SYRIA: Additional Items Eligible for Export/Reexport under License

On Wednesday, June 12, 2013, the U.S. Department of State announced a new limited waiver of the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 (SAA) to allow the export and reexport, under license, of certain reconstruction-related items for the benefit of the Syrian people.  Consistent with Section 5(b ) of the SAA and  Executive Order 13338 of May 11, 2004, the waiver authorizes the Bureau of Industry and Security (BIS) to issue licenses on a case-by-case basis for the export or reexport of certain commodities, software and technology, including but not limited to those related to water supply and sanitation, agricultural production and food processing, power generation, oil and gas production, construction and engineering, transportation, and educational infrastructure, as a means of helping to address the critical needs of the Syrian people and facilitating reconstruction.  Note that the export and reexport of food and medicine do not currently require a license, while medical devices and telecommunication commodities may be licensed under pre-existing waivers.  BIS will publish an implementing regulation shortly.  However, exporters and reexporters may immediately submit license applications for consideration under the new waiver.

For further information, or if you have questions regarding this announcement, please contact the BIS Foreign Policy Division at (202) 482-4252.

TAIWANESE FATHER AND SON ARRESTED FOR ALLEGEDLY VIOLATING US LAWS TO PREVENT PROLIFERATION OF WEAPONS OF MASS DESTRUCTION

CHICAGO -- A resident of Taiwan who the U.S. government has linked to the supply of weapons machinery to North Korea and his son, who resides in suburban Chicago, are facing federal charges here for allegedly conspiring to violate U.S. laws designed to thwart the proliferation of weapons of mass destruction, federal law enforcement officials announced today. HSIEN TAI TSAI, also known as Alex Tsai, who is believed to reside in Taiwan, was arrested last Wednesday in Tallinn, Estonia, while his son, YUEH-HSUN Tsai, also known as Gary Tsai, who is from Taiwan and is a legal permanent resident in the U.S., was arrested the same day at his home in Glenview, Ill.

Gary Tsai, 36, was ordered held in custody pending a detention hearing at 1:30 p.m. today before Magistrate Judge Susan Cox in U.S. District Court in Chicago. Alex Tsai, 67, remains in custody in Estonia pending proceedings to extradite him to the United States.

Both men were charged in Federal Court in Chicago with three identical offenses in separate complaints that were filed previously and unsealed following their arrests. Each was charged with one count of conspiring to defraud the United States in its enforcement of laws and regulations prohibiting the proliferation of weapons of mass destruction, one count of conspiracy 2 to violate the International Emergency Economic Powers Act (IEEPA) by conspiring to evade the restrictions imposed on Alex Tsai and two of his companies by the U.S. Treasury Department, and one count of money laundering.

The arrests and charges were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Gary Hartwig, Special Agent-in-Charge of Homeland Security Investigations in Chicago; and Ronald B. Orzel, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Departmentfs National Security Division and Office of International Affairs assisted with the investigation. U.S. officials thanked the Estonian Internal Security Service and the Estonian Prosecutorfs Office for their cooperation.

According to both complaint affidavits, agents have been investigating Alex and Gary Tsai, as well as Individual A (a Taiwanese associate of Alex Tsai), and a network of companies engaged in the export of U.S. origin goods and machinery that could be used to produce weapons of mass destruction. Alex and Gary Tsai and Individual A are associated with at least three companies based in Taiwan . Global Interface Company, Inc., Trans Merits Co., Ltd., and Trans Multi Mechanics Co., Ltd. . that have purchased and then exported, and attempted to purchase and then export, from the United States machinery used to fabricate metals and other materials with a high degree of precision.

On Jan. 16, 2009, under Executive Order 13382, which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Departmentfs Office of Foreign Assets Control (OFAC) designated Alex Tsai, Global Interface, and Trans Merits as proliferators 3 of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with Alex Tsai and the two Taiwanese companies.

In announcing the January 2009 OFAC order, the Treasury Department said that Alex Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Alex Tsai ghas been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Koreafs advanced weapons program.h The Treasury Department further said that Global Interface was designated gfor being owned or controlled by Tsai,h who is a shareholder of the company and acts as its president. Tsai is also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc. http://www.treasury.gov/press]center/press]releases/Pages/hp1359.aspx

After the OFAC designations, Alex and Gary Tsai and Individual A allegedly continued to conduct business together, but attempted to hide Alex Tsaifs and Trans Meritfs involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009 . approximately 8 months after the OFAC designations . Alex and Gary Tsai, Individual A and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Alex Tsai. Specifically, the charges allege that in September 2009 they purchased a Bryant center hole 4 grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material.

The charges further allege that by at least September 2009, Gary Tsai had formed a machine tool company named Factory Direct Machine Tools, in Glenview, Ill., which was in the business of importing and exporting machine tools, parts, and other items to and from the United States. However, the charges allege that Alex Tsai and Trans Merits were active partners in Factory Direct Machine Tools, in some instances procuring the goods for import to the United States for Factory Direct Machine Tool customers.

Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine; money laundering carries a maximum of 20 years in prison and a $500,000 fine; and conspiracy to defraud the United States carries a maximum of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. The government is being represented by Assistant U.S. Attorneys Patrick Pope and Brian Hayes.

The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

IRANIAN NATIONAL ACCUSED OF ILLEGALLY EXPORTING GOODS FOR IRANIAN PETRO-CHEMICAL INDUSTRY

ALEXANDRIA, Va. – Mehdi Khorramshahgol, 49, of Rockville, Md., has been accused of allegedly exporting tens of thousands of dollars of industrial parts manufactured by U.S. companies to Iran, in violation of trade sanctions imposed on Iran, which is a state sponsor of terrorism.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington, D.C.; and Rick Shimon, Special Agent in Charge of the Department of Commerce’s Office of Export Enforcement’s Washington Field Office, made the announcement.

Mehdi Khorramshahgol, a United States citizen and Iranian national, was arrested on March 7, 2013, and charged via criminal complaint of conspiring to violate the International Emergency Economic Powers Act. If convicted, he faces a maximum penalty of 20 years in prison.

According to the complaint, beginning in 2008, Khorramghahgol allegedly solicited price quotations regarding U.S. origin-industrial parts for individuals and businesses located in Iran. Khorramshahgol successfully purchased thousands of dollars of U.S.-origin parts. To avoid detection and to facilitate the shipment of goods from the United States to Iran, Khorramshahgol allegedly falsified shipping records by indicating the goods were of little value and that the end-user for the goods was located in the United Arab Emirates. Once the goods reached the UAE, the end-user information was changed and the goods were shipped onward to Iran.

Khorramshahgol and his co-conspirators allegedly created paperwork that falsely stated the materials would not be sold to Iran. The complaint alleges that Khorramshahgol was aware of the United States sanctions against Iran, as he forwarded a Department of Justice press release regarding the enforcement of the Iranian sanctions to other co-conspirators with an instruction to "read it all."

During the course of the conspiracy, Khorramshahgol allegedly exported tens of thousands of dollars’ worth of industrial parts to Iran. These parts were primarily for use in Iran’s state-owned Petrochemical industry.

This investigation is being conducted by HSI’s Washington Field Office and the Department of Commerce’s Office of Export Enforcement. Assistant United States Attorneys Andrew Peterson and Carter Burwell are prosecuting the case on behalf of the United States, with assistance from the Counterespionage Section of the National Security Division at the Department of Justice.

Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the DIstrict Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov/ or on https://pcl.uscourts.gov.

NORTH WALES MAN SENTENCED FOR ILLEGALLY EXPORTING GOODS

PHILADELPHIA - Timothy Gormley, 52, of North Wales, PA, was sentenced today to 42 months in prison for five counts of violating the International Emergency Economic Powers Act (IEEPA).  Gormley was employed by Amplifier Research, in Souderton, Pennsylvania, a manufacturer and supplier of microwave amplifiers with both domestic and foreign customers.  On November 30, 2011, the Department of Commerce (DOC), Office of Export Enforcement, received a voluntary self-disclosure from Amplifier Research.  Many of their products are classified under an Export Control Classification Number and require a license for export to most destinations outside of Europe.  These amplifiers are controlled for National Security reasons, and have application in military systems which include radar jamming, weapons guidance systems, and other uses.  Amplifier Research became aware that Gormley had committed numerous violations of government regulations, between June 7, 2006 and June 28, 2011.  

Gormley pleaded guilty on October 17, 2012, admitting that he had: altered invoices and shipping documents to conceal the correct classification of amplifiers to be exported so that they would be shipped without the required licenses; listed false license numbers on export paperwork for defense article shipments; and lied to fellow employees about the status and existence of export licenses.  Gormley's actions resulted in at least 50 unlicensed exports of national security sensitive items to destinations including China, India, Hong Kong, Taiwan, Thailand, Russia, Mexico, and other countries. When Gormley admitted to the conduct, he explained it by saying he was "too busy" to obtain the licenses.  Gormley claimed he was overwhelmed at work and that was his only excuse.

In handing down her sentence, U.S. District Court Judge Gene E.K. Pratter cited the risk to the community in allowing National Security goods to be exported without proper licenses and the need for  deterrence.  In addition to the prison term, Judge Pratter ordered three years of supervised release and fined Gormley $1,000.

The case was investigated by the Department of Commerce and was prosecuted by Assistant United States Attorney Nancy Winter.
 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106

Contact: PATTY HARTMAN, Media Contact, 215-861-8525

Statement of Under Secretary of Commerce Eric L. Hirschhorn:

"As the substantial sentence in this case demonstrates, we will not allow our national security to be compromised by individuals who flout our nation's export control laws.  The egregious violations in this case weren’t committed by accident but were perpetrated by an informed individual who intentionally violated the law."