Where Industry and Security Intersect
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For
Immediate Release: Sep 23, 2004 Contact - BIS Public Affairs 202-482-2721 |
The U.S. Department of Commerce today announced that Ebara International Corporation (EIC) of Sparks, Nevada, has agreed to a $121,000 civil penalty and to the imposition of a three-year suspended denial of export privileges to settle charges arising from the transfer of certain pumps to Iran and actions taken to conceal the illegal transfer. The exports were made in violation of the Export Administration Regulations (EAR). EIC is a wholly-owned subsidiary of Ebara Corporation, which is headquartered in Tokyo, Japan.
In a related criminal case, EIC pled guilty on September 23, 2004, to seven felonies, including conspiracy, unauthorized exports in violation of the International Emergency Economic Powers Act, and money laundering. EIC agreed to pay a $6.3 million criminal fine and to three years of corporate probation for its role in the illegal sales and exports to Iran. Assistant Secretary of Commerce for Export Enforcement Julie L. Myers commented, “Parties that choose to export to embargoed destinations, such as Iran, and violate export control laws, will be prosecuted and sanctioned to the fullest extent of the law. As this case demonstrates, the result will prove very costly, monetarily and otherwise, to all those involved.”
Everett Hylton, EIC’s founder and former Chief Executive Officer, agreed to a $99,000 civil penalty and the imposition of a three-year suspended denial of export privileges to settle administrative charges brought against him by BIS in connection with EIC’s exports to Iran. In a related criminal case, Hylton pled guilty to conspiracy to make false statements and agreed to a $10,000 criminal fine, and three years of probation.
The Commerce Department’s Bureau of Industry and Security (BIS) charged that EIC and Hylton violated the EAR by conspiring with others to export cryogenic in-tank submersible pumps to Iran without the required U.S. Government authorization and evading the requirements of the EAR by participating in actions to conceal the illegal exports. Specifically, EIC, Hylton and their co-conspirators devised and employed a scheme under which EIC sold the pumps to a co-conspirator in France, who then forwarded the pumps to Iran. BIS further charged that to conceal the illegal exports, EIC and Hylton participated in the falsification of documents showing the pumps were destined for Iran, the creation of documents stating the ultimate destination was France, and the failure to mark parts for the pump with EIC identification stamps.
The United States maintains a comprehensive trade embargo prohibiting U.S. exports to Iran. Cryogenic in-tank submersible pumps are subject to the EAR and are controlled by the Department for export for antiterrorism reasons. Exports to Iran are prohibited unless they are authorized in advance by Department of the Treasury’s Office of Foreign Asset Controls (OFAC). The export of items to embargoed countries without approval is a violation of the Export Administration Regulations (EAR) and is subject to criminal penalties and administrative sanctions.
Assistant Secretary Myers commended BIS’s San Jose Field Office, and especially Special Agent David Severson, for their efforts in the investigation.