U.S. indicts Iranian, Chinese for nuclear export plot

WASHINGTON Sat Jul 14, 2012 4:05am IST

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WASHINGTON (Reuters) - U.S. investigators believe two men indicted on charges of conspiring to send materials to Iran via Hong Kong and China were trying to acquire sensitive equipment and materials used to construct uranium enrichment centrifuges, a law enforcement official said on Friday.

The materials and components the suspects were trying to obtain comprised almost "everything you need to build gas centrifuges for uranium enrichment," the official told Reuters.

At least some of the materials the suspects, Parviz Khaki, an Iranian, and Zhongcheng Yi, a resident of China, sought were eventually delivered to purchasers in Iran, the official said. But U.S. investigators are unsure exactly how much of the material ordered by the two men made it to Iran.

A federal grand jury has indicted the two men on charges of conspiring to send materials from the United States to Iran that could be used in an Iranian nuclear program, the Justice Department said on Friday. It said Khaki had been arrested in May in the Philippines, while Yi remains at large.

U.S. investigators believe the case demonstrates China and Hong Kong have now become key bases for middlemen used by Iran to evade U.S. and other western sanctions designed to restrict the sale of nuclear-related technology to Iran.

The U.S. law enforcement official added, however, that there was no evidence the Chinese government had been aware of, or sanctioned, the alleged technology transfers.

Using front companies, the Justice Department said in a press release, Khaki and Yi tried to buy specialized equipment and raw materials used to build the kind of centrifuges that Iran is currently using to enrich uranium for what it says are peaceful purposes.

Those kinds of centrifuges can be used to enrich uranium isotopes to weapons grade. U.S. and allied intelligence agencies believe Iran's Supreme Leader, Ayatollah Ali Khamenei, has not yet given the order to begin weapons-grade enrichment or build a nuclear bomb.

IRAN'S PROCUREMENT NETWORK

Among sensitive items the federal indictment accused the men of seeking to acquire were 20 tons of maraging steel, 40 tons of aluminum alloys, mass spectrometers and vacuum pumps.

At one point, said an official, one suspect emailed the other complaining about the quality of a Chinese alloy that was being purchased. The suspect insisted the material they acquired had to be made in America, said the official.

The indictment said the men succeeded in illegally exporting lathes and nickel-alloy wire from the United States to China and then to Iran around June 2009, according to the indictment filed by the Justice Department.

It said the men purchased the materials from U.S. companies without divulging the ultimate destination. They also did not have export licenses required for shipments to countries such as Iran that are under U.S. sanctions.

At least some attempts to obtain materials failed, the indictment says.

Khaki allegedly began talking with an undercover U.S. federal agent in 2009, including in emails in which he tried to acquire radioactive source material. The emails continued into 2011, the indictment says.

Lisa Monaco, assistant attorney general for national security, said the indictment "sheds light on the reach of Iran's illegal procurement networks and the importance of keeping U.S. nuclear-related materials from being exploited by Iran."

"Iranian procurement networks continue to target U.S. and Western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe," Monaco said in a statement.

The 24-page indictment was handed up by a grand jury in Washington on Thursday and released on Friday. It does not name the U.S. companies that Khaki and Yi allegedly approached.

(Reporting by David Ingram and Mark Hosenball; editing by Jackie Frank and Todd Eastham)

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