Pa. firm charged with export violation
A Pennsylvania company and its chief executive officer were charged by the U.S. Justice Department on Wednesday for allegedly conspiring to evade export reporting requirements and attempting to smuggle a lathe machine into Iran.
Charged were Hetran Inc., an engineering and manufacturing plant in Orwigsburg, Pa., and its chief executive officer, Helmut Oertmann. At the same time, an indictment was unsealed that had previously been voted by a federal grand jury in Harrisburg in December 2012 against three Iranians and two Iranian firms connected with the criminal scheme: Mujahid Ali, Khosrow Kasraei, Reza Ghoreishi, FIMCO FZE and Crescent International Trade and Services FZE.
Also charged was Suniel Malhotra, an Indian national, who is an overseas sales representative for Hetran.
According to U.S. Attorney Peter Smith, Hetran allegedly manufactured a horizontal lathe, also described as a bar peeling machine (peeler), valued at more than $800,000 and weighing in excess of 50,000 pounds. A horizontal lathe, or peeling machine, is used in the production of high-grade steel or bright steel in the manufacture of automobile and aircraft parts.
On or about June 2009, Hetran was allegedly contacted by representatives of FIMCO, an Iranian company with offices in Iran and the United Arab Emirates, and Crescent International, an affiliated company based in Dubai in the United Arab Emirates. FIMCO allegedly wanted to purchase the peeler. During negotiations, it became apparent that the peeler was intended for shipment to Iran.
American companies are forbidden to ship “dual use” items to Iran without first obtaining a license from the U.S. Commerce Department.
“Aware that it was unlikely that such a license would be granted, Hetran, Helmut Oertmann and other co-conspirators agreed to falsely state on the shipping documents that the end-user of the peeler was Crescent International in Dubai,” the Justice Department said.
“On June 17, 2012, Hetran allegedly caused the peeling machine to be shipped to Dubai in the United Arab Emirates, fraudulently listing Crescent International in Dubai as the end-user, knowing that the shipment was ultimately being sent to Iran in violation of federal law,” the department added.
Based on the charges, Hetran is subject to a sentence of up to $1 million, while Oertmann faces up to 10 years in jail, a fine of up to $250,000 and up to five years supervised release. The Iranian and Indian defendants are charged with conspiring to violate and with attempting to violate the export laws of the United States, each carrying potential penalties of up to 10 years in prison, a fine of up to $250,000 and up to five years supervised release for the individual defendants and a $1-million fine for each corporate defendant.
The case was investigated by the Commerce Department’s Office of Export Enforcement. The prosecution is being coordinated by Assistant U.S. Attorney Christy Fawcett and Senior Litigation Counsel Gordon Zubrod and overseen by the Justice Department’s National Security Division.