The Manhattan district attorney's office has smashed a sinister plot to smuggle nuclear weapons materials to Iran through unwitting New York banks, the Daily News has learned.Expect those involved to claim that these are dual-use materials and that they are not meant for Iran's nuclear program, but the fact that all of these materials were involved suggests that they were for Iran's nuclear weapons program.
Officials plan to unseal a 118-count indictment Tuesday accusing a Chinese national of setting up a handful of fake companies to hide that he was selling millions of dollars in potential nuclear materials to Tehran.
"This case will cut off a major source of supply to Iran and it shows how they are going ahead full steam to get a nuclear bomb. Long-range missiles they pretty much have already," a law enforcement source close to the case said.
"We think it is one of the largest suppliers of weapons of mass destruction to Iran."
Experts say Iran, under the leadership of President Mahmoud Ahmadinejad, appears close to amassing enough nuclear material to make an atom bomb. A United Nations embargo bans Iran from acquiring the high-tech metals needed to make a long-range nuclear weapon a reality.
The indictment will outline the financial conspiracy behind 58 different transactions, including shipments of various banned materials from China to Iran between 2006 and late 2008.
* 33,000 pounds of a specialized aluminum alloy used almost exclusively in long-range missile production.
* 66,000 pounds of tungsten copper plate, which is used in missile guidance systems.
* 53,900 pounds of maraging steel rods, a superhard metal used in uranium enrichment and to make the casings for nuclear bombs.
The recipient is believed to have been a subsidiary of the Iranian Defense Ministry.
The suspect, who is not believed to be in the U.S., set up four bogus import-export companies that did business with six Iranian shell firms, one source said.
"They took elaborate steps to conceal the identity of the shipper and the recipient," the source said.
The deals went through "several" New York banks, which cooperated when the alleged plot was uncovered.
"The New York banks were completely unaware," the source said.
Iran has long sought nuclear weapons and the technologies to use them against Iran's far-flung enemies, whether it is the US, Israel, or various Muslim countries in the Middle East. Iran has been working on developing long range missiles, and has been developing enrichment technologies and built thousands of advanced centrifuges to separate and refine uranium into materials suitable for nuclear weapons.
The District Attorney's office has issued a press release and the full indictment. The press release notes the following:
In June 2006, the United States Department of the Treasury, Office of Foreign Assets Control (OFAC) sanctioned LIMMT for its support of and role in the proliferation of weapons of mass destruction (WMD) to Iran. As a result of the sanctions, LIMMT was banned from engaging in transactions with or through the U.S. financial system, and remains banned to this day. Subsequently, LI FANG WEI and LIMMT used alias names and shell companies to continue LIMMT’s international business. LI FANG WEI and LIMMT’s purpose in doing so was to use fraud and deception to gain access to the U.S. financial system, to deceive U.S. and international authorities, and to continue the proliferation of banned weapons material to the Iranian military. The aliases presented above and charged in the indictment were some of the names employed by LIMMT in its fraudulent scheme.UPDATE:
The indictment charges that during the period from November 2006 through September 2008, LIMMT sent and received dozens of illegal payments through U.S. banks by using aliases and shell companies. Because LIMMT was banned from transacting with U.S. banks, any transfers sent in its real name would have been blocked by the U.S. banks. U.S. banks employ sophisticated anti-fraud and anti-money laundering computer systems to detect illegal payments from sanctioned entities and people. By substituting aliases in the place of its true name, LIMMT deceived U.S. banks into processing its transactions. The result was the falsification of the records of banks located in Manhattan relating to dozens of illegal transactions.
Mr. Morgenthau said, “Our banks have high standards and sophisticated systems to stop these transactions, but this conduct was specifically designed to defeat their systems.”
Mr. Morgenthau noted the parallels between this investigation and his Office’s ongoing investigation into “stripping,” as announced in the recent $350 million settlement with Lloyds TSB Bank of the United Kingdom. Like that investigation, the investigation of LI FANG WEI and LIMMT presents an example of the use of fraud and deceit to access the world’s financial systems, including banks in Manhattan.
LIMMT conducted its non-military commercial business primarily with U.S. dollar payments. These payments were processed, or “cleared,” by U.S. banks. These payments, although from non-military customers, were nonetheless illegal under U.S. law because of LIMMT’s status as a proliferator of WMD. LIMMT’s Iranian military shipments were paid for primarily in Euros. For all of these payments, from both the Iranian military subsidiaries and LIMMT’s commercial customers, LIMMT used its alias names to complete the transactions.
In all of LIMMT’s transactions, the wire payments were sent to and from a limited number of Chinese banks that handled the accounts of LIMMT’s front companies. The investigation into the role of the stripping banks and the Chinese banks continues. Mr. Morgenthau said, “Banks that provide access to the world’s financial systems to criminals, proliferators and terrorists should expect that they will be found out and prosecuted. Sanctions are effective only if they are enforced. We may not be able to shut down Mr. LI’s factories, but we can shine a spotlight on his conduct and the conduct of the foreign banks that permit these types of operations to flourish.”
As Hot Air notes, this undermines the NIE that claimed that Iran was no longer working on its nuclear program. It also undermines the credibility of the intelligence community that doesn't seem to have a firm grasp of Iran's intentions.