TAMPA — A Tampa-based sales representative is the latest defendant to plead guilty in a growing federal criminal case over the sale of commercial-grade computer equipment to Iran.
The first defendant, former city of Tampa engineer Mohammad Reza “Ray” Hajian, pleaded guilty in 2012 to conspiring to illegally export to Iran. He was sentenced to four years in prison but later had that reduced by nearly a year because of his cooperation.
That cooperation led to charges against John Alexander Talley, who was hired to service the computer system in Iran after the manufacturer, Hitachi Data Systems, alerted authorities that the company suspected the system had been sold illegally and refused to provide service. Talley later pleaded guilty and began cooperating with investigators. He has not yet been sentenced.
On Friday, Randy Dale Barber, the sales representative who sold the system to Hajian and tried to help fool Hitachi Data Systems and get around U.S. sanctions, pleaded guilty to conspiracy to commit mail fraud. Like the others, Barber agreed as part of his plea deal to cooperate.
The prosecution alleges that Barber made between $120,000 and $200,000 for his role in the scheme.
Even with the easing of economic sanctions against Iran, allowing for the licensed sale of some consumer electronics, the commercial grade equipment involved in this case could not legally be sold to customers in Iran. The Justice Department has taken a hard line on attempts by Americans to do business with the country — deemed by President Reagan and every subsequent president to be a sponsor of terrorism — and has brought dozens of prosecutions since 2008.
“The government focuses on exports of military and military related technology to Iran and China,” said Steve Pelak, a lawyer in Washington, D.C., who until last June oversaw the Justice Department’s prosecution of cases involving the illegal export of arms and sensitive technology.
Pelak’s appointment in 2007 as the Justice Department’s first-ever National Export Control Coordinator represented an effort by the department to improve the investigation and prosecution of illegal exports of U.S. arms and sensitive technology. Pelak was made responsible “for enhancing the capacity and expertise of Justice Department prosecutors to handle these complex investigations and prosecutions,” according to an announcement of his appointment.
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The investigation into the case involving Hajian, Talley and Barber is an example of the complexity involved in such cases.
An updated, 54-page indictment handed up in January also names an Iranian businessman — Mahmood Akbari, also known as John Wassermann — and an Iranian engineer, Reza Hajigholamali, as well as three different businesses involved in an elaborate, multi-million-dollar scheme to sell the computer storage system through companies in the United Arab Emirates. Barber’s supervisor is also mentioned in the indictment and other court papers, but only by the initials, MD.
The scheme described in court papers involved repeated roadblocks and various machinations to get around them. When Hitachi suspected one of the computer systems had been sent to an unauthorized user, the company refused to service it. So in addition to enlisting Talley to provide training and support, Hajian formed a new company to purchase an identical system with the idea of using its serial number to obtain the needed support from Hitachi.
After Homeland Security investigators seized that system in shipment, the conspirators began trying to use a Brazilian company to make purchases on their behalf from a reseller for Hitachi Data Systems.
At one point in 2009, Barber and his supervisor, MD, were fired from an unnamed company in Tampa, according to court documents. MD started a new company and hired Barber. Through that new company, MD and Barber hid from Hitachi Data Systems that they were continuing to buy computer equipment for Hajian, and used coded language in emails and other communications to conceal their activities, according to Barber’s plea agreement.
For example, according to the indictment, MD sent an email to Barber in 2011, saying it was time to “leverage the truth,” and referred to the “4 letter country,” meaning Iran.
Before he was sentenced, Hajian said the computer equipment was intended for a South African cellphone company doing business in Iran. The prosecution says the equipment was powerful and sophisticated. It’s classified as dual use, meaning it could also be used in military applications. One of the computer systems, an HDS USP V enterprise level data storage array, can be used by a range of customers, from small businesses to defense contractors and government agencies.
The system can host hundreds of servers, support numerous applications and store massive amounts of data, according to a prosecution court filing.
A 2012 report by the Government Accountability Office found that in 2011, more than a third of major U.S. export control enforcement and embargo-related criminal prosecutions involved the transfer of American military, technical or nuclear technology to Iran or China.
As the prosecution put it in the Hajian case, “Unlawful exportation of items to countries like Iran, especially through third countries like the United Arab Emirates, is a recurring problem. Only through aggressive enforcement, prosecution and punishment can the problem be abated.”
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Last year, the U.S. government brought at least 15 prosecutions nationwide for illegal transactions involving parties in Iran, about double the number of cases involving sales to China, according to a Justice Department summary of major export enforcement, economic espionage, trade secrets and embargo-related criminal cases released in November.
Iran and China top the list of countries involved in these cases, according to the summary, which goes back to 2008.
Sales of firearms to Mexican drug cartels also figure prominently in the cases, which have been brought across the country, but are concentrated mainly in California and Texas. Florida also has seen several major prosecutions — at least two last year, five in 2012.
“There are actually a fair number of these cases that have been filed or are under investigation,” said lawyer Ross Garber, who specializes in defending export enforcement prosecutions. “It’s something we’ve seen more and more of.”
Although deregulation has led to a reduction in prosecutions in the past couple of years, that doesn’t reflect the cases that are settled without criminal charges.
Garber, whose firm has offices in Connecticut and Washington, D.C., attributes the emphasis on these kinds of charges on several factors, including a trend in cases involving issues of transnational crimes, including national security and sanctions.
Garber also said cases are being made as a side effect of surveillance programs designed to detect terrorism activities.