- International Enforcement Actions
In the face of tightening U.S. sanctions, Iranian smugglers will likely increase their reliance on several well-worn tactics to acquire American-manufactured products and circumvent trade barriers. Two recent cases pursued by the U.S. Department of Justice against American citizens and their accomplices in Iran demonstrate how Iranian companies employ an effective combination of American brokers, Middle Eastern front companies and freight forwarders, and bank accounts worldwide to obtain goods from the United States.
In one plot, a company in New Hampshire shipped military surplus from a contractor for the U.S. Department of Defense to an Iranian customer by funneling the goods through a Turkish freight forwarder, then taking payments through bank accounts registered in Asian and European tax havens. In the other scheme, a wholesaler in New Jersey sent American-made components for airplanes to freight forwarders in locations throughout the Middle East, enabling a network of Iranian and Turkish front companies to move the items to Iran. Both transactions involved the flow of millions in dollars and merchandise between Iran and the United States.
Aiden Davidson and Babazadeh Trading Company
The first conspiracy centered on Aiden Davidson, an Iranian–American dual citizen who changed his name from Hamed Aliabadi after immigrating to the United States. He used Golden Gate International LLC, a New Hampshire-based company that he formed in 2013, to obtain American military surplus for Babazadeh Trading Company in Tehran. Babazadeh, also known as Babazadeh Hydraulic Trading Group, is a supplier of hydraulic motors and pumps. After buying items requested by Babazadeh, Golden Gate shipped them to Iran through a Turkish front company, the Igdir-based freight forwarder Stare Lojistik Enerji Sanayi Ticaret. Davidson’s scheme lasted from March 2014 to February 2017.
Employing a freight forwarder based in Savannah, Georgia, Davidson listed Stare as the consignee for Golden Gate’s shipments abroad when, in fact, the goods traveled from Turkey to Babazadeh in Iran. Some of the goods appear to have included 2,700 items of military surplus that Golden Gate purchased from the U.S. Department of Defense. A criminal complaint on August 31, 2018, described seven shipments to Babazadeh, all of which listed Stare as the consignee. The contents of these shipments ranged from engines and motors to filters, pumps, and valves. Some of the more sensitive military surplus allegedly purchased by Davidson fell within the Commerce Control List. However, the criminal complaint did not specify whether these items reached Iran. Babazadeh reimbursed Golden Gate through bank accounts in Armenia, Cyprus, and Hong Kong. Between 2013 and 2017, Davidson received over $1 million from Babazadeh and other foreign companies not named in the criminal complaint.
Following the criminal complaint, American authorities arrested Davidson on September 2, 2018. A grand jury then indicted him for violating the International Emergency Economic Powers Act (IEEPA) on October 17, 2018, and a superseding indictment on January 9, 2019, charged Davidson and Babazadeh with money laundering and smuggling. His trial will begin on July 9, 2019, in New Hampshire.
Joyce Marie Eliabachus and Peyman Amiri Larijani
The second conspiracy concerned Joyce Marie Eliabachus, an American citizen and the chief executive of Edsun Equipments LLC, a New Jersey-based company that she formed in 2014. In collaboration with Peyman Amiri Larijani, an Iranian national with ties to half a dozen Iranian and Turkish companies specializing in aviation and engineering, she used Edsun Equipments to acquire components for Iranian airlines—including the U.S.-sanctioned Caspian Airlines, Kish Air, Mahan Air Company, and Ukrainian–Mediterranean Airlines—by hiding the identities of the Iranian end users from American suppliers and transferring the shipments through several Emirati and Turkish front companies. Between 2014 and 2018, Eliabachus sent Larijani $2 million worth of parts for aircraft.
Eliabachus concealed the shipments to Iran by falsifying their ultimate destination. She hired American freight forwarders to ship the products to Emirati and Turkish front companies, which she described as the final consignees even though they in fact relayed the shipments to Larijani. This arrangement allowed Larijani to move the goods from Turkey and the United Arab Emirates to Iran through his network of companies. Larijani then paid Eliabachus through Turkish bank accounts held in his companies’ names, transferring over $5 million to Edsun Equipment from January 2014 to January 2018.
A criminal complaint filed against Larijani on June 3, 2019, described three of Eliabachus’ shipments, all of which traveled through Turkey or the UAE on their way to Iran. They included products such as brake assembly parts sent through the Turkish freight forwarder Reibel Tasimacilik Ve Tic A.S., 23 unique parts for aircraft sent through the Emirati freight forwarder Parthia Cargo, and rotor assemblies, cerametallic linings, and plate stators sent through Reibel.
A pair of indictments unsealed in early June speaks to Larijani’s yearslong efforts to acquire products from the United States for Iranian aircraft alongside his American accomplice. A grand jury indicted him for money laundering, violating IEEPA, and other crimes on April 22, 2015, followed by a more expansive indictment on October 6, 2016. After the filing of a criminal complaint on April 23, 2018, American authorities arrested Eliabachus on April 25, 2018, and she pleaded guilty on June 11, 2019. Larijani resides in Iran and remains at large.
Iranian companies seeking U.S. technology with military applications will likely copy the model applied with such success by Babazadeh and Larijani: contracting American intermediaries to facilitate procurement, then obscuring payments and shipments with bank accounts and freight forwarders scattered across the globe.
Criminal Complaint against Aiden Davidson, U.S. District Court for the District of New Hampshire, August 31, 2018, available at https://www.iranwatch.org/library/governments/united-states/executive-branch/department-homeland-security/criminal-complaint-against-aiden-davidson.
Indictment of Aiden Davidson, U.S. District Court for the District of New Hampshire, October 17, 2018, available at https://www.iranwatch.org/library/governments/united-states/judicial-branch/indictment-aiden-davidson.
Superseding Indictment of Aiden Davidson and Babazadeh Trading Company, U.S. District Court for the District of New Hampshire, January 9, 2019, available at https://www.iranwatch.org/library/governments/united-states/judicial-branch/superseding-indictment-aiden-davidson-babazadeh-trading-company.
Indictment of Peyman Amiri Larijani, U.S. District Court for the District of Columbia, April 22, 2015, available at https://www.iranwatch.org/library/governments/united-states/judicial-branch/indictment-peyman-amiri-larijani-april-22-2015.
Indictment of Peyman Amiri Larijani, U.S. District Court for the District of Columbia, October 6, 2016, available at https://www.iranwatch.org/library/governments/united-states/judicial-branch/indictment-peyman-amiri-larijani-october-6-2016.
Criminal Complaint against Joyce Marie Eliabachus, U.S. District Court for the District of New Jersey, April 23, 2018, available at https://www.iranwatch.org/library/governments/united-states/executive-branch/department-homeland-security/criminal-complaint-against-joyce-marie-eliabachus.
Criminal Complaint against Peyman Amiri Larijani, U.S. District Court for the District of New Jersey, June 3, 2019, available at https://www.iranwatch.org/library/governments/united-states/executive-branch/department-commerce/criminal-complaint-against-peyman-amiri-larijani.
Information on Joyce Marie Eliabachus, U.S. District Court for the District of New Jersey, June 11, 2019, available at https://www.iranwatch.org/library/governments/united-states/executive-branch/department-justice/information-joyce-marie-eliabachus.
“Morris County Woman Admits Conspiring with Iranian National to Illegally Export Aircraft Components to Iran,” Press Release, U.S. Department of Justice, June 11, 2019, available at https://www.iranwatch.org/library/governments/united-states/executive-branch/department-justice/morris-county-woman-admits-conspiring-iranian-national-illegally-export-aircraft.