Virginia Man Pleads Guilty to Conspiring to Violate Iranian Sanctions
Defendant, a Naturalized U.S. Citizen from Iran, Engaged in Two Schemes to Do Business With Iran Without Obtaining the Necessary Licenses or Permission
Greenbelt, Maryland – Behrouz Mokhtari, age 72, of McLean, Virginia and Tehran, Iran, a native of Iran and a naturalized citizen of the United States, pleaded guilty today to two conspiracies to violate sanctions imposed by the United States on Iran regarding the exportation, re-exportation, sale, or supply directly or indirectly, any goods, technology, or services to Iran.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.
According to his guilty plea, from at least March 2018 until at least September 2020, Mokhtari conspired 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 business 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. 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, from about February 2013 until at least June 2017, Mokhtari and a number of Iranian nationals engaged in a conspiracy 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 United States citizen, he was prohibited from engaging in business with or providing services to Iranian entities, without first obtaining a license or permission from OFAC to do so. Neither Mokhtari, nor any of his co-conspirators ever applied for or obtained such a license. Mokhtari 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.
As part of his guilty plea, Mokhtari must forfeit money, property, and/or assets derived from, obtained as the result of, or used to facilitate the commission of his illegal activities, including the residence he purchased in Campbell, California and a money judgment in the amount of approximately $2,862,598.12.
Mokhtari faces a maximum sentence of five years in federal prison for each of the two conspiracy counts. U.S. District Judge George J. Hazel has scheduled sentencing for April 3, 2023 at 10:00 a.m.
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 is prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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