WASHINGTON – Two men accused of creating a global network of shell companies to deceive U.S. companies into supplying nuclear-related materials to Iran were indicted by a federal grand jury in the District of Columbia following an international investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
According to a superseding indictment made public Friday, Iranian national Parviz Khaki, 43, and Chinese national Zongcheng Yi allegedly attempted to obtain and illegally export U.S.-origin materials to Iran that can be used to construct, operate and maintain gas centrifuges to enrich uranium. This includes materials such as maraging steel, aluminum alloys, mass spectrometers, vacuum pumps and other items. Khaki is also accused of conspiring to procure radioactive source materials from the U. S. for customers in Iran.
HSI special agents uncovered the conspiracy in 2008. Special agents found that Khaki directed Yi and others to contact U.S. companies about purchasing U.S.-origin goods. Yi and other conspirators then placed orders and purchased goods from various U.S. companies and had the goods exported from the United States through China and Hong Kong to Khaki and others in Iran. Yi and others allegedly made a variety of false statements to U.S. companies on behalf of Khaki to conceal that Iran was the final destination and end-user of the goods and to convince U.S. companies to export these items to a third country.
"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," said ICE Director John Morton. "Homeland Security Investigations will continue to pursue those who exploit U.S. businesses to illegally supply foreign governments with sensitive materials and technology that pose a serious risk to America and its allies."
"Today's indictment sheds light on the reach of Iran's illegal procurement networks and the importance of keeping U.S. nuclear-related materials from being exploited by Iran," said Assistant Attorney General for National Security Lisa Monaco. "Iranian procurement networks continue to target U.S. and Western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe. I applaud the authorities in the Philippines and the many U.S. agents, analysts and prosecutors who worked on this important case."
"This new indictment shows that we have no tolerance for those who try to traffic in commodities that can be used to support Iran's nuclear program," said U.S. Attorney Ronald C. Machen Jr. "It also underscores our commitment to aggressively enforcing export laws."
Both defendants are charged with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) by conspiring with others to cause the export of U.S. goods to Iran without the required U.S. Treasury Department license; conspiracy to defraud the U. S.; two counts of smuggling; two counts of illegally exporting U.S. goods to Iran in violation of IEEPA; and conspiracy to commit money laundering.
Khaki, also known as "Martin," was arrested May 24 by Philippine authorities based on a U.S. provisional arrest request stemming from a March 2012 U.S. federal indictment. Khaki remains in Philippine custody and the United States intends to seek his extradition to stand trial in the District of Columbia. Yi, who also goes by "Yi Cheng," "Kohler," and "Kohler Yi," is purported to be the managing director of Monalila Co. LTD, a company in Guangzhou City, China, and remains at large.
The defendants face a maximum potential sentence of 20 years in prison for conspiring to violate IEEPA, five years in prison for conspiring to defraud the United States, 10 years in prison for each smuggling count, 20 years in prison for each IEEPA count and 20 years in prison for conspiracy to commit money laundering.
The investigation was led by HSI Seattle with assistance provided by HSI Attaché Manila; authorities in the Philippines; and the U.S. Department of Justice's Criminal Division Office of International Affairs. The prosecution is being handled by the U.S. Attorney's Office for the District of Columbia and the Counterespionage Section of the Justice Department's National Security Division.
An indictment only contains allegations of a crime, defendants are presumed innocent unless and until proven guilty in a court of law.
Through its counter proliferation investigations, HSI aims to prevent terrorist groups and hostile nations from illegally obtaining U.S. military products and sensitive technology, including weapons of mass destruction. HSI oversees a broad range of investigations related to export law violations. It enforces U.S. export laws involving military items and controlled dual-use goods, as well as products going to sanctioned or embargoed countries.