Defendant Engaged in Two Separate Schemes to Do Business with Iran Without Obtaining the Necessary Licenses or Permission
Behrouz Mokhtari, 72, of McLean, Virginia, and Tehran, Iran, a naturalized U.S. citizen, pleaded guilty today to two separate conspiracies to violate sanctions imposed by the United States on Iran regarding the exportation, re-exportation, sale, or supply, directly or indirectly, of any goods, technology, or services to Iran.
According to his guilty plea, from at least March 2018 until at least September 2020, Mokhtari conspired with his co-defendant and others to evade Iranian sanctions by engaging in business activities on behalf of Iranian entities without first obtaining the required licenses from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
Mokhtari held management positions and/or maintained ownership control of multiple business in Iran and the United Arab Emirates (UAE), referred to collectively as “the FSR Network.” Mokhtari and his co-conspirators used the FSR Network to provide services to Iranian entities and engage in transactions involving Iranian petrochemical products, including refining petrochemical products and transporting them by sea. Mokhtari and his co-conspirators used bank accounts located in the UAE, including Bitubiz FZE, which was part of the FSR Network and over which Mokhtari exercised partial or complete control, to process these U.S. dollar transactions.
Mokhtari admitted that Bitubiz operated as a conduit for the FSR Network to conceal the fact that Mokhtari and his co-conspirators were engaging in financial transactions with, and providing services to, Iranian entities. Bitubiz maintained daily ledgers which recorded the receipt and transfers of funds. After receiving an incoming wire transfer, Bitubiz would credit most of that amount to Ayegh Isfahan Manufacturing Company (AIM). Mokhtari and others held ownership interests in AIM, which was located in Iran, engaged in the petrochemical industry, and part of the FSR Network.
As stated in his guilty plea, from about February 2013 until at least June 2017, Mokhtari and several Iranian nationals engaged in a separate conspiracy to support illicit shipments of petrochemical products to and from Iran in violation of the Iranian sanctions. In furtherance of the scheme, Mokhtari created a Panama-based front company, East & West Shipping Inc., to purchase two liquid petroleum gas (LPG) tanker vessels to transport Iranian petrochemical products in international commerce on behalf of, and to benefit, Iranian entities associated with the Government of Iran.
After using East & West to purchase the two vessels (LPG Vessels 1 and 2), Mokhtari transferred ownership of the vessels to other entities to conceal the conspirators’ financial and ownership interest. The conspirators then used another entity, Greenline Shipholding Inc., to control the operations of LPG Vessels 1 and 2. For example, through email communications from Greenline email accounts, or email accounts containing some variation of the Greenline name, the conspirators directed Company 5, a ship management company, to oversee the leasing and operation of LPG Vessels 1 and 2 to transport Iranian petrochemical products from Iranian ports to other locations and to participate in ship-to-ship transfers of Iranian products while on the high seas.
The conspirators, including Mokhtari, used the U.S. financial system to engage in transactions related to the vessels and other expenses. In addition, Mokhtari and his co-conspirators frequently communicated by email about the nature and source of the products that the vessels were transporting, as well as the use of false shipping documents and other measures to conceal the fact that the vessels were transporting products to and from Iran in violation of Iranian sanctions.
At some point prior to May 2017, ownership of LPG Vessel 1 was transferred to Russell Shipping Inc., which was owned by Mokhtari. On May 30, 2017, Mokhtari sold LPG Vessel 1 to be scrapped for more than $3.1 million. Mokhtari received a total of $2,862,591.12 from that sale. The purchaser wired funds to accounts at two separate banks – one held in the name of Mori Construction and Development LLC and the other held in the name of Mori Construction. Mokhtari was the sole owner of Mori Construction and controlled both bank accounts. Through a series of inter-account transfers and check payments, by September 2017, the proceeds from the sale of LPG Vessel 1 were located in a third account, over which Mokhtari and his daughter had signature authority. In March 2018, Mokhtari used those proceeds to purchase a home in Campbell, California, for over $1.5 million.
Mokhtari admitted that he knew that, as a U.S. citizen, he was prohibited from engaging in business with or providing services to Iranian entities without first obtaining a license or permission from OFAC to do so. Neither Mokhtari nor any of his co-conspirators ever applied for or obtained such a license. Mokhtari further knew that it was illegal to engage in transactions intended to evade Iranian sanctions or to engage in transactions related to goods and services of Iranian origin or export.
As part of his guilty plea, Mokhtari must forfeit money, property and assets derived from, obtained as the result of, or used to facilitate the commission of his illegal activities, including the residence he purchased in Campbell, California, and a money judgment in the amount of $2,862,598.12.
Mokhtari faces a maximum sentence of five years in federal prison for each of the two conspiracy counts. U.S. District Judge George J. Hazel scheduled sentencing for April 3.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Erek L. Barron for the District of Maryland, Assistant Director Alan E. Kohler Jr. of the FBI Counterintelligence Division and Special Agent in Charge Thomas J. Sobocinski of the FBI Baltimore Field Office made the announcement.
The FBI investigated the case.
Assistant U.S. Attorney Kathleen O. Gavin for the District of Maryland prosecuted the case, with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section.