A Las Vegas woman has been indicted by a federal grand jury for conspiracy to export goods from the United States to Iran, in violation of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations. According to the indictment unsealed recently, Tina Chen, 47 — aka Ya When Chen, Wen Tina Chen, Tina Dunbar, and Tina Dubner — is the owner of Top One Zone, LLC, a company exporting electronic and computer components that Chen operates from her residence. As alleged, from about November 2015 to May 2019, Chen conspired with others to buy and export goods from companies in the United States, and then send those goods to individuals in Iran through companies in Hong Kong. Chen concealed the identities of the end users, and she did not have a license from OFAC. Chen is charged with one count of conspiracy to unlawfully export goods to Iran.
According to the allegations in the indictment, Chen engaged in numerous overt acts of conspiracy including:
- Emailing co-conspirators about her plans
- Submitting a Customer End-User Certificate to a U.S. company that falsely stated that Chen was purchasing goods for export to an end user (a Hong Kong university) and falsely certified that the purchased goods would not be sold to a restricted country without obtaining the required government approval
- Submitting a revised End-User Certificate to a U.S. company that falsely stated that the goods would be used for a startup application in Hong Kong and would not be sold to a restricted country without obtaining the required government approval
- Producing fake invoices to substantiate false motives
Specifically Chen worked with her co-conspirator to create fake invoices that intentionally misidentified the end-user. While the actual end-user for a particular shipment was a university in Iran, the invoice listed the end-user in Hong Kong. This was all in writing via emails. Similarly, for another shipment, the co-conspirator emailed Chen instructing her to repackage the goods and to remove the original manufacturer’s name and sensitive labels. Chen emailed her co-conspirator providing details on how fake invoice amounts will be calculated based on the real invoice. These are just some examples of Chen’s actions, much of which were documented by email.
If convicted, Chen faces a statutory maximum penalty of 20 years’ imprisonment and a $1,000,000 fine. Currently, a jury trial is underway. The enforcement effort against Ms. Chen was a joint investigation by the FBI’s Las Vegas Field Office and the Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement.
Background on U.S. Sanctions
The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers a number of different sanctions programs. The purpose of U.S. sanctions programs is to advance U.S. foreign policy objectives and protect national security. Currently, OFAC administers 35 sanctions programs. These sanctions programs vary widely – some are comprehensive while others are highly selective.
U.S. sanctions programs generally target one of four categories:
- Foreign countries and regimes
- Terrorist organizations / individuals
- Narcotics traffickers
- Proliferators of weapons of mass destruction
The scope of U.S. sanctions programs can be broad. Depending on the program, sanctions can regulate:
- Non-U.S. persons while in the U.S.
- U.S. citizens and permanent residents wherever located
- U.S. parent companies and the foreign subsidiaries of those entities
- U.S. subsidiaries of foreign parent companies
Current U.S. Sanctions Programs (as of June 2021)
The following is a list of current U.S. sanctions programs administered by OFAC:
- Balkans Sanctions
- Belarus Sanctions
- Burma-Related Sanctions
- Burundi Sanctions
- Central African Republic Sanctions
- Chinese Military Companies Sanctions
- Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA)
- Counter Narcotics Trafficking Sanctions
- Counter Terrorism Sanctions
- Cuba Sanctions
- Cyber-Related Sanctions
- Democratic Republic of the Congo-Related Sanctions
- Foreign Interference in a United States Election Sanctions
- Global Magnitsky Sanctions
- Hong Kong-Related Sanctions
- Iran Sanctions
- Iraq-Related Sanctions
- Lebanon-Related Sanctions
- Libya Sanctions
- Magnitsky Sanctions
- Mali-Related Sanctions
- Nicaragua-Related Sanctions
- Non-Proliferation Sanctions
- North Korea Sanctions
- Rough Diamond Trade Controls
- Russian Harmful Foreign Activities Sanctions
- Somalia Sanctions
- Sudan and Darfur Sanctions
- South Sudan-Related Sanctions
- Syria Sanctions
- Syria-Related Sanctions
- Transnational Criminal Organizations
- Ukraine-/Russia-Related Sanctions
- Venezuela-Related Sanctions
- Yemen-Related Sanctions
- Zimbabwe Sanctions
What You Can Do
Like in the case above, violations of U.S. sanctions laws can result in heavy penalties and even criminal liability. To ensure you are proactive about your sanctions compliance, you should:
- Develop an effective sanctions compliance program – A key foundation of proactive and effective sanctions compliance requires the development of a sanctions compliance plan. A sanctions compliance plan establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. A sanctions compliance plan helps build consciousness in your organization that compliance is critical – both to avoid costly penalties and also to protect national security. Diaz Trade Law helps businesses create sanctions compliance manuals that help prove you have a process in place to vet proposed transactions and ensure you can prove you can take compliance seriously and implement all of the important great weight mitigating factors. Diaz Trade Law has significant experience in developing sanctions compliance plans for organizations without plans. Additionally, Diaz Trade Law can assist your business in auditing and improving your current plan so that it is in its best shape.
- Perform sanctions compliance training – A foundation of a strong sanctions compliance program is sanctions compliance training. Training is important because it (1) ensures that all employees understand the sanctions regulations and reinforces internal policies and procedures, (2) demonstrates to federal government agencies that your business is proactive about sanctions compliance, and (3) avoids your business from being subject to costly penalties and even criminal liability. Fortunately, sanctions compliance training can be highly tailored to meet your company’s needs. All of your training events include assessments for comprehension, certificates for successful participation, and ample opportunities for Q&A. For your next sanctions compliance training event, trust Diaz Trade Law to provide highly-effective, engaging training.
- Properly vet transactions – Unsure whether a proposed transaction violates OFAC sanctions? Diaz Trade Law has significant experience vetting your potential transaction against U.S. sanctions laws. Through research and due diligence, Diaz Trade Law ensures that your transaction won’t get you in trouble later down the road. In particular, it is important to vet end-uses (how is your product going to be used?), end-users (who will be using your product?), and destinations (where will your product be used?).
- Submit voluntary self-disclosures when appropriate – If your business believes it may have violated OFAC sanctions, it can be in your business’ strategic interest to submit a voluntary self-disclosure (“VSD”). OFAC encourages anyone who may have violated OFAC-administered regulations to disclose the apparent violation to OFAC voluntarily. A voluntary self-disclosure to OFAC is considered a mitigating factor by OFAC in enforcement actions, and pursuant to OFAC’s Enforcement Guidelines, may result in a reduction in the base amount of any proposed civil penalty. Diaz Trade Law has significant experience filing VSDs and mitigating penalties. For detailed information on filing a VSD with OFAC, check out our article Submitting a Voluntary Self-Disclosure to OFAC published by Bloomberg Law.
- Ensure specific license applications are applied for when necessary – A specific license is an authorization from OFAC to engage in a transaction that otherwise would be prohibited. Businesses may apply for OFAC specific licenses to release blocked funds, generally authorize transactions, and many other purposes. Diaz Trade Law has significant experience submitting specific license applications and receiving authorization for proposed transactions on behalf of our clients.
- Have a process in place for corrective action when necessary – If your business has violated U.S. sanctions laws, there is a lot you should do to get back into compliance, ensuring you work to prevent future violations, training your employees, updating your manuals, and this work can assist in mitigating potential penalties. Diaz Trade Law has significant experience representing businesses in dealing with the U.S. Treasury Department’s Office of Foreign Assets Control. Specifically, Diaz Trade Law has successfully assisted clients in (1) submitting voluntary self-disclosures to mitigate penalties, (2) negotiated agreements with OFAC, (3) built corrective action systems to help ensure that your business does not make the same violation again, and (4) updating and enhancing your current export compliance plan.
If you have questions on sanctions or export-related matters, contact Diaz Trade Law today at firstname.lastname@example.org or 305-456-3830.
Co-Authored by Sharath Patil