On May 20, 2014, Pennsylvania businessman Helmut Oertmann pleaded guilty to attempting to ship a horizontal lathe (also known as a bar peeling machine or “peeler”) to Iran via Dubai without obtaining a necessary license from the U.S. Commerce Department. These machines are used, among other things, in the production of high-grade steel for aircraft. Oertmann, 76, is the CEO of Hetran, Inc., an engineering and manufacturing firm incorporated in New York and located in Orwigsburg, Pennsylvania. Oertmann received a sentence of twelve months’ probation from U.S. District Court Judge Yvette Kane on December 3, 2014. He and his company were fined $337,500, while an additional penalty of $500,000 was suspended by the judge for two years and will be waived if neither Oertmann nor Hetran commit further violations during that period.
According to court documents, in June 2009 Hetran was contacted by both FIMCO FZE, an Iranian company with offices in Iran and the United Arab Emirates (UAE), as well as Crescent International Trade and Services FZE, an affiliated company based in the UAE. FIMCO describes itself as working in the oil, gas, and petrochemical industries. In 2009, FIMCO representatives sought a price quote for the peeler from Hetran. A group of Hetran employees then traveled to Dubai in mid-June 2009 to meet with Iranian representatives of FIMCO and Crescent. During this meeting, the Iranian representatives told Hetran that they intended to buy the peeler and transship it to Iran via Dubai. Given the U.S. embargo against Iran, Hetran employees suggested handling the transaction through the company’s Indian or German offices, with non-U.S. personnel providing the necessary training.
About a week after this meeting, Oertmann met with Suniel Malhotra, a sales at Hetran India. The two agreed that a Dubai company would be listed as the end-user for the peeler and that the purchasers could then “do with it what they want.” Oertmann also directed that the contract for the order should be executed through Hetran India rather than the company’s Pennsylvania headquarters. Discussion about how to disguise the end use destination continued between 2009 and 2012, while the peeler was being built. In July 2011, Crescent issued a purchase order for the peeler in the amount of $895,000.
In June 2012, Hetran attempted to export the peeler from Pennsylvania to the UAE with Crescent International in Dubai falsely identified as the machine’s end-user. However, the peeler was reportedly intercepted by authorities and returned to Hetran, which apparently later sold it to a Russian firm.
A 2012 indictment against the Iranian individuals involved in this scheme was unsealed at the time that charges were filed against Oertmann. These defendants are Khosrow Kasraei, a FIMCO manager; Mujahid Ali, FIMCO’s financial manager; and Reza Ghoreishi, a FIMCO senior sales engineer. All three men are charged with conspiring to violate U.S. export laws and could receive up to 10 years imprisonment and a fine of up to $250,000. Their corporations could also be fined $1 million each.
Helmut Oertmann could have faced up to 10 years in prison and a fine of $250,000, while Hetran Inc. could have been fined up to $1 million.
Suniel Malhotra, Hetran’s sales representative in India, was initially also a defendant in this case, but the charges against him were dropped in 2013.
Sources:
[1] Amended Information, United States of America v. Helmut Oertmann and Hetran, Inc., Case Number 1:14-cr-00111-YK, U.S. District Court, Middle District of Pennsylvania, May 21, 2014.
[2] “Schuylkill County Firm and Chief Officer Charged with Shipping Machinery to Iran In Violation of U.S. Export License Requirements,” Press Release, U.S. Department of Justice, April 23, 2014.
[3] Tom Fontaine, “Pa. Men To Plead Guilty to Smuggling Equipment to Middle East,” Pittsburgh Tribune-Review, April 23, 2014.
[4] Indictment, United States of America v. Mujahid Ali, Khosrow Kasraei, Reza Ghoreishi, FIMCO FZE, Crescent International Trade and Services FZE, and Suniel Malhotra, Case Number 1:12-cr-00306-YK, U.S. District Court, Middle District of Pennsylvania, December 5, 2012.
[5] “Chief Officer of Engineering Firm Sentenced for Attempted Illegal Shipment to Iran,” Press Release, U.S. Department of Justice, December 3, 2014.
Related Library Documents: