February 5, 2010 - David Kris, Assistant Attorney General for National Security, Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida, Michael Johnson, Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement, Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations, and James M. Foster, Special Agent in Charge, U.S. Department of State, Diplomatic Security Service, announced that defendant Yi-Lan Chen, aka "Kevin Chen," 40, a Taiwan passport holder, was arrested on Feb. 3, 2010, on charges of illegally exporting commodities for Iran’s missile program.
More specifically, the complaint charges defendant Chen with exporting and attempting to export U.S. commodities to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and the United States Iran Embargo (the Embargo). The Embargo prohibits the exportation from the United States to Iran of any goods, technology, or services, with limited exceptions, unless authorized by the Department of Treasury, Office of Foreign Assets Controls (OFAC). The Embargo is enforced through the IEEPA. According to the affidavit filed in support of the criminal complaint, Chen facilitated the purchase and export of various dual use goods from the U.S. to Iran by way of Taiwan and Hong Kong. "Dual use" goods are goods and technologies that have commercial application, but also could make a significant contribution to the military or nuclear potential of other nations and could be detrimental to the foreign policy or national security of the United States.
U.S. Attorney Jeffrey H. Sloman stated, "Keeping our nation safe is the number one priority of the Department of Justice. To that end, we will vigorously investigate and prosecute individuals who export items to prohibited entities such as the Islamic Republic of Iran. Iran has been designated a state sponsor of terrorism and remains subject to United States, United Nations and European Union economic sanctions and export controls because of its continued involvement in terrorism and its nuclear weapons ambitions. The dual use items allegedly exported in this case could easily be used in missile development and other military components. Such conduct poses a serious threat to our national security, and will not be tolerated."
"Today's arrest is the result of ongoing cooperation between government agencies to combat the illegal transshipment of U.S.-origin items to Iran," said Michael Johnson, Special Agent in Charge, U.S. Department of Commerce's Miami Office of Export Enforcement. "We will continue to work together to pursue willful violators no matter where they set up their networks and protect our national security."
"This investigation is another fine example of how effective these law enforcement partnerships can be at ensuring that the sale and distribution of dual-use technology is done lawfully," said Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations in Miami. "This case will send a message to those individuals who attempt to profit by illegally supplying improper dual-use technology to other countries. ICE will continue to aggressively pursue those who violate U.S. export laws."
The complaint alleges that Chen caused dual use goods to be exported from the U.S., including P200 Turbine Engines and spare parts, MIL-S-8516 Sealing Compound, Glass to Metal Pin Seals, and Circular Hermetic Connectors (Model MIL-C-81703). P200 Turbine Engines are designed for use as model airplane engines but can also be used to operate unmanned aerial vehicles and military target drones. MIL-S-8516 Sealing Compound is an accelerated, synthetic, rubber sealing compound used for sealing low-voltage electrical connectors, wiring and other electrical equipment against moisture and corrosion. This particular sealant is designed to military specifications and has numerous applications in military, aerospace, and automotive industries. It is also considered a hazardous material for shipping purposes.
Glass to Metal Pin Seals are commonly used to seal a conductor pin in a metal feed thru in an electrical device. These have many applications, such as vacuum components, sensor or transducer housings, feedthroughs for harsh environments and battery headers. The pin seals exported by Chen were designed with the nickel alloy known as "Alloy 52" and have dual applications in aerospace industries, thermal imaging devices, chemical agent monitors, and weapons systems. Circular Hermetic Connectors are designed to facilitate the flow of electrical current across two devices and can be mechanically coupled to, or uncoupled from, another connection. These connectors are designed to military specifications and have aerospace, defense, industrial and petrochemical applications.
As alleged in the complaint affidavit, federal agents learned of Chen’s efforts to obtain and export U.S. goods and commodities after Chen attempted to export detonators through a California company using unsatisfactory information in documents regarding Chen’s ultimate customers. The investigation revealed that Chen’s ultimate customers for the dual use exports listed in the complaint are all in Iran.
The investigation also revealed that Chen’s customers included buyers for Electro SANAM Industries. According to www.iranwatch.org, part of the Wisconsin Project on Nuclear Arms Control, Electro SANAM Industries is a known front company for Aerospace Industries Organization ("AIO") in Iran and has been linked to Iranian ballistic missile programs. AIO conducts research and development on ballistic missiles and is a leading industrial and military subsidiary of the Ministry of Defense and the Ministry of the Armed Forces Logistics of Iran. In addition, Electro SANAM Company is listed in annex IV of U.N Security Council Resolution 1803, dated March 3, 2008, for links to nuclear proliferation activities.
The complaint also alleges that another customer for receipt of the dual goods listed in the complaint is the owner of the Noavaran Sooyab Sanat Co. in Tehran, Iran. Sooyab Sanat Co. was founded in 1989 as an instrumentation division of Jahad Engineering Research Center. Jahad Engineering Research Center is one of many names used by the Engineering Research Center for the Construction Crusade (Jihad-e Sazandegi), located in Tehran, Iran, which has been linked to chemical research and development facilities. According to www.iranwatch.org, part of the Wisconsin Project on Nuclear Arms Control, in 2006, Jahad Engineering Research Center has been listed as an entity of concern by the British government regarding the procurement of weapons of mass destruction.
According to the complaint affidavit, customers in Iran sent orders by e-mail to Chen for specific U.S.-manufactured goods. Chen then requested quotes, usually by e-mail, from U.S. businesses and made arrangements for the sale and shipment of the goods to one of several freight forwarders in Hong Kong and Taiwan. Once in Hong Kong or Taiwan, the goods were then shipped to Iran.
If convicted, Chen faces a statutory maximum sentence of up to 20 years in prison, and possible fines of up to $1 million. Chen was arrested in Guam on the outstanding arrest warrant from the Southern District of Florida. This morning, Chen appeared before a Magistrate Judge in Guam for his initial appearance. At the initial appearance, Chen waived removal, was taken into custody and was ordered to appear in the Southern District of Florida. No date has been set for Chen’s first appearance in the Southern District of Florida.
Mr. Sloman commended the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of State, Diplomatic Security Service, for their work on this investigation. Mr. Sloman also thanked the Office of Foreign Assets Control (OFAC) for their assistance in this matter. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.
A complaint is only an accusation, and a defendant is presumed innocent unless and until proven guilty.