Legal News

Manhattan DA Indicts Chinese Co. Over Alleged Sale of Material to Iran

By Amir Efrati

The Manhattan DA’s office once again made waves in international waters with the announcement today of charges against a Chinese company and its manager for allegedly engaging in illegal financial transactions through U.S. banks in order to provide banned materials to aid Iran’s nuclear program.

The 118-count indictment against Li Fang Wei, a Chinese citizen, and his company, Limmt Economic and Trade Co. Ltd., says Limmt allegedly used aliases and front companies in order to send and receive dozens of illegal payments through the U.S., District Attorney Bob Morgenthau said at a press conference, according to DJ Newswires’ Chad Bray (link unavailable).

In 2006 Limmt was banned from doing business in the U.S. because it had assisted Iran’s nuclear program. It then used aliases to provide banned materials to Iran, according to the charges. (Here’s an early NYT story.)

In seeking to extradite Wei, Morgenthau could place the Obama administration in a difficult spot, reports Jay Solomon, WSJ’s chief foreign affairs correspondent. Secretary of State Hillary Clinton and other U.S. officials have sought to calm relations with Beijing since taking office, largely due to Washington's need of Chinese support for its economic recovery plans. Privately, however, U.S. officials have voiced frustration with Beijing over its unwillingness to take a tough line on Iran's nuclear program.

The indictment, brought with the aid of the Treasury Department’s Office of Foreign Asset Control, comes after WSJ reported recently reported that U.S. security officials said they have evidence of recent efforts by Iran to evade sanctions and acquire metals from China used in high-tech weaponry, including long-range nuclear missiles.

The charges stem from a broader probe by the government of how U.S. banks allegedly facilitated transactions for Iran. In January the DA’s office settled with UK-based Lloyds TSB Group PLC over an alleged scheme in which it allowed Iran to access the U.S. banking system to buy goods and services from U.S. companies and to finance the purchase of goods and services from foreign vendors that sought payment in dollars. The company has said it is cooperating in the probe.

Full post as published by Law Blog - WSJ.com on April 07, 2009 (boomark / email).