Chinese executive is accused of using U.S. banks in sales to Iran
A Manhattan grand jury on Tuesday indicted a Chinese executive and his company on charges of covertly using New York banks to finance the sale of tons of restricted materials to Iran, potentially supporting Tehran’s ballistic missile and nuclear programs in violation of U.N. sanctions.
The indictment, announced by Manhattan Dist. Atty. Robert M. Morgenthau, accused Li Fang Wei and his company, LIMMT Economic and Trade Co., of selling high-strength metals with military applications to subsidiaries of an Iranian military agency. Many of the items are on international control lists designed to restrict the export of technologies that can be used for military programs. The case exposed a major gap in China’s enforcement of a web of international export controls and U.N. resolutions designed to prevent Iran from acquiring raw materials for its nuclear and ballistic missile programs, according to experts.
The indictment charged Li and his company with 118 criminal counts of falsifying business records, saying the company “engaged in deception and fraud” and used “alias names and shell companies to deceive U.S. financial institutions into processing its international payments.”
“Sanctions are effective only if they are enforced,” said Morgenthau, who noted that Li is at large in China. “We may not be able to shut down Li’s factories, but we can shine a light on his conduct and the conduct of foreign banks that permit these types of operations to flourish.”
The Treasury Department sanctioned LIMMT in June 2006 for its alleged role in selling prohibited weapons parts and banned it from carrying out transactions within the U.S. financial system. Li’s customers included a number of subsidiaries of the Iranian Defense Industries Organization.
The indictment describes several Iranian transactions involving those firms. Li secretly channeled payments to customers through several American banks, including Bank of America, Citibank and J.P. Morgan Chase, according to the indictment.