My father-in-law recently passed along a link to a piece his law firm, Ballard Spahr Andrews & Ingersoll, LLP recently published about a 118 count indictment filed by the Manhattan District Attorney against a businessman and two of his Chinese companies that fraudulently used New York banks to finance highly sensitive goods to Iran.
According to the Epoch Times: Some of the materials included specialized aluminum alloy used in long range missile production, graphite cylinders used for banned electrical discharge machines, and other materials. As someone who traded in semi-finished aluminum materials for several years, we suspect the metal material in question involves extruded fin profiles. Obscure stuff for sure, with a very limited supply base.
Unfortunately, it still remains a relatively simple process to engage in such nefarious activities, even with few suppliers. Essentially sensitive materials can change hands on the basis of three key activities within the purchase transaction. First, the paper trail starts with request for quotations for materials that could be used in other applications. For example, certain metal sections could be given an end use for say a sugar plant (instead of a nuclear centrifuge). The ultimate destination for the goods will not be apparent in the quotation process. Second, plenty of trans-shipments occur in the process with multiple buyers and sellers. So the goods may come from Russia, be trans-shipped to India, and then sold into Iran. Finally, the money trail involves a long train of letters of credit and payment that move from party to party and bank to bank. This article explains what happened in this case. And if MetalMiner doesn’t work out for me, I’ll look into forensic accounting!
With the growth of weapons technology, Ballard Spahr recommends any company selling metals or other raw materials overseas to make sure to know the end customer and comply with US export laws and regulations. In the meantime, let’s hope the Manhattan District Attorney has his eyes on all these strange looking banking transactions.