Iranian, Chinese Charged by US With Illegally Supplying Drone Technology to Tehran

The Department of Justice building in Washington on Feb. 9, 2022. (Stefani Reynolds/AFP via Getty Images)

An Iranian and a Chinese national have been charged in a scheme to illegally supply U.S.-made drone components to Iran, according to the Department of Justice.

Iranian national Hossein Hatefi Ardakani and Chinese national Gary Lam are accused in the scheme that spanned from at least September 2014 to September 2015, the DOJ said in an indictment unsealed on Dec. 19. Mr. Lam, also known as Lin Jinghe, was based in Hong Kong and China during that period.

The drone components were intended for use in the drone program of the Iranian terrorist organization Islamic Revolutionary Guard Corps, according to the DOJ.

“Today’s announcements show that we remain focused on disrupting the efforts of Iran and its agents to circumvent U.S. sanctions in support of Iran’s weapons programs, including its drone program, which have been used to support and supply terrorist organizations and other foreign adversaries—such as Russia—around the globe,” U.S. Attorney Matthew M. Graves said in a statement.

The latest criminal case is part of the broader issues involving the close ties between Tehran and the Chinese Communist Party (CCP) and the current and past U.S. administrations’ Iran policy. Earlier this month, a group of Republican senators introduced legislation that focuses on weakening the two authoritarian regimes’ relationship.

Mr. Ardakani and Mr. Lam allegedly conspired to buy dual-use microelectronics that are commonly used in the production of unmanned aerial vehicles (UAV) during the one-year period, according to prosecutors. The microelectronics included high electron mobility transistors, monolithic microwave integrated circuits, power amplifiers, and analog-to-digital converters—each of which are subjected to U.S. export controls for reasons that include anti-terrorism and national security.

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Dual-use devices can be used for military and civilian purposes. For example, high electron mobility transistors are found in hybrid electric vehicles and advanced radar systems.

“U.S. technology has zero place in Iranian UAVs,” Matthew Axelrod, assistant secretary for export enforcement at the U.S. Department of Commerce’s Bureau of Industry and Security, said in a statement.

“As these allegations demonstrate, those who procure dual-use microelectronics for the Islamic Revolutionary Guard Corps will be held accountable.”

‘Web of Front Companies’

Mr. Ardakani and his co-conspirators had allegedly “crafted a sophisticated web of front companies” to obscure their illicit activities, according to Michael Krol, special agent in charge at Homeland Security Investigations New England.

On four separate occasions, Mr. Ardakani and his co-conspirators allegedly used “a web of foreign companies” to conceal their activities, according to the DOJ. In one instance, Mr. Ardakani and Mr. Lam “caused an unwitting French company to purchase from a U.S. company several pieces of analog-to-digital converters.” The converters had many applications, including broadband communications and radar and satellite subsystems, according to the DOJ.

Mr. Lam then had converters shipped to Hong Kong, and the items were reshipped to Iran.

“A variation of this tactic—involving witting and unwitting companies in Canada, Hong Kong, and China—was used on the other three occasions,” the DOJ stated.

Mr. Ardakani and Mr. Lam are charged with unlawfully exporting and attempting to export goods to Iran and conspiracy to engage in international money laundering, each carrying a maximum penalty of 20 years in prison, according to the DOJ. They face a third charge of conspiracy to export U.S. goods to Iran and to defraud the United States, and if convicted, they could face up to five years in prison.

Mr. Ardakani and Mr. Lam remain at large and are suspected to be living abroad, according to the DOJ.

Separately, the Treasury Department announced on Dec. 19 that it was imposing sanctions on an international procurement network of 10 entities led by Mr. Ardakani, as well as four individuals based in Iran, Malaysia, Hong Kong, and Indonesia. The network has allegedly “facilitated the procurement of U.S.- and foreign-origin components worth hundreds of thousands of dollars” for the Islamic Revolutionary Guard Corps’s drone program,” according to the Treasury Department.

Mr. Lam was among a group of 11 individuals, eight entities, and one cargo vessel sanctioned by the Treasury Department in October for enabling Iran’s ballistic missile and drone programs.

Mr. Lam used his Hong Kong-based company Nanxigu Technology to procure “U.S.-, Japanese-, Swiss-, Taiwanese-, and UK-origin, dual-use circulators, amplifiers, inductors, and other electronic components” for Iran-based procurement agent Alireza Matinkia, according to the Treasury Department.

Mr. Ardakani and Mr. Lam couldn’t be reached for comment.