The U.S. Treasury Department has blacklisted hundreds of companies around… (Jacquelyn Martin, Associated…)
Los Angeles Times
WASHINGTON — When Susan Yip stood before a federal judge in San Antonio last month, she apologized tearfully for her role in smuggling American technology to Iran.
Yip, a Taiwanese businesswoman, was sentenced Oct. 24 to two years in prison after pleading guilty to obtaining or trying to obtain more than $2.6 million worth of parts and materials that could be used in nuclear weapons, missile guidance systems and radio jammers. The scheme involved 599 transactions with 63 U.S. companies.
Her case is the latest example of what U.S. officials describe as a worrisome trend: Asian companies and middlemen helping Iran illicitly obtain crucial components from American suppliers in violation of U.S. export controls and international sanctions.
U.S. prosecutors have brought eight such cases to court since 2010. They say other cases have not been made public because indictments are sealed or defendants are secretly cooperating.
"Our investigations in recent months have uncovered a growing number of networks illegally exporting restricted U.S.-origin technology, including munitions and materials with nuclear applications, to Iran, through front companies in China and Hong Kong," said Dean Boyd, a Justice Department spokesman.
The Treasury Department has blacklisted hundreds of companies and dozens of individuals around the world, limiting their ability to travel or do business with most banks, for allegedly helping Iran evade sanctions. The Justice Department focuses on prosecuting those who sell Iran military or nuclear technology purchased from U.S. companies.
In the past, Tehran relied on front companies in Malaysia and in the United Arab Emirates, experts say. Both governments have cracked down on the smuggling of technology with military applications amid growing international concern that Iran may be planning to build nuclear weapons. Businessmen from China, Taiwan, and Singapore have partly filled the void.
China and some other Asian countries "just don't enforce export controls and sanctions very well," said Andrea Stricker of the Institute for Science and International Security, a Washington think tank that tracks Iran's nuclear program.
In June, C. Frank Figliuzzi, then the FBI's counterintelligence chief, told Congress that the bureau's counterproliferation center had arrested "multiple subjects" on the CIA's Top 10 Proliferators List since July 2011. The FBI and CIA both refused to publicly divulge who was on the list.
The known arrests show Iran's growing efforts to evade sanctions.
In July, a federal grand jury in Washington, D.C., indicted Zongcheng Yi, a Chinese citizen, and Parviz Khaki, an Iranian, for allegedly trying to illegally export to Iran materials for gas centrifuges used to enrich uranium for nuclear fuel.
Posing as a toy maker in China, Yi tried to order 20 tons of maraging steel, which is used in centrifuges, from U.S. companies. He also tried to buy special measuring instruments, mass spectrometers, lathes, radionuclides and nickel alloy wire — all important for Iran's nuclear program, according to court documents.
A U.S. investigator posed as an illegal exporter and set a trap. Khaki was arrested in the Philippines in June and is fighting extradition to the United States. Yi remains at large.
In October 2011, the Justice Department charged four Singapore residents who did business in Hong Kong on allegations of exporting 6,000 radio frequency modules from an unnamed Minnesota company to front companies in East Asia before rerouting the shipments to Iran. The four were identified as Wong Yuh Lan, Lim Yong Nam, Lim Kow Seng and Benson Hia.
Sixteen of the modules were later recovered in remote detonation devices for unexploded roadside bombs in Iraq, according to the indictment. Benson Hia and Lim Kow Seng were arrested in Singapore and are fighting extradition. A Singapore court released the other two.
In August 2010, Yi-Lan Chen of Taiwan was sentenced to 42 months in prison after pleading guilty in Florida to illegally exporting dual-use products for Iran's missile program. Authorities say Iranian missile experts gave Chen a shopping list, and he told his U.S. suppliers that the dual-use goods were destined for Hong Kong.
"As you know we cannot tell USA this connector is for you," he wrote in an email to an Iranian contact, according to court records. "So we have to tell a white lie to USA that this is for our factory in Hong Kong."
Yip, 35, who cooperated with U.S. prosecutors in exchange for a reduced sentence, operated trading companies in Taiwan and Hong Kong. An Iranian partner, Mehrdad Foomanie, told her what to buy in the United States, according to her indictment.
The list included a PIN diode limiter, useful for electronic warfare, from a company in Santa Clara, and dielectric resonator oscillators, useful for satellites, from a company in Camarillo, according to the indictment. The indictment does not identify the companies.
Yip shipped the goods through another partner in Dubai, ostensibly to customers in Taiwan or Hong Kong. He instead forwarded the shipments to Foomanie in Iran.
"Basically, concerning [the fact that] USA could not sell anything to Iran, I told a lie to USA vendor," Yip wrote to Foomanie in broken English. "So I hope you can be clever and don't say anything about our destination."
In March 2008, Yip emailed Foomanie again. "What you ordered from me are mostly dangerous parts, I always purchase them for you and never got in trouble!!"
In May, investigators lured Yip to a U.S. jurisdiction and arrested her. They won't say how. Her partners remain at large.
"We may want to use that technique again," said a senior law enforcement official not authorized to speak publicly.