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For
Immediate Release: September 20, 2005 Contact - BIS Public Affairs 202-482-2721 |
U.S. Department of Justice
KENNETH L. WAINSTEIN
United States Attorney for the
District of Columbia
Judiciary Center
555 Fourth Street, N.W.
Washington, D.C. 20530
September 15, 2005
PRESS RELEASE
FOR IMMEDIATE RELEASE
Houston Partnership pleads guilty to attempted illegal export of specialty alloy pipes to Iran
Washington, D.C. - United States Attorney Kenneth L. Wainstein,
Houston Resident-Agent-in-Charge Richard Modesette of the
Department of Commerce, Bureau of Industry and Security, and
Houston Acting Special-Agent-in-Charge Robert P. Rutt of the
Department of Homeland Security, Bureau of Immigration and
Customs Enforcement, announced that LPPAI, LTD., a Houston
partnership doing business as PA, INC., of 6626 Gulf Freeway,
Houston, Texas, pleaded guilty today before the Honorable Ellen
S. Huvelle of the United States District Court for the District
of Columbia to one count of Attempted Export Without an Export
License. LPPAI pleaded guilty pursuant to a written plea
agreement. Pursuant to the plea agreement, LPPAI must be
sentenced to a criminal fine of $50,000 and corporate probation
of three years when the partnership is sentenced by Judge Huvelle
on December 16, 2005.
As part of the global resolution of this matter, LPPAI also
entered into an administrative settlement agreement with the
Department of Commerce, Bureau of Industry and Industry.
Pursuant to that settlement agreement LPPAI consented to the
entry of an administrative order, requiring it to pay an
administrative penalty of $50,000 and to be subject to a
suspended order denying export privileges for a period of five
years. LPPAI also agreed not to contest the administrative
forfeiture of the commodities seized pursuant to this
investigation, which were valued at over $33,000.
The evidence in this case established that sometime in early
2004, Proclad International Pipelines, Ltd. (“Proclad”), a
British corporation headquartered in Staffordshire, United
Kingdom, requested a bid from PA, INC., for the sale of specialty
alloy pipes. On or about January 30, 2004, PA, INC. prepared a
bid for the sale of the pipes to Proclad. On or about February
2, 2004, Proclad accepted the bid of PA, INC., and sent PA, INC.
a purchase order for $147,487.28 worth of specialty alloy pipes.
Because PA, INC. did not have the total amount of the ordered
pipes in stock, the parties agreed that PA, INC. would ship the
pipes as they became available. The first shipment was for
$33,653.13 worth of the specialty alloy pipes.
On or about February 2, 2004, Proclad sent an email to PA
INC., which included shipping paperwork (also known as “shipping
marks”) to be included on the shipment. The shipping marks
indicated the description of the goods to be shipped and had
blank spaces to be filled in regarding the weights and dimensions
of the shipment. The shipping marks also indicated that the
pipes were intended for a gas field development project in Iran.
Within a diamond shaped box, the shipping marks indicated the
Iranian destination of the shipment as follows:
I.R. IRAN NIOC – PARS OIL & GAS
ENI IRAN B.V.
SOUTH PARS PHASE 4 & 5
OFFSHORE FACILITIES
FIELD DEVELOPMENT PROJECT
HYUNDAI ENG & CONTR CO LTD.
PA, INC. filled in the blank spaces regarding the weights and
dimensions of the shipment and placed these shipping marks on the
crates that PA, INC. used to pack the pipes for shipment.
On or about February 10, 2004, PA, INC. delivered the crates
containing the specialty alloy pipes, along with the shipping
marks that indicated the Iranian destination of the shipment, to
NNR Cargo, a freightforwarder designated by Proclad to process the
export.
On or about February 11, 2004, NNR Cargo’s air freight
manager reviewed the shipping documentation, including the
shipping marks which indicated the Iranian destination, and
contacted personnel at PA, INC. NNR Cargo’s air freight manager
inquired whether it had a license to ship to Iran. Upon learning
that PA, INC. did not have an export license NNR Cargo’s air
freight manager refused to handle the shipment. NNR Cargo’s air
freight manager informed PA, INC., that, because of the U.S.
embargo against Iran, it could not ship merchandise to Iran in the
absence of a license. NNR Cargo’s air freight manager indicated
that the Iranian embargo covered direct or indirect shipments to
Iran. NNR Cargo’s air freight manager indicated that NNR Cargo
would return the shipment to PA, INC. In subsequent
conversations, NNR Cargo’s air freight reiterated that the U.S.
embargo against Iran prohibited this export.
On or about February 16, 2004, the shipment was returned from
NNR Cargo to PA, INC. On or about February 17, 2004, PA, INC.
delivered the crates containing the specialty alloy pipes, along
with shipping documentation, to DFDS Transport, another
freightforwarder designated by Proclad to process the export. The
shipping documentation included the identical shipping marks,
except that the references to Iran were deleted. Within a
diamond shaped box, the shipping marks indicated the ultimate
destination of the shipment as follows:
PHASE 4 & 5
OFFSHORE FACILITIES
FIELD DEVELOPMENT PROJECT
HYUNDAI ENG & CONTR CO LTD.
On or about February 18, 2004, agents with the Department of
Commerce detained the shipment at DFDS Transport, thereby
preventing its export.
No licenses were applied for or obtained from the United
States Department of Treasury or any other agency in the District
of Columbia, for any of the dealings with Iran by PA, INC.
In March 2004, PA, INC. converted to a Texas limited
partnership under the name LPPAI, LTD. At the time of the
conversion, LPPAI, LTD. assumed the name PA, INC., and continued
to do business under that name. At the time of the conversion,
LPPAI, LTD. assumed all of the liabilities and obligations of PA,
INC.
The guilty plea is the result of an investigation by the
United States Department of Commerce, Bureau of Industry and
Security; and the Department of Homeland Security, Bureau of
Immigration and Customs Enforcement.
In announcing today’s guilty plea, U.S. Attorney Wainstein,
RAIC Modesette, and SAC Butt commended the efforts of Commerce
Special Agent William Carter and ICE Special Agent Ernest A.
Payton. They also praised Legal Assistants Latasha Sams and
Cheryl Simms, and Assistant United States Attorney Jonathan M.
Malis, who is prosecuting the case.
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