When It Comes To National Security, We’re Not In Kansas Anymore:
The Case of United States v. Michael Todd et al.
by Michael J. Moore
United States Attorney for the Middle District of Georgia
The Middle District of Georgia covers 70 of Georgia’s 159 counties. It is a sprawling district, draping like a sash across the state from the South Carolina line to the Alabama and Florida borders. The district, while it includes the University of Georgia, Robins Air Force Base, and Fort Benning, is primarily rural with a people who are at times short on changing things too quickly, but always long on hospitality. It is certainly not a place where you would expect to find local folks selling military parts to Iran. But Michael Todd had different ideas.
Michael Edward Todd was the owner of The Parts Guys, LLC, a small company based in Port Orange, Florida, with warehouse space at the Middle Georgia Municipal Airport in Macon, Georgia. As the name suggests, the company supplied aircraft parts, and Todd worked in the aircraft maintenance field. During an unrelated investigation, law enforcement agents learned that Todd had been in contact, and ultimately developed business relationships, with two people of interest. The first was Hamid Seifi, also known as “Hank Seifi,” an Iranian-born U.S. national and president of Galaxy Aviation Services, a company in St. Charles, Illinois. The other was Syed Amir Ahmed Najfi, an Iranian national and purchaser for Aletra General Trading, a Dubai company doing business as Erman & Sultan Trading Company.
In the fall of 2008, Todd and Najfi communicated by email about new protocols for the international shipping of aircraft parts. The conversations made clear that Todd knew of the special licensing and information gathering requirements by the United States government. This included knowledge that he must reveal to the Commerce Department that the requested parts were to be shipped through a third party, with the ultimate end user being the Iran Aircraft Industry, the supplier of aircraft parts to Iranian military components including the Iranian Revolutionary Guard. The required licenses were not obtained and the shipment of parts by Todd to Najfi, and ultimately to the Iranian military, continued with all parties taking extraordinary efforts to conceal both the nature of the parts being shipped and the ultimate end user.
To carry out this scheme, in the Spring of 2009, Hassan Seifi, owner of the Iranian company, Sabanican, contacted Luc Teuly, a representative of the French trading company Aerotechnic, requesting a shipment of parts for military aircraft and helicopter engines. The billing and shipping address was located in Tehran, Iran. Documents revealed an agreement between the French and Iranian companies providing for an increased commission for arranging the shipment of these parts from The Parts Guys, through Aerotechnic, to Sabanican, and ultimately to the Iranian military. In addition, Hank Seifi and his Illinois company would place orders and purchase parts from Todd and his company in Georgia, while acting as a straw man for Hassan Seifi, Reza Seifi, and their company in Iran.
A total of seven individuals and five corporate entities based in the United States, France, the United Arab Emirates (U.A.E.), and Iran were indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military parts for fighter jets and attack helicopters from the United States to Iran. In a superseding indictment, eight of the defendants were charged with conspiring to violate the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), and the Iranian Transactions Regulations, in addition to conspiracy to defraud the United States, false statement and money laundering violations.
The Iran trade embargo prohibits the sale or export of any goods, technology or services from the United States to Iran without prior authorization from the Treasury Department. This is true regardless of whether these goods or services are military or civilian in nature. While many of the technologies sought by Iran may appear harmless, they can pose significant threats. For example, electronic components with primarily civilian uses have been recovered from roadside bombs used against U.S. troops in Iraq.
The AECA governs the export of military items and munitions that have no civilian use, like fighter jet and attack helicopter parts, from the United States. Any export of munitions from the United States requires special licensing by the State Department. Not only are suppliers of military items and munitions located in this country subject to the export laws, individuals and companies located overseas are bound by our laws when they conduct business transactions in the United States by acquiring our goods and providing information about the destination of the shipments.
In furtherance of the Justice Department’s National Export Enforcement Initiative, and through the coordinated efforts of the Justice Department’s National Security Division, the Federal Bureau of Investigation, Immigration and Customs Enforcement, and the United States Attorney’s Office for the Middle District of Georgia, we were able to cut off more than a branch of this illegal supply tree; we cut it off at the trunk. In addition to the criminal violations, and as part of the United States government’s continuing pursuit of export law violations, the Commerce Department placed eight defendants in France, Iran, and the U.A.E. on the “Entity List.” Among other things, this listing provides public notice that certain exports, re-exports, and transfers to parties on the list require additional licensing from the Commerce Department.
Michael Todd and his company, The Parts Guys, have entered guilty pleas and are awaiting sentencing. Hank Seifi and his company, Galaxy Aviation, pled guilty in U.S. District Court. Seifi was sentenced to 56 months in prison followed by three years of supervised release, a fine of $12,500 and forfeiture of $153,950, while Galaxy Aviation, which is now defunct, received a $400 special assessment. Although the other defendants remain at large, extradition discussions are underway.
The illicit arms trade is a global problem and requires international cooperation if we are going to close off the multi-national avenues that exist for Iran and other state sponsors of terrorism to procure weapons technology. The United States Attorneys’ offices nationwide are working to dismantle these networks and prevent U.S. technologies from ending up in the hands of unfriendly governments. These parts and technologies have a military purpose, and we must make sure that they are not used to harm the United States, our soldiers, citizens or friends.
This case makes clear that threats to the national security of the United States know no boundaries, and can be found from Times Square in New York to the town square in rural Georgia. For members of the law enforcement community, we are reminded that the need for vigilance is equaled only by the need for inter-agency cooperation on every level. And for all Americans, no matter from what state or corner of the globe we hail, we must not lose sight that our strength is as one nation, though targeted in even the most unlikely places, standing together against those who wish to do us harm.