A Chinese man previously accused of contributing to Iran’s ballistic missile programme has been charged in the United States with making millions of dollars in illegal financial transactions to avoid economic sanctions, the Justice Department said on Tuesday.
The United States offered a reward of up to US$5 million on Tuesday for information leading to the arrest and/or conviction of Li Fangwei, also known as Karl Lee, who is accused of supplying missile parts to Iran, and targeted companies from China and Dubai for allegedly helping Iran evade weapons and oil sanctions.
Li faces charges of money laundering, wire fraud and other crimes as part of an indictment issued in New York City. Prosecutors say the federal government also seized nearly US$7 million used by front companies he set up to evade sanctions previously imposed on him for his business dealings with Iran.
In a signal Washington will keep pressure on Iran over its nuclear programme, the US Treasury Department said it was sanctioning eight of Chinese businessman Li Fangwei's Chinese companies for allegedly procuring missile parts for Iran, designed in part to prevent Iran from developing a nuclear weapon.
“These actions send a loud and clear warning to those involved in the illegal proliferation of sensitive materials to Iran that the United States will not spare any efforts to disrupt their actions and bring them to justice,” John Carlin, assistant attorney general for national security, said in a statement.
Li has been the target of US sanctions in the past for his alleged role as a principle supplier to Iran's ballistic missile programme.
A fugitive living in China, Li was indicted on similar allegations in 2009 by the Manhattan District Attorney’s Office.
Prosecutors say Li, who controls a network of companies in China that have done millions of dollars in business with Iran, has for years supplied the country with ballistic missile parts.
“According to the Indictment, he (Li) controls a large network of front companies and allegedly uses this network to move millions of dollars through US-based financial institutions to conduct business in violation of the International Emergency Economic Powers Act (IEEPA) and the Weapons of Mass Destruction Proliferators Sanctions Regulations, which prohibit such financial transactions," the State Department said in a statement.
Though the products were banned, and Li and his company previously sanctioned, prosecutors say Li thwarted the sanctions by creating a web of front companies through which he did roughly US$8.5 million in business in more than 165 separate transactions. According to the indictment, Li went “underground” after the sanctions, continuing to deal with Iran but through his front companies and using aliases and fake business names to hide the beneficiaries of electronic wire transfers.
Though money was moved through US-based financial institutions, no bank is accused of any wrongdoing, the Justice Department said.
A United Nations report said earlier this month that Iran has acted to cut its most sensitive nuclear stockpile by nearly 75 percent, making clear Tehran is undertaking the agreed steps to curb its nuclear programme.
A US official, however, said last month Iran had pursued a longstanding effort to buy banned components for its nuclear and missile programs in recent months, even while it was striking an interim deal with major powers to limit its disputed atomic activity.
Vann Van Diepen, principal deputy assistant secretary of state for international security and non-proliferation, added that Li had continued to supply such items despite U.S. pressure on China to tighten export controls.
Contacted by Reuters in February last year, for an earlier story about his business, Li said he continued to get commercial inquiries from Iran but only for legitimate merchandise. Li said his metals company, LIMMT, had stopped selling to Iran once the United States began sanctioning the firm several years ago.
China has said that it is very clear in its stance on non-proliferation and that it has seriously fulfilled its obligations to UN resolutions about export controls.
Associated Press, Reuters