickel alloy 120. The shipments were made to Mr. Yi in Hong Kong, which was identified in shipping documents as the endpoint for the products.
Instead, Yi allegedly shipped the lathes and nickel alloy on to Khaki in Iran.
In addition to the embargo of shipments to Iran, many US exports – particularly sensitive technology – require certification that they will not be transshipped to third countries. The indictment indicates that Khaki and Yi sought to bypass these export restrictions.
Khaki was arrested in May in the Philippines. Yi is being sought by US authorities.
Both men face up to 85 years in prison if convicted of all counts. The charges include conspiring to violate the Iran embargo. They are both also charged with conspiring to defraud the US, smuggling, illegally exporting goods from the US to Iran, and money laundering.
According to the indictment, the export conspiracy included discussions about sending 20 tons of high-quality US-made steel to Iran. The steel, known as maraging steel, can be used in gas centrifuges for uranium enrichment.
Moreover, the alleged conspirators discussed obtaining a magnetic mass spectrometer used to perform isotope analysis during the process of enriching uranium. And they discussed shipping other technical equipment associated with gas centrifuges, including gauges, pumps, and pressure transducers.
In May 2009, Khaki allegedly sent the undercover agent an e-mail asking the agent to purchase “radioactive sources and test materials” from a company in Connecticut. Requested products included barium 133 source and europium 152 source.
In January 2011, the indictment adds, Khaki asked the agent to purchase and ship cobalt 57 source and cadmium 109 source. There is no indication those contacts went beyond mere discussion.
“By dismantling this complex conspiracy to deliver nuclear-related materials from the United States to Iran, we have disrupted a significant threat to national security,” John Morton, director of US Immigration and Customs Enforcement (ICE), said in a statement.