Two Canadians, one Pakistani, a Briton and one Hong Kong citizen have been indicted for allegedly helping to run an international procurement network over a five-year period to traffic materials such as aircraft parts and satellite communications equipment to support Pakistan's nuclear program.
The US Department of Justice released a statement saying a grand jury "returned the indictment on Oct. 16, 2019," and it was "unsealed" on Wednesday, January 15.
“The defendants smuggled US-origin goods to entities that have been designated for years as threats to US national security for their ties to Pakistan’s weapons programs,” said Assistant Attorney General for National Security John C. Demers.
The US Department of Justice in a statement says all the five men were associated with the front company “Business World” in Rawalpindi, Pakistan.
The men included Muhammad Kamran Wali from Pakistan; Muhammad Ahsan Wali, and Haji Wali Muhammad Sheikh from Canada; Ashraf Khan Muhammad from Hong Kong; and Ahmed Waheed from the United Kingdom, who were indicted in a US federal court for conspiracy to violate the International Emergency Economic Powers Act and the Export Control Reform Act.
“This indictment puts the world on notice not to do business with these defendants and demonstrates our commitment to holding them accountable. It also stands as an example of the kind of deceptive behavior US businesses need to watch out for in designing appropriate export control and sanctions compliance programs,” the statement read.
According to the indictment, between September 2014 and October 2019, the defendants operated an international procurement network of front companies that existed to acquire US-origin goods for the Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission (PAEC) and to cause those goods to be exported from the United States to those entities without export licenses in violation of federal law.
Both AERO and PAEC were on the Commerce Department’s Entity List, which imposes export license requirements for organizations whose activities are found to be contrary to US national security or foreign policy interests.
PAEC was added to the Entity List in 1998.
AERO was added to the Entity List in 2014 after the US government found that it had used intermediaries and front companies to procure items for use in Pakistan’s cruise missile and strategic UAV programs.
According to the indictment, the defendants attempted to conceal the true destinations in Pakistan of the US-origin goods by using the conspirators’ network of front companies as the supposed purchasers and end-users of the goods and as the apparent source of payments for the goods, even though the goods were ultimately received in Pakistan and paid for by AERO or PAEC.
The statement read: The defendants caused the US companies to file export documents that falsely identified the ultimate consignees of the shipments as entities other than AERO and PAEC. The defendants never applied for or obtained an export license from the US Department of Commerce authorizing the export of goods to AERO or PAEC in Pakistan.
The indictment identified 38 separate exports from the US that the defendants initiated, involving 29 different companies from around the country. None of the US companies is alleged to have been complicit in the illegal exports, the report said.
Each defendant has been charged with two felony counts of conspiracy. Although arrest warrants are pending, none of the five defendants have been apprehended.