The Department of Justice has unsealed an indictment charging two men – Iranian National Hossein Hatefi Ardakani (“Ardakani”) and Chinese National Gary Lam – with crimes related to the procurement of U.S.-manufactured dual-use microelectronics for Iran.
Concurrent with this unsealing, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Ardakani and Lam, also identified by OFAC as Lin Jinghe, as well as two other individuals and 10 entities involved in the procurement network used by Ardakani in support of the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization’s one-way attack unmanned aerial vehicle (“UAV” or drone) program.
The indictment alleges that between at least September 2014 and September 2015, Ardakani and Lam, who was based in China and Hong Kong, as well as other associates, conspired to illegally purchase and export from the United States to Iran dual-use microelectronics that are commonly used in UAV production, including high electron mobility transistors (HEMTs), monolithic microwave integrated circuit (MMIC) power amplifiers, and analog-to-digital converters. Each of these components is subject to U.S. export controls for anti-terrorism, national security, and regional stability reasons.
“Today’s announcements show that we remain focused on disrupting the efforts of Iran and its agents to circumvent U.S. sanctions in support of Iran’s weapons programs, including its drone program, which have been used to support and supply terrorist organizations and other foreign adversaries – such as Russia – around the globe,” said U.S. Attorney Matthew M. Graves. “This whole-of-government approach is one more step in stopping the acquisition of drones for nefarious purposes such as attacks on innocent civilians and civilian infrastructure.”
“Today’s coordinated action with the Treasury Department demonstrates the Justice Department’s commitment to keeping military-grade equipment out of the hands of the Iranian regime,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “We will aggressively investigate, disrupt, and hold accountable criminal networks that supply sensitive technology to hostile and repressive governments in contravention of U.S. sanctions.”
“U.S. technology has zero place in Iranian UAVs,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod for the Department of Commerce. “As these allegations demonstrate, those who procure dual-use microelectronics for the Islamic Revolutionary Guard Corps will be held accountable.”
“Ardakani and his co-conspirators crafted a sophisticated web of front companies to obscure the illicit acquisition of U.S. and foreign technology to procure components for deadly UAVs,” said Special Agent in Charge Michael J. Krol, of Homeland Security Investigations’ New England Office. “These very components have been found in use by Iran’s allies in current conflicts, including in Ukraine. The disruption of these criminal networks by Homeland Security Investigations means that hundreds of thousands of critical UAV components will never again be used for malign purposes.”
The indictment further alleges that on four separate occasions Ardakani and his co-conspirators used a web of foreign companies to accomplish their obfuscation and evasion efforts. For example, between June and September 2015, Ardakani and Lam caused an unwitting French company to purchase from a U.S. company several pieces of analog-to-digital converters with applications in wireless and broadband communications, radar and satellite subsystems, multicarrier, multimodal cellular receivers, antenna array positioning, and infrared imaging. Lam then caused a division of the French company to ship the analog-to-digital converters to Hong Kong, where they were re-exported to Iran. A variation of this tactic – involving witting and unwitting companies in Canada, Hong Kong, and China – was used on the other three occasions.
In addition to the indictment, a separate seizure action targeting Nava Hobbies SDN BHD (“Nava Hobbies”) and its property was unsealed today. Nava Hobbies is one of the 10 entities designated by OFAC in its action announced today. The funds are subject to seizure based on violations of U.S. law, including U.S. economic sanctions targeting Iran and money laundering violations. The seizures, totaling nearly $600,000, aim to further degrade this network’s ability to procure UAV components. Proceedings involving this property remain ongoing.
This case is being investigated by Homeland Security Investigations (HSI), the Department of Commerce, Bureau of Industry and Security (BIS), and the Defense Criminal Investigative Service (DCIS).
The case is being prosecuted by Assistant U.S. Attorney Jolie Zimmerman of the U.S. Attorney’s Office for the District of Columbia, with valuable assistance from Assistant U.S. Attorney Sean Heiden of the U.S. Attorney’s Office for the District of Columbia and Trial Attorneys Heather Schmidt and Brendan Geary of the Counterespionage and Export Control Section of the Justice Department’s National Security Division.
An indictment is merely an allegation.
Source: Department of Justice