Where Industry and Security Intersect
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ENNETH L. WAINSTEIN
United States Attorney for the
District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington, D.C. 20530
PRESS RELEASE
FOR IMMEDIATE RELEASE
For Information Contact:
Wednesday, August 11, 2004 Public Affairs
Channing Phillips (202) 514-6933
http://www.usdoj.gov/usao/dc
Dubai trader and Iranian company officer
indicted by federal grand jury for scheme
to illegally ship U.S. goods to Iran
Washington, D.C. - United States Attorney Kenneth L. Wainstein, U.S. Department of Commerce Assistant Secretary for Export and Enforcement Julie L. Myers, and Department of Homeland Security Assistant Secretary for Immigration and Customs Enforcement Michael J. Garcia jointly announced today that a federal grand jury in the District of Columbia has returned an indictment charging Khalid Mahmood, also known as Khalid Mahmood Chaudhary, 52, of Dubai, United Arab Emirates, and Mohammad Ali Sherbaf, age unknown, of Iran, with violations of the International Emergency Economic Powers Act, the Iranian Transactions Regulations, and the Export Administration Regulations. Mahmood is in federal custody following his arrest in the Washington, D.C. area on Saturday, August 7, 2004. He has a detention hearing scheduled for today, August 11, 2004, before U.S. Magistrate Alan Kay in the United States District Court for the District of Columbia. An arrest warrant has been issued for Sherbaf, who is believed to be in Iran. The two-count Indictment carries potential penalties of 10 years of imprisonment and a $250,000 fine on each count, as well as potential administrative sanctions. The case is assigned to the Honorable Royce C. Lamberth, United States District Judge.
For years, the United States government has designated Iran as a principal supporter of international terrorism. Accordingly, Executive Orders previously issued by the President prohibited, among other things, the exportation, reexportation, sale, or supply to Iran of any goods from the United States or by a United States person.
United States Attorney Wainstein heralded the indictment, stating “export embargoes and licensing requirements are imposed to protect our national security, and violations such as these warrant stiff punishment. This case demonstrates that we will pursue those who seek to make a profit by evading these restrictions, and we will prosecute them to the full extent of the law.”
Assistant Secretary Myers commented, “we will continue to vigorously pursue those individuals who choose to engage in illegal export activities that threaten our national security. The indictment announced today is a clear example of the exceptional collaborative efforts of the federal law enforcement community.”
The Indictment alleges that Mahmood was doing business as Sharp Line Trading with offices in the United Arab Emirates, and Sherbaf was a principal officer of Sepahan Lifter Company, a forklift manufacturing firm located in Iran. According to the Indictment, in early June 2004, an employee of Sepahan Lifter Company contacted a United States company by email, and requested a price quotation for particular radiators for heavy-duty 5-ton capacity forklift trucks manufactured in Iran by Sepahan Lifter Company. After providing the requested information, the United States company’s representative asked who was responsible for the export license. Sepahan Lifter Company then identified Mahmood as the middleman for the transaction, who would enable them to mask the fact that the radiators were destined for Iran and thereby avoid United States export licensing requirements and evade the United States export embargo on Iran.
Mahmood and his Sepahan Lifter Company associates ultimately agreed with the United States company to buy 280 radiators for a total price of $81,200. During June and July 2004, according to the Indictment, Mahmood and Sepahan Lifter Company personnel, including Sherbaf, exchanged emails with the United States company and among themselves, discussing how to structure the transaction so as to conceal the fact that the radiators were destined for Iran. The discussion continued in telephone conversations and, on August 3, 2004, in a meeting between Mahmood and the United States company representative at the United States company’s facility in Indiana. At that meeting, Mahmood finalized the order and warned the United States company’s representative to keep their arrangement quiet. According to the Indictment, Mahmood and Sherbaf acknowledged they knew their arrangement was illegal, and they instructed the United States company’s representative to take specific steps to hide the arrangement.
According to the Indictment, when Mahmood was arrested on August 7, 2004, while on a visit to the Washington, D.C. area, he possessed business cards of two men he had met at the United States company on August 3, 2004, but in response to agents’ questions he falsely denied having visited the United States company or knowing the men named on the cards.
The investigation was handled by the Chicago Field Offices of the Commerce Department’s Bureau of Industry and Security, Office of Export Enforcement, and the Department of Homeland Security’s Immigration and Customs Enforcement.
In announcing the indictment, United States Attorney Wainstein, Assistant Secretary Myers, and Assistant Secretary Garcia praised the outstanding work and cooperation of those offices and the case agents assigned to this matter. United States Attorney Wainstein also extended appreciation to the United States Attorney’s Offices in the Eastern District of Virginia and the Northern District of Georgia, which provided valuable assistance during the investigation.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.
U.S. Department of Justice