Five Charged for Conspiracy to Sell Sanctioned Iranian Oil to Chinese Refinery

February 12, 2020 Updated: February 12, 2020

Five people were arrested and charged for conspiring to sell sanctioned Iranian oil to a refinery in China, the U.S. Department of Justice (DOJ) said on Feb. 11.

The complaint accuses four Texans and one New Yorker of conspiring from July 2019 to February 2020 to purchase oil from Iran, in violation of U.S. economic sanctions against the country, then sell it to a Chinese buyer “for great profit,” the DOJ said in a press release.

The defendants planned two shipments of oil per month, the complaint said.

Each defendant was charged with one count of conspiracy and one count of violating the International Emergency Economic Powers Act (IEEPA).

“With the goal of illegally enriching themselves, the defendants conspired for over eight months to devise a scheme to violate U.S. sanctions imposed on Iran, particularly the ban on foreign oil sales,” U.S. Assistant Attorney General for National Security John C. Demers said in a statement.

“The sale of oil is the lifeblood of the Iranian economy. At the same time the United States was increasing its sanctions in order to pressure Iran to stop its malign activities, these defendants put greed ahead of country.”

China is the world’s biggest importer of Iranian oil despite the Trump administration reimposing sanctions on Tehran’s petroleum exports in 2018 after withdrawing the United States from the 2015 Iran nuclear deal between Tehran and six world powers.

President Donald Trump hopes the sanctions will also pressure Tehran into limiting its ballistic missile program and backing of terrorist groups across the Middle East.

Chinese customs data released in late January showed that China took in 14.77 million tonnes, or 295,400 barrels per day, of Iranian oil in 2019—about half the imports of 2018.

Prosecutors said the defendants—Nicholas Hovan of New York, James Fuchs and Robert Thwaites of Dallas, Texas, and Daniel Ray Lane of McKinney, Texas—arranged to buy the oil and sell it to a refinery represented by defendant Zhenyu Wang, known as “Bill Wang,” of Dallas, Texas.

The complaint alleges that the defendants planned to use a Polish shell company as a straw seller of the sanctioned oil. Lane offered to launder the profits through his company, STACK Royalties, it added.

Prosecutors also allege defendants Fuchs and Thwaits agreed to apply for foreign passports to set up offshore accounts to avoid reporting to U.S. authorities.

The defendants each face up to 25 years in prison, and a maximum fine of $1.25 million if convicted.

Reuters contributed to this report. 

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