Greenbelt, Maryland – U.S. District Judge Lydia K. Griggsby today sentenced Behrouz Mokhtari, age 72, of McLean, Virginia and Tehran, Iran, a native of Iran and a naturalized citizen of the United States, to 41 months in federal prison, followed by three years of supervised release, for violating U.S. sanctions against Iran by conspiring to engage in prohibited business activities on behalf of persons and entities in Iran. Judge Griggsby also ordered Mokhtari to forfeit approximately $2,862,598 in proceeds derived from his criminal activity as well as a residence he purchased in Campbell, California for over $1.5 million, using such proceeds. Mokhtari pleaded guilty earlier this year to two counts of conspiracy to violate the International Emergency Economics Power ACT (“IEEPA”).
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division; and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.
“This defendant knew that he was prohibited from engaging in business with Iran, but did so anyway and attempted to conceal his actions through his control of businesses and financial entities in Iran and the United Arab Emirates,” said United States Attorney Erek L. Barron. “Now, he will not only serve time in federal prison, he will forfeit cash and property purchased with his ill-gotten proceeds.”
According to his guilty plea, in one conspiracy that lasted from at least March 2018 until at least September 2020, Mokhtari agreed 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 Office of Foreign Assets Control (“OFAC”).
Mokhtari held management positions and/or maintained ownership control of multiple businesses 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 in violation of the Iranian sanctions. 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, was engaged in the petrochemical industry, and was part of the FSR Network.
As stated in his guilty plea, in a separate conspiracy that lasted from about February 2013 until at least June 2017, Mokhtari and a number of Iranian nationals agreed to conduct illicit shipments of petrochemical products to and from Iran, in violation of the Iranian sanctions and used the U.S. financial system to facilitate such shipments. In furtherance of the scheme, Mokhtari created a front company in Panama, East & West Shipping, Inc., to purchase two liquid petroleum gas (LPG) tanker vessels for approximately $38 million. These vessels were subsequently used 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 Vessel 1 and 2), Mokhtari transferred ownership of the vessels to other entities, in order to conceal the conspirators’ financial and ownership interest in the two vessels. The conspirators then used another entity, Greenline Shipholding, Inc., to control 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 Vessel 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 United States financial system to engage in transactions related to the hiring of 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 taken to conceal the fact that the vessels were transporting products to and from Iran, in order to evade the 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 held in the name of Mori Construction and Development, LLC (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 all of 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 $1,512,000.
Mokhtari admitted that he knew that, as a U.S. citizen, engaging in business with Iranian entities, without first obtaining a license or permission from OFAC is prohibited. He 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.
United States Attorney Erek L. Barron commended FBI for its work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Kathleen O. Gavin, who prosecuted the case, with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section.
Source » justice.gov