Friday, October 28, 2016
Zavik Zargarian, 52, of Glendale, California, and Vache Nayirian, 57, of Lakeview Terrace, California, were arrested Wednesday morning on federal charges for their alleged role in a scheme to smuggle millions of dollars’ worth of military aircraft parts and other potential defense items to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Eileen M. Decker for the Central District of California and Special Agent in Charge Joseph Macias for Homeland Security Investigations (HSI) in Los Angeles made the announcement
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The defendants were taken into custody by special agents of U.S. Immigration and Customs Enforcement’s HSI. The men are among five defendants charged in a nine-count federal indictment unsealed Wednesday that alleges a conspiracy to purchase and ship more than $3 million dollars’
worth of jet fighter aircraft parts to Iran. Additionally, several of the defendants are accused of buying and illegally exporting fluorocarbon rubber O-rings to Iran. The O-rings in question have a variety of possible military applications, including use in aircraft hydraulic systems and landing gear. Also named in the indictment are Zargarian’s Glendale-based company, ZNC Engineering, and two Iranian nationals, Hanri Terminassian, 55, and Hormoz Nowrouz, 56, both of whom are believed to be in Iran.
The charges stem from a lengthy undercover probe spearheaded by HSI, with substantial assistance provided by the Defense Criminal Investigative Service and U.S. Customs and Border Protection (CBP).
“Our commitment to prosecuting individuals who engage in the unlawful proliferation and export of items with military applications remains steadfast,” said Acting Assistant Attorney General McCord. “The actions announced today are part of our ongoing effort to enforce export laws that continue to play a critical role in maintaining and protecting U.S. national security.”
"The crimes charged in this indictment are very serious threats to our national security," said U.S. Attorney Decker. "As a nation it is vital that we protect our military technology and prevent it from getting into the hands of other countries without proper authorization."
According to the indictment, Terminassian originally contacted Zargarian from Iran for assistance with obtaining military aircraft parts from U.S.-based suppliers. Subsequently, Zargarian negotiated on Terminassian’s behalf to purchase the desired items from an undercover HSI special agent who was posing as a parts supplier. The items included parts used in F-14, F-15, F-16 and F-18 fighter jets. Eventually, Terminassian traveled to the U.S. to meet with Zargarian and the undercover special agent to discuss the transaction. The indictment alleges the two men sought to purchase between 10 and 30 units of each item, with the total cost potentially exceeding $3.6 million.
“One of HSI’s top enforcement priorities is preventing sensitive articles like those in this case from falling into the hands of individuals or nations that might seek to harm America or its interests,” said Special Agent in Charge Macias. “The illicit trade of these kinds of items to countries that have repeatedly violated our export laws must be controlled. Given what’s at stake, HSI will continue to work closely with our law enforcement partners to combat this threat and hold the perpetrators accountable for putting the U.S. at risk.”
The indictment also accuses Zargarian and Nayirian of conspiring with Terminassian and Nowrouz to export fluorocarbon rubber O-rings to Iran. The indictment alleges Terminassian contacted Nayirian and Zargarian on behalf of Nowrouz and sought their help to obtain the parts. Terminassian transferred funds for the purchase to Nayirian, who later provided the money to Zargarian. Through his company ZNC Engineering, Zargarian bought the O-rings from a California vendor and provided them to Nayirian. Nayirian then exported the O-rings to addresses in the United Arab Emirates and Kuwait provided by Terminassian, who subsequently arranged for them to be transshipped to Iran. According to the indictment, the defendants exported more than 7,000 O-rings to Iran over the course of the conspiracy.
To reduce the likelihood of detection, the defendants falsely claimed on shipping documents that the O-rings were destined for countries other than Iran and substantially undervalued them to avoid having to file export forms that might prompt further inspection by CBP. As part of their probe, investigators obtained evidence that the O-rings were intended for the Iranian Air Force.
Zargarian and Nayirian were arraigned on the indictment in federal court on Wednesday afternoon. Both men entered not guilty pleas, and a trial was set for December 20 before U.S. District Judge S. James Otero.
Defendant Zargarian faces a statutory maximum sentence of 115 years in federal prison and a $4,770,000 fine. Defendant Nayirian faces a statutory maximum sentence of 95 years in federal prison and a $3,770,000 fine. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of a defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The U.S. embargo on Iran, which is enforced through the IEEPA and the ITSR, prohibits the export of goods, technology, and services to Iran with very limited exceptions.
The prosecution is being handled by Assistant U.S. Attorney Mark Takla for the Central District of California and Trial Attorney Christian Ford of the National Security Division’s Counterintelligence and Export Control Section.
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