On Tuesday, the stakes were raised for companies selling raw materials overseas when the Manhattan District Attorney's office unsealed a 118-count indictment against a Chinese executive and his company, accused of fraudulently using New York banks to help Iran buy large quantities of sensitive materials.

Li Fang Wei and LIMMT Economic and Trade Company, LTD, a Chinese company, are charged with conspiracy and falsifying business records in connection with materials sales to an arm of the Iranian military, the Defense Industries Organization, between 2006 and 2008. Materials changing hands allegedly included uranium-enriching centrifuges, graphite electrodes, and metals and minerals known for their use in long-range missiles and other weapons. Many of the materials are specifically banned by the United Nations for sale to Iran. Prosecutors allege that, because both LIMMT and Defense Industries are banned from doing business in the United States, Mr. Li employed shell companies and aliases to conceal the sales and funnel the proceeds through the U.S. banking system. 

With the government and the international community's focus on the spread of weapons technology, it is more important than ever to be vigilant about establishing the end-user for your products, and to be aware of and comply with all applicable export laws and regulations. If you have any questions, please feel free to contact any member of Ballard's White Collar/Investigations Group.


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