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Michael Rose

Michael Rose

Bank Mellat

Bank Mellat

The president of a New York-based cosmetics company was charged by federal prosecutors in a three-count indictment for facilitating USD 350,000 in sales of nail polish to an Iranian importer in violation of U.S. sanctions.

Michael Rose, president of the Forsythe Cosmetic Group, was arrested Tuesday, pleaded not guilty, and released on USD 100,000 bond and other restrictions, according to the court docket.

Forsythe Cosmetic, founded in 1979 by Rose’s parents Buddy and Harriet Rose, offers more than 250 shades of nail polish under the Color Club brand, according to its website and a profile published by Nails Magazine. The company also sells kits, nail art and other cosmetics.

Rose had signed a contract in 2015 with the Iranian importer establishing that its company would be the exclusive distributor of Forsythe Cosmetic’s products in Iran, according to prosecutors. He also filed false information to the U.S. Commerce Department about the cosmetics, saying the consignee for the nail polish was in the UAE, not in Iran, and had lowered the purchase price for the goods to evade customs payments, prosecutors said.

“Whatever his motivation – greed or something more sinister – we allege Mr. Rose intentionally disguised his products’ ultimate destination and lied about those products’ prices to limit his customs liability,” said FBI Assistant Director William F. Sweeney Jr.

The Iranian importer, which isn’t named in the indictment unsealed Tuesday, used front companies based elsewhere to pay Forsythe Cosmetic in New York on its behalf and arrange for the nail polish to be transhipped via the United Arab Emirates, prosecutors said. The importer had transferred funds from Bank Mellat, a financial institution sanctioned by the U.S., to bank accounts controlled by a co-conspirator in the UAE who, in turn, made the payments to Forsythe Cosmetic through banks in New York and elsewhere, the indictment said.

Cosmetics firms have found themselves entangled in sanctions-related matters in the past. In 2012, Essie Cosmetics Ltd. and a corporate officer resolved a case with the U.S. Treasury Department and federal prosecutors that the company and the individual knowingly sold and exported about USD 33,000 worth of nail care products to an Iranian distributor.

e.l.f. Cosmetics Inc., which had paid a USD 1 million penalty in 2019 after sourcing materials for fake eyelashes from a Chinese factory with ties to North Korea, continued obtaining materials from factories with a North Korean nexus, Kharon reported in May 2020.

Source » kharon

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