The U.S. Attorney’s Office for the District of Columbia announced this week the indictment of three California men for the attempted export of textile machinery to Iran in violation of the Iranian Transaction Regulations. Two of the men — Babak Maleki and Shahram Setudeh Nejad — were arrested; the third man — Mojtada Maleki-Gomi — is currently at large in Iran.

According to the indictment, the three men had placed an advertisement on a web site to sell “knit de knit” textile equipment. KDK equipment is used to dye multicolor yarns for fabrics and carpets. An undercover ICE agent and a “cooperating source” contacted Nejad and asked if the equipment could be shipped to Iran. Nejad then put the undercover agent and the source in contact with Mr. Maleki-Gomi who explained that the equipment could be transhipped through Dubai to Iran in order to avoid the U.S. sanctions on transactions with Iran. A container of 30 knit de knit machines was shipped and then intercepted by the U.S. government in Dubai.

Exporters should note with caution that this was a sting operation where the government agents proposed the illegal export. It is easy to see why the three defendants here might have been targeted. All three men had what appeared to be Iranian surnames and were selling textile equipment. Iran is, not surprisingly, a substantial importer of textile equipment for its carpet and fabric industry and the agents surmised that the men might, therefore, be willing to ship the equipment to Iran.

We have also seen a tendency for ICE agents, as they did in this case, to target web-based sellers for sting operations. This is probably because it allows them to do investigative work from the comfort of their offices.

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