News and Press Releases

FOR IMMEDIATE RELEASE:

THURSDAY - July 31, 2008

SENTENCING OF COMPANY FOR EFFORTS TO TRADE WITH IRAN

Raleigh, North Carolina - United States Attorney George E.B. Holding announced today that on Monday July 28, 2008, Allied Telesis Labs, Inc. (ATL), was sentenced in United States District Court in Elizabeth City to a $500,000 criminal fine and was placed on probation for two years for violating United States law regarding conducting business with Iran.

Allied Telesis Labs, Inc. (ATL) had earlier entered a guilty plea before United States District Court Judge Terrence W. Boyle to conspiracy to violate the International Emergency Economic Powers Act (IEEPA), Title 50, United States Code, Sections 1702 and 1705, Title 31, Code of Federal Regulations, Sections 560.203, 560.204 and 560.205 and Title 18, United States Code, Section 371.

ATL, formerly known as Allied Telesyn Network (ATN), is a research and development facility with offices in the North Carolina State University’s Centennial Campus, Raleigh, North Carolina. It is a subsidiary of Allied Telesis Kabushi Kaisha, (ATKK), a global holding company based in Tokyo with offices at various locations around the globe. ATKK either directly or through subsidiaries and/or business associates is engaged in the design, manufacture, sale and installation of telecommunication systems.

ATL was successfully engaged in the design of telecommunication equipment and systems including high capacity Multiservice Access Platforms (iMAPs) and related items capable of routing a large volume of messages/information/data. ATL’s guilty plea acknowledged that the corporation conspired with another to trade with the Islamic Republic of Iran in violation of the law. Specifically, ATL and its related corporate entities conspired to land and execute a $95,000,000 contract with the Iranian Information Technology Company (IRITCO) to rebuild and upgrade the telecommunications systems of approximately 20 Iranian cities, including Tehran. The iMAPS developed here in the Triangle were to be a central component of this system. Preparation for the execution of the contract went as far as the manufacture of approximately $2 million worth of iMAPS at ATKK facilities in Singapore. The contract negotiations eventually collapsed, the telecommunications system was not installed and the iMAPs were sold elsewhere at a loss.

Mr. Holding noted the importance of the case: “Every American is aware of the sensitive nature of the United States’ relationship with Iran. That relationship is a central focus of our foreign policy and the work of our Government. The International Emergency Economic Powers Act allows the President to regulate the conduct of business internationally under certain circumstances, a step which was taken with regard to Iran. When the President imposes these types of authorized restrictions, it is incumbent on all citizens, including our corporate citizens, to adhere to those regulations and to follow the strict letter of the law. Only then can we be confident that our country speaks with one voice in our relationships with our international friends and foes. The plea of guilty and the sentence in this case should act as a reminder to our business community of the seriousness with which the Department of Justice takes this issue.”

The case was investigated by the United States Department of Commerce. Assistant United States Attorney John Bowler represented the United States in federal court.

 

News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.

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