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The U.S. Department of Commerce today imposed the maximum civil penalty of $159,000 on E.H. Wachs of Wheeling, Illinois, (Wachs) in connection with the export of pipe cutting machines to Iran in violation of the Export Administration Regulations (EAR). The United States maintains a comprehensive embargo on trade with Iran because of Iran's support for international terrorism.
The Commerce Department's Bureau of Industry and Security (BIS) alleged that Wachs committed multiple violations of the EAR when it conspired to export pipe cutting machines and spare parts to the National Iranian Gas Company without the required authorization. BIS alleged that Wachs split orders for more than 50 pipe-cutting machines and spare parts into small shipments and then exported the items through Canada to conceal the fact that they were destined for Iran.
"The illegal transshipment of goods to rogue nations through third countries poses serious threats to U.S. security. The Department is committed to stopping illegal transshipments and will vigorously investigate and prosecute them," said Acting Assistant Secretary for Export Enforcement Lisa A. Prager.
Wachs pleaded guilty to related criminal charges in federal court in Chicago and was sentenced to pay a fine of $506,000 and serve probation for 24 months, and was ordered to institute an export compliance program. Wachs also paid a civil penalty of $85,000 to the Treasury Department's Office of Foreign Assets Control for the violations of Treasury regulations that stemmed from the unauthorized exports.
Acting Assistant Secretary Prager commended Special Agent Juventino Martin of the Office of Export Enforcement's field office in Chicago, Special Agent Carleen Forler of the Homeland Security Department's Bureau of Immigration and Customs Enforcement, Chicago Office, and Assistant U.S. Attorney George Jackson III of the U.S. Attorney's Office for the Northern District of Illinois, who were instrumental in investigating and resolving this case.