Telecommunications Consultant Pleads Guilty to Sanctions Violation on Iran

Farhad Nafeiy, a 70-year-old telecommunications consultant from Alamo, California, has entered a guilty plea in the Northern District of California, admitting to violating the International Emergency Economic Powers Act (IEEPA) concerning sanctions on Iran.

The IEEPA grants the President of the United States the authority to address unusual and extraordinary threats to the national security, foreign policy, or economy of the United States. In response to this authority, the President has issued orders prohibiting certain activities and transactions with Iran and its government. The U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) has implemented these orders through regulations known as the Iranian Transactions and Sanctions Regulations (ITSR). These sanctions generally forbid exporting U.S.-origin products to Iran and providing services to Iran, among other restrictions.

Court documents reveal that Nafeiy secured licenses or approvals from OFAC to provide guidance to non-Iranian telecommunications companies on conducting business with Iran. However, these licenses did not authorize Nafeiy to directly supply hardware, software, or technology to Iran. Nafeiy acknowledged exceeding the scope of his OFAC licenses, thereby breaching the ITSR and IEEPA, by directly delivering software upgrades to telecommunications equipment within Iran. In his plea agreement, Nafeiy further admitted that the total sales of such software upgrades to Iran amounted to approximately $400,000. Additionally, he was charged with and admitted to evading federal income taxes, specifically failing to pay income tax on some of the proceeds generated from these sales.

On August 10, Nafeiy was charged with one count of violating IEEPA and one count of tax evasion. His sentencing is scheduled before the Honorable Aracelli Martínez-Olguín on January 29, 2024.

The investigation into this case was conducted by Homeland Security Investigations and the IRS-Criminal Investigation.

Nafeiy's guilty plea underscores the importance of compliance with U.S. sanctions laws and regulations, as well as the serious consequences of violating these laws. The case serves as a reminder of the U.S. government's commitment to enforcing sanctions and ensuring national security interests are protected.