Throwing the Book at Tehran

By Michael Jacobson

On April 7, 2009, the U.S. Treasury Department designated as a proliferator Li Fangwei, the commercial manager for the Chinese company Limmt, for providing support for Iran's missile program. Treasury also blacklisted eight aliases of Limmt, which was originally designated in 2006, in addition to six other Iranian entities. The same day, the Manhattan district attorney's office, acting in coordination with Treasury, unsealed a 118-count indictment against Li and his company for attempting to conceal transactions that transited the U.S. financial system. While the Treasury action was hardly surprising -- given the number of Iran-related designations over the past several years -- the role of other law enforcement agencies in the Iran effort is a fairly recent trend, one that the Obama administration should encourage as negotiations with Tehran move forward.

Law Enforcement Actions

In announcing the indictment, Manhattan district attorney (DA) Robert Morgenthau made clear that his office was becoming actively involved in the broader effort against Iran, noting that he would "make every effort to prosecute [Limmt], which is perhaps the largest supplier of weapons of mass destruction to the Iranian government." Morgenthau added that one of the purposes of the action was to "let people know that the Iranians are deadly serious about acquiring materials for long-range missiles and for atom bombs." Like Treasury, Morgenthau emphasized that the Iranians are attempting to acquire this technology through deceptive conduct -- in this case, through Limmt's aggressive use of front companies to hide the blacklisted company's involvement in the transaction.

This was not Morgenthau's first strike against Iran's illicit activities. In January, the Manhattan DA's office was part of a settlement agreement reached with the Justice Department regarding the violation of U.S. sanctions laws by British bank Lloyds TSB. Lloyds acknowledged that from 1995 to 2007, it had falsified information on wire transfers involving sanctioned countries, such as Iran, so transactions could pass through the U.S. financial system unnoticed. Under the agreement, Lloyds admitted responsibility for the criminal conduct and paid $350 million, split evenly between New York county and the federal government.

U.S. federal law enforcement agencies have also been stepping up efforts over the past year. On April 3, Baktash Fattahi, an Iranian national residing in the United States, was indicted for attempting to export restricted military aircraft parts to Iran. Ten others were also charged, including a number of Iranian businessmen operating out of Dubai. The investigation was a team effort involving agents from various agencies, including Immigration and Customs Enforcement, and the Departments of Defense, Commerce, and State.

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