Iranian National and U.S. Citizen Plead Guilty to Iran Sanctions Violations

Yesterday, two individuals, Hamid Asefi and Behzad (Tony) Karimian pleaded guilty to violations of the Iranian Transactions and Sanctions Regulations (ITSR) as promulgated pursuant to the International Emergency Economic Powers Act (IEEPA). The charges stem from their involvement in the unlawful export of aircraft and aircraft parts from the United States to Iran without a license from the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). Asefi, 68, is a citizen and resident of Iran, while his co-defendant, Karimian, is a U.S. citizen living in Louisville, Kentucky. Karimian holds a valid Iranian passport and is a pilot for Mesaba Airlines. The indictments were returned on August 2nd of this year and were unsealed yesterday prior to the hearing. At this time a search of the PACER database shows that the court documents have not yet been uploaded for public viewing.

Asefi is the principal officer of Aster Corp Ltd., an Iranian company with offices in both Iran and the United Kingdom. According to the indictment, Asefi utilized the U.K. office of his company to serve as a transshipment point for the shipment of goods from the United States to Iran and that the company was used to facilitate the shipment of goods from the United States to Iran through third party countries. The requests for aircraft and aircraft parts from Iranian entities were routed through Asefi to Karimian. Once receiving the requests, Karimian made inquiries, placed orders, and attempted to facilitate the purchase of aircraft and aircraft parts located in the United States and owned by U.S. persons on behalf of Asefi and persons in Iran.

IEEPA prosecutions require the defendants to be aware of the law and to have willfully violated it. This is often a difficult standard for the prosecution to overcome, however, Asefi and Karimian made it easy through several email exchanges where Asefi informed Karimian of a “profitable business collaboration” and which outlined the terms of delivery and payment on future transactions with Iran Air stating “…remember that, only U.S. Embargo has brought this chance and benefit to us, to get involved in these deals….” That language sank any chance of a defense on IEEPA’s scienter requirement for criminal liability.

Asefi and Karimian sought to obtain and export to Iran a G.E. Aircraft Engine Model CF6-50C2, as well as helicopters manufactured by Bell Helicopter without first having obtained the required authorizations from OFAC. According to the Federal Bureau of Investigation (FBI), all of the aircraft and aircraft parts involved in this case were intended for civilian use. While there is a positive licensing policy in favor of licensing aircraft parts for the safety of U.S. origin civilian aircraft, in this case it is certain that OFAC would have denied any license request. First, despite this positive licensing policy, it is rumored that parties applying for these licenses have been denied or OFAC has failed to respond. I cannot confirm whether or not this is 100% accurate but that’s what I have heard. More important, however, is that these exports were destined for Iran Air, an entity designated under Executive Order 13382 as Proliferator of Weapons of Mass Destruction. That designation renders Iran Air ineligible to be a party to a licensed transaction for receipt of U.S. origin aircraft parts under the policy referred to above.

Sentencing for Asefi and Karimian is scheduled before Chief District Judge Joseph H. McKinley, Jr. on March 4, 2013 at 2 p.m. in Louisville.

Iran is apparently desperate for aircraft parts and helicopters. A number of the IEEPA prosecutions for Iran sanctions violations revolve around the unlawful export of aircraft and helicopter parts to Iran. There have been at least four (4) such cases that I can think of over the last year or so. Indeed, just a few weeks ago 28 year old Alireza Goudarzi was charged with IEEPA charges arising from Iran sanctions violations for attempting to export aircraft parts.

Some critics of sanctions have stated that the inability to export aircraft parts to Iran endangers the safety of innocent Iranians and is therefore a humanitarian issue. The U.S. government has countered that if the safety of innocent Iranians is being endangered then the responsibility falls upon those Iranian carriers flying unsafe planes. One possible “easing of sanctions” the U.S. could offer Iran in future negotiations over Iran’s disputed nuclear program would be to generally license the export of certain aircraft parts necessary for the safety of civilian aircraft or at least the guarantee that specific license applications will be processed and granted in a fair and expeditious manner. This would give Iran the parts it seeks while alleviating some of the dangers for Iranians flying on Iranian commercial flights. However, given the current political climate in Washington towards Iran, that offer may be a stretch.