Virginia Man Used Front Shipping Companies to Conceal Iranian Shipments

A 72-year-old Virginia man has pleaded guilty to two conspiracies to do business in Iran without obtaining the necessary licenses or permissions in violation on U.S. sanctions.

Behrouz Mokhtari, a naturalized citizen of the U.S. and a native of Iran, faces a maximum sentence of five years in federal prison for each of the two conspiracy counts and must repay the money and forfeit a $1.5 million house in California.

According to his guilty plea, from at least March 2018 until at least September 2020, Mokhtari conspired with his co-defendant and others to evade Iranian sanctions by engaging in business activities on behalf of Iranian entities without first obtaining the required licenses from the Office of Foreign Assets Control (OFAC).

Mokhtari worked with co-conspirators to control multiple business in Iran and the United Arab Emirates, referred to collectively as “the FSR Network”, to provide services to Iranian entities and engage in transactions involving Iranian petrochemical products, including refinement and transportation by sea. The transactions were concealed using a UAE bank account, which Mokhtari at least partly controlled, as a conduit to process them using U.S. dollars.

In his guilty plea, Mokhtari also stated that from about February 2013 until at least June 2017, he and a number of Iranian nationals engaged in a conspiracy to conduct illicit shipments of petrochemical products to and from Iran and used the U.S. financial system for the hiring of the vessels and other expenses.

According to the plea, Mokhtari created a front company in Panama known as East & West Shipping, Inc. to purchase two liquid petroleum gas (LPG) tankers, for approximately $38 million, which were then used to transport Iranian petrochemical products for Iranian entities associated with the Government of Iran.

After using East & West to purchase the two vessels, Mokhtari transferred ownership to conceal the vessels’ financial and ownership interest. Another entity, Greenline Shipholding, was then used to control operations of the vessels.

“For example, through email communications from Greenline email accounts, or email accounts containing some variation of the Greenline name, the conspirators directed Company 5, a ship management company, to oversee the leasing and operation of [the vessels] to transport Iranian petrochemical products from Iranian ports to other locations and to participate in ship-to-ship transfers of Iranian products while on the high seas,” the Department of Justice said in its announcement.

“Mokhtari and his co-conspirators frequently communicated by email about the nature and source of the products that the vessels were transporting, as well as the use of false shipping documents and other measures taken to conceal the fact that the vessels were transporting products to and from Iran, in order to evade the Iranian sanctions.”

In May 2017, Mokhtari pocketed more than $2.8 million from the sale of one of the vessels for scrap via a company he owned called Russell Shipping, Inc. Funds from the sale were wired from the purchaser to accounts belonging to another company Mokhtari owned, called Mori Construction and Development, LLC, at two separate banks. By September 2017, all proceeds from the sale were moved to a third bank account held by Mokhtari and his daughter and later used to a home in Campbell, California for $1.5 million.

In addition to a maximum five-year sentence for each of the two conspiracy counts, Mokhtari must forfeit the home and agreed to a money judgment in the amount of approximately $2,862,598.12.

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