On March 21, 2019, 57-year-old Australian national David Russell Levick was sentenced to 24 months in prison after pleading guilty to procuring and attempting to procure U.S.-origin aircraft parts for transshipment to Iran without a license. Levick’s sentencing comes over seven years after he and his Thornleigh, Australia-based company, ICM Components Inc., were indicted for conspiring to defraud the United States and for violating the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act.
Australia arrested Levick and extradited him to the United States in December 2018, and he entered into a plea agreement on February 1, 2019. As part of the plea agreement, Levick must also forfeit nearly $200,000, which is the total value of the goods involved in the shipments. Levick will be deported after completing his prison sentence. His company, ICM, was dissolved in September 2014.
Levick’s case is an early illustration of Iran’s reliance on intermediaries and transshippers in Malaysia to procure U.S.-origin goods, particularly after export control laws were tightened in the United Arab Emirates in 2007. Later instances include the conspiracy involving Malaysia-based Greenwave Telecommunication and Iranian nationals Alireza Jalali and Negar Ghodskani, and the scheme involving Iranian national Saaed Valadbaigi and NBH Industries SDN BHD, his Malaysia-based front company.
The Scheme
Between 2007 and 2008, Levick procured aircraft parts and other goods on behalf of an Iranian national, referred to in the indictment as “Iranian A,” and his Tehran-based trading company. According to media reports, Iranian A is Hossein Ali Khoshnevisrad and his company is Ariasa, AG. Khoshnevisrad and Ariasa were charged in 2009 with illegally exporting U.S.-origin helicopter engines to Iran Aircraft Manufacturing Industries (IAMI). He pleaded guilty and was sentenced to 15 months in prison in 2010. IAMI (a.k.a. HESA) is controlled by the Ministry of Defense and Armed Forces Logistics (MODAFL) and supports the Islamic Revolutionary Guard Corps (IRGC). It has been sanctioned by the European Union, the United States, and a number of other governments for supporting proliferation, including through the maintenance and manufacturing of military aircraft, unmanned aerial vehicles, and military logistics systems.
The shipments organized by Levick followed roughly the same pattern. Khoshnevisrad would transmit an order request to Levick who would in turn place an order for the specified goods, either directly from the U.S.-based manufacturer or via a broker based in Tarpon Springs, Florida. The goods would then be shipped to ICM, Levick’s company in Australia, before being sent on to a company in Malaysia used by Khoshnevisrad. This company is reportedly Skylife Worldwide Sdn Bhd, which is directed by Khoshnevisrad. A Malaysian freight forwarder working on behalf of Khoshnevisrad would then ship the goods to Iran. In all the shipments, Levick intentionally concealed the end user from the manufacturers, shippers, and broker, often falsely listing Australian companies as the end users of the goods. In one instance, Khoshnevisrad instructed Levick to name an Armenian national as the end user.
Khoshnevisrad initially sent payment for the goods directly from his Iranian bank account to bank accounts in Australia controlled by Levick and ICM. However, in March 2008, following additional banking restrictions placed on Iran, Khoshnevisrad and Levick agreed to send payment through Malaysia.
The Goods
Levick procured or attempted to procure the following items on behalf of Khoshnevisrad:
– VG-34 Series Miniature Vertical Gyroscopes from a Minnesota-based company and its Wisconsin-based distributor, through the broker in Florida. These gyroscopes can be used to control the pitch and roll of missiles, torpedoes, and helicopters and are designated as defense articles on the U.S. Munitions List (Category VIII(e)). They require a license to be exported. Khoshnevisrad asked an Armenian national to contact Levick and serve as the false end user for the gyroscopes, following the manufacturer’s request for end-user information and an export license.
– K2000 Series Servo Actuators from a North Carolina-based company through the broker in Florida. The servo actuators can be used for aircraft steering and flight control purposes and are designated as defense articles on the U.S. Munitions List (Category VIII(h)). They require a license to be exported.
– Precision Pressure Transducers from a Minnesota-based company through its Australia-based distributor. The pressure transducers can be used for altitude and barometric pressure measurements. They require a license to be exported to Iran.
– Shock Mounted Light Assemblies from a New York-based company through the broker in Florida. The light assemblies are designed for high vibration use, including on helicopters and other aircraft. They require a license to be exported to Iran. Following their delivery, Khoshnevisrad told Levick that the wrong parts had been sent. They were subsequently returned by the Iranian end user via air freight to Levick. New light assemblies were then ordered and sent to Levick.
– Emergency Floatation System Kit from a Florida-based company through the broker in Florida. The kit was seized by U.S. Customs and Border Protection prior to leaving the United States. It is designed for use in helicopters landing in water or soft desert terrain and requires a license to be exported to Iran.
According to the indictment, the pressure transducers and light assemblies were successfully procured and transshipped to Iran, while the gyroscopes, actuators, and floatation kits were never sent to Iran.
Conclusion: Back to the future
While these transfers and attempted transfers took place some time ago, they illustrate several hallmarks of illicit Iranian procurement that continue today: First, the reliance on transshipment through high-traffic jurisdictions that both serve as reasonable end-use destinations for sensitive items and have comparatively lax export control systems; second, the willingness to seek items below the technical control level, in an effort to avoid the export licensing process and the red flags that this process might raise with manufacturers; finally, the role of unscrupulous brokers like Levick in helping Iran obtain U.S.-origin technology that it would not otherwise be able to acquire.
Source » iranwatch