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April 26, 2017

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US sets US$5 mil. bounty on Chinese man over Iran dealings

WASHINGTON--The United States has unveiled a new indictment and slapped a US$5 million reward on the head of a Chinese man it called a "principal supplier" to Iran's ballistic missile program.

China's foreign ministry on Wednesday denounced the move, which it said "will not help solve the problem and will also impact nonproliferation cooperation."

Washington said on Tuesday that Li Fangwei, or Karl Lee, has continued to ship equipment and materials to Iran even after he and his company LIMMT Economic and Trade were first indicted and blacklisted by the United States in 2009.

The Department of Justice's new charges allege that he used China-based front companies — some with the same address as LIMMT — to move millions of dollars worth of payments from Iran through the U.S. financial system.

The department said it had seized nearly US$7 million linked to the payments, claiming the money from the accounts of Chinese banks in U.S. banks.

From 2006 to 2014, the Justice Department said, Li used front companies for more than 165 separate U.S. dollar transactions, worth more than US$8.5 million.

"Included in those illicit transactions have been transactions involving sales to U.S. companies and sales of merchandise by Li Fangwei to Iran-based companies utilizing the U.S. financial system," it said.

The indictment said that in 2011, via a front company, Li exported to Iran a production line for aramid fiber, which can be used for ballistic missiles and centrifuges for uranium enrichment, as well as for body armor.

He also used front companies, it said, to invoice Iranian buyers for shipments of specialized tubes, pipes and rods that can be used in developing gas centrifuges.

Such centrifuges are at the center of accusations that Iran is seeking to enrich enough nuclear fuel to arm future atomic weapons.

The money seized came mainly from U.S. accounts of the Shanghai Pudong Development Bank, with a small portion as well from a Bank of China account.

Li was charged with violating the International Emergency Economic Powers Act, under which he is banned from the U.S. financial system; with wire and bank fraud; and with money laundering.

"Li spun a web of front companies to carry out prohibited transactions essentially in disguise. He now stands charged with serious crimes, and millions of his dollars have been seized," said U.S. Attorney Preet Bharara in a statement.

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