Sep

22

Texas Man Charged with Smuggling for Forwarding One Email

Posted by at 10:10 pm on September 22, 2014
Category: Criminal Penalties • Iran Sanctions • OFAC

BlackBerry email on the BB 8330 by Ian Lamont(Own work) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/ilamont/4329363938/A criminal information was filed last week against Patrick Jean Zuber, a U.S permanent resident and former Weatherford International Vice-President, charging him with conspiracy to violate the anti-smuggling statute, 18 U.S.C. § 554. How did he get into such trouble? Actually, he didn’t do anything more than push the forward button to send an email from a company in Thailand seeking to purchase equipment for an oil project in Iran. That’s right: he is being charged not with sending any equipment to Iran; he is being charged with sending an email forwarding that inquiry from the potential customer in Thailand.  Zuber forwarded that inquiry to a Canadian employee of Weatherford.  This cold-blooded and heinous act of clicking “forward”  was deemed to be facilitation of an illegal export to Iran. The criminal information is silent as to whether any export actually occurred

Whether the Canadian to whom the email was sent was employed by a U.S. or foreign subsidiary of Weatherford is not made clear by the criminal information. If it was a foreign subsidiary, then at the time Zuber forwarded the email, it would have been perfectly legal, under section 560.205 of OFAC’s Iranian Transactions and Sanctions Regulations, for the Canadian citizen at a foreign company to export EAR99 items to Iran even if they were originally manufactured in the United States. In that case, showing criminal intent by Zuber, who may well have thought that Canada could legally fulfill the order he forwarded, is going to be extremely difficult.

Of course, there may be other facts not mentioned in the criminal information which justify this prosecution. But if the basic crime here is forwarding an email to someone that Zuber thought could legally fulfill the order, this really seems more suited for a civil, rather than a criminal, penalty. After all, section 560.205 of OFAC’s requlations does prohibit a U.S. person from facilitating a transaction by a foreign person that would be illegal if done by a U.S. person and so OFAC would clearly have the authority to fine Mr. Zuber for pushing the forward button.

Photo Credit: In 30 Minute Guides

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One Comment:

The complaint seems to imply that the Canadian was part of a foreign subsidiary. Co-Conspirator B is noted as being a Vice President of MENA West in paragraph 7. Paragraph 4 states that Weatherford Middle East and North Africa (“MENA”) was under Weatherford Oil Tool Middle East Ltd, which was incorporated in the British Virgin Islands.

I’m also curious to see how/whether simply forwarding an email will qualify as facilitating, since I’m not certain it is substantial enough. Would it also be facilitating if the accused had responded to the sender by stating that MENA East did not handle Iran, but MENA West did?

I’m also dubious about getting a conviction in this case because I don’t see where fraud exists, and both allegations in paragraph 1 use the term “fraudulently” to describe the alleged offense. I expect the claim from the prosecutor will be that the email was forwarded to avoid US sanctions, but the defense about that should be that it was forwarded because it was sent to the wrong division (as can be determined by reading the list of countries in paragraph 5) and forwarded to the correct division (per the countries in paragraph 7).

Comment by SK on September 25th, 2014 @ 3:42 pm