Federal prosecutors in Pennsylvania indicted four American men August 27 allegedly conspiring to buy Iranian crude oil for a Chinese refinery as part of a scheme to circumvent U.S. sanctions against the Islamic Republic.
Nicholas Hovan, 34, Daniel Ray Lane, 39, Robert Thwaites, 30, and Zhenyu Wang, 39, allegedly devised a plan to illegally buy the Iranian crude oil then ship it to China, through a secret vessel to vessel transfer, twice per month. They were expected to pocket $28 million profit per month. Each of the men was charged with conspiracy, violating the International Emergency Economic Powers Act (IEEPA), and money laundering.
"The defendants allegedly conspired to sell Iranian petroleum to a Chinese refinery to enrich themselves at the U.S. Iran sanctions regime's expense," said Assistant Attorney General for National Security, John C. Demers. "The defendants devised a scheme to use front companies, bribes, and false contractual documents to conceal their brazenly illicit activity. We will continue to leverage all of our tools to detect and prevent individuals such as these from engaging in actions that would have harmed this nation's national security," Mr. Demers stressed.
Washington dropped the Joint Comprehensive Plan of Action (JCPOA) or Tehran's 2015 nuclear deal with world powers in May 2018 and reimposed batches of devastating economic sanctions on the clergy-dominated Iran.
Since then, international organizations and oil tanker tracker companies say, Iran's oil exports fell from 2.5 million to less than 300,000 barrels per day (BPD), most of which went to China and Syria.
Nonetheless, an international tanker tracking firm, TankerTrackers.com, recently reported that Iran's oil exports are probably twice what international organizations and companies estimate.
One prevalent practice is to transfer oil between tankers on the high seas to conceal shipment of Iranian crude. Reports also maintain that Iran sells part of its oil to China as Malaysian and Indonesian crude.
The United States has so far added dozens of companies, tankers, and foreign nationals to its blacklist for violating Iranian oil sanctions.
According to the Department of Justice, the four indicted in Pennsylvania attempted to conceal the crude oil's origin by, among other things, bribing an official in the Chinese government.
Additionally, as part of their plan to launder their scheme's proceeds, the defendants tried to obtain Antigua passports to open Swiss bank accounts and launder their profit.
Prosecutors also alleged that the four plotted to launder the profits from the illicit sales through a series of shell entities and offshore financial accounts to prevent authorities from detecting the funds' origin.
"It doesn't get much lower than attempting to get rich by flouting the United States' national security interests," said U.S. Attorney for the Eastern District of Pennsylvania William M. McSwain.
"The defendants here allegedly jeopardized the United States' safety and security by scheming to get in bed with Iran and China. This type of conspiracy deserves the full condemnation of my office, and it has it," McSwain asserted.
According to the indictment, between May 2019 (when the United States suspended oil waivers for Iranian customers) until February 2020, the four conspired in Philadelphia and other areas to buy Iranian oil and sell it to China.
The report says the men were arrested in February 2020. The quartet had planned the monthly sale of two Iranian oil consignments.
The defendants face a maximum possible sentence of 45 years in jail and a $1.75 million fine.