March 17, 2009, - 6:25 pm

U.S. Catches a Big One: Iranian Who Bought US-Made Rolls Royce Engines for Iran Nukes Nabbed; Why Was He Here?

By Debbie Schlussel
**** UPDATE: Read Commerce Dept. Special Agent David J. Poole’s Interesting Affidavit on Nabbed Iranian ****
An Iranian businessman, who bought millions in U.S.-made equipment–including Rolls Royce helicopter engines–for the government of Iran, tempted fate when he set foot in America, apparently for the first time. And he was arrested and indicted virtually on the spot.
My first question: Who knew Rolls Royce makes helicopter engines? Who knew they made them in the U.S. (in Indiana)? This appears to be an inside baseball detail in the weapons and aviation industry.
My second question and far more intriguing: Why did this guy fly to America, knowing he might get caught and arrested? With whom was he meeting here in the States? And why?
Customs and Border Protection agents are to be commended for being on the alert and noting that Hossein Ali Khoshnevisrad was arriving in San Francisco, Saturday. Glad we got him, but something doesn’t smell right here. Did this guy really think we wouldn’t be on to him and arrest him? Did he think he was that invincible?



Iranian Nuke Arms Dealer Who US-Made Bought Rolls Helo Engines Nabbed


A Tehran businessman who allegedly helped run a major weapons-smuggling ring for Iran was charged yesterday with multiple export-related crimes, two days after he was arrested in San Francisco after stepping off a flight from Europe.
Hossein Ali Khoshnevisrad, 55, was described by U.S. officials as a key figure in Iran’s vast network of businesses and front companies seeking Western technology for weapons ranging from ballistic missiles to improvised explosive devices. Documents and officials from the Justice and Commerce departments linked Khoshnevisrad’s firm to a scheme to acquire millions of dollars worth of parts for military helicopters and jet fighters, using Malaysian and European companies as middlemen.
At least some of the parts were intended for an Iranian company that the State Department has linked to Iran’s nuclear and ballistic missiles program, according to documents first obtained by the nonprofit Center for Investigative Reporting. The case was the latest in a series of attempts by the U.S. government to crack down on illicit procurement networks that feed Tehran’s pursuit of high-tech weapons systems.
The arrest of Khoshnevisrad was an unexpected bonus in those efforts, U.S. officials said. After tracking the businessman and his import company, Ariasa, for months, investigators with U.S. Customs and Border Protection discovered that the entrepreneur was traveling from Iran to the United States for what was believed to be his first visit to this country.
A party of federal officers was waiting for him early Saturday as he arrived at San Francisco International Airport with his wife and son after a stopover flight from Europe. Khoshnevisrad was confronted in the airport’s customs area and detained without incident.

Whoa. Would have loved to be a spectator for that “meeting.”

“It is rare that a guy of his stature in the procurement business comes to the United States,” said a law enforcement official familiar with the case. The official, speaking on the condition of anonymity because of the ongoing probe, said the case “demonstrates the scope and reach of these procurement networks, and their global efforts to insulate themselves using trading companies around the world.”

Again, the question I ask is, why? Why did he dare come here? With whom was he supposed to meet? Who in the San Francisco area has ties to a man who is helping Iran get nukes? Those are the $64,000 questions here.

Ariasa, the official said, relied chiefly on Malaysian trading partners — including a phony “book trader” — to circumvent bans on direct exports of technology to Iran. The link is notable, he said, because Iran appears in recent months to have shifted the routing of many of its purchases through Asia, following a crackdown on several front companies in the United Arab Emirates.

Ah, our “moderate,” Israel-hating friends at the UAE. Shocker. We know they’ve been making their shores the transfer point for the Iranian nuke quest.

Khoshnevisrad, balding with gray hair and a mustache and wearing a blue dress shirt and slacks, made his first court appearance yesterday at an arraignment before a U.S. magistrate in San Francisco.

Burning Question: Does anyone from Iran (or Iraq) not have a mustache?

With his family members in the courtroom, he was formally charged with four counts of export-related charges, tied to a series of alleged deals to ship helicopter engines and military-grade surveillance cameras to Iran.

Hmmm . . . does his family live here? Is it comprised of U.S. citizens? Reports said he flew here only with his wife, not “family members.”

Assistant U.S. Attorney Candace Kelly requested that Khoshnevisrad be held without bail, saying he posed a “very serious national security risk.” The magistrate agreed with that request.
The aircraft parts, valued at more than $4 million, were purchased from U.S. firms and routed through a network of front companies, according to documents obtained by the Berkeley, Calif.-based CIR.
Among the purchases were 17 Rolls-Royce helicopter engines, manufactured at a factory in Indiana and allegedly destined for Iran Aircraft Manufacturing Industrial Co., and 11 aerial-surveillance cameras sold by a Pennsylvania distributor and allegedly intended for mounting on Iran’s F-4 fighter jets, according to an affidavit by investigators for Commerce’s Office of Export Enforcement. The U.S. firms apparently were unaware that the parts were intended for Iran, federal officials said.
The documents, including an affidavit from the Commerce Department filed with the magistrate, indicate that Khoshnevisrad’s network also allegedly involved trading companies in Ireland and the Netherlands and American freight carriers, one of which was described in court records as “the Irish trading company’s designated freight forwarder from New York.”
The investigation of Khoshnevisrad relied in part on intercepted e-mails between him and his business partners. Excerpts from the e-mail exchanges appear to show Khoshnevisrad, while negotiating deals with Irish and Dutch trading partners, often acknowledging that the companies would have to circumvent U.S. export laws.
“We have your ‘three engines’ ready to ship/deliver in Kuala Lumpur,” a representative of the Irish trading company wrote in a Jan. 15, 2007, e-mail, one of several cited in the Commerce affidavit. “We are giving you . . . top-quality service . . . under extreme[ly] difficult conditions (embargo[es] . . . export controls).”
In another e-mail to Khoshnevisrad about three weeks later, the Irish trading company wrote, “Aviation/Equip[ment] . . . embargo . . . very, very ‘strong’ right now on ‘Iran.’ Extreme vigilance ‘worldwide’ in place.”
In another case involving alleged front companies, the Justice Department indicted a number of Iranian businessmen and firms for illegally purchasing electronics used to make IEDs of the type used to kill U.S. and coalition troops in Iraq.

Again, why would someone so clever and aware of American laws and that he was violating them, dare enter America at the risk of being arrested and caught? That isn’t normal. Typically guys on this level wouldn’t be caught dead in America.
They’d only be caught making America dead.
This kind of thing usually only happens in the movies and on TV. What do you think is going on here?

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13 Responses

I don’t have a clue, but since you asked …
1) He was a US agent who wanted asylum now (perhaps he thought he would get caught soon) and is now in the witness protection program.
2) The US is actively sabotaging Iranian military development (especially nukes) by using “fake” people on the black market. Perhaps this was part of one of their operations.
3) Not the right guy. Could have the same name as the real guy.
Lastly, and perhaps I am a bit tired so I didn’t realize this was a joke, but I found the following doing a simple Google search:
Rolls-Royce Corp. has announced a 10-year contract to provide Bell Helicopter with Model 250 engines for Bell 206 and 407 helicopters. The agreement is valued at up $400 million. The engines are produced at Rolls-Royce’s Indianapolis operations. Rolls-Royce has worked with Bell Helicopter since 1961, delivering more than 18,000 engines.

i_am_me on March 17, 2009 at 7:16 pm

“Again, why would someone so clever and aware of American laws and that he was violating them, dare enter America at the risk of being arrested and caught? That isn’t normal. Typically guys on this level wouldn’t be caught dead in America.
Posted by Debbie at March 17, 2009 06:25 PM”
I have the answer for you, it’s simple:
The Bush administration allowed that guy to export U.S. military equipments to Iran, he felt safe to come back since the U.S. government gave the seal of approval and didn’t do anything to stop him in the past.
It’s really funny, I’m laughing my butt off: the government arrested him AFTER he exported the military technology to Iran, not before.
Aren’t you proud to be an American?
Aren’t you proud of our government who does everything to protect us?
Where was the U.S. government while that Iranian was screwing America, in America?!?!
This is not like he was smuggling a Barbie doll!!!
I don’t know.
But I know that during that time Bush was in a private session with a tutor, trying to learn how to pronounce the word “nuclear.”
See, the problem is not the enemies of America, the problem is America’s politicians.
As I wrote many times, only America will destroy America, not Al Qaeda, not Iran, not anybody else.
And thank Allah that we have a Muslim Fascist-Communist in the White House who will expedite the destruction of this country in our lifetime.
We won’t miss a thing.

Independent Conservative on March 17, 2009 at 8:27 pm

Oh Oh, I have a question for myself now.
Why the U.S. government decided to arrest him this time?
The answer is:
1 – They have no use for him anymore.
2 – Hussein’s approval ratings are on their way to the toilet.
Hussein needs any boost he can get since some of his voters realized that they’ve been screwed by his Teleprompter.
And it’s good to add to his resume next time he gives a speech about his “accomplishments,” especially on national (in)security.

Independent Conservative on March 17, 2009 at 8:48 pm

He was probably in town for a Pelosi fundraiser.

Lagniappe'sGuy on March 17, 2009 at 9:22 pm

Independent, you’re spot on. I bet Debbie is laughing her ass off too as I am – its very peculiar this guy was arrested after the damage was already done. Its akin to stealing a horse thief after the horse was already stolen. Does the Feds’ arrest make me feel safer? No, I don’t and to continue with the horse metaphor, the high technology has already fled the barn. We’re not serious in dealing with Iran and Carl Matzav just reported Obama Administration officials refused to meet with IDF Chief Of Staff Gabi Ashkenazi to hear him present Israel’s position on the Iranian threat. They weren’t interested. And Debbie would concur there’s more to what’s going in Washington than meets the eye – which isn’t for the record, overly friendly towards the Jewish State.

NormanF on March 17, 2009 at 10:17 pm

Oops, I meant akin to arresting a horse thief after the crime was committed. That’s usually what the police do anyway.

NormanF on March 17, 2009 at 10:20 pm

Do you remember Robert Levinson, the former Federal agent who vanished in Iran?
It is pay back time, (the Israeli way).
It is a sell out with a different diplomatic approach.

Daniel on March 18, 2009 at 1:06 am

GREAT article Debbie Schlussel!
Jeff Schrembs, American Citizen, says KEEP UP THE GREAT WORK!
Now, I have some “emails” concerning about 20-30 million ILLEGALS living here in the United States – taking our jobs/identitys/childrens education at public schools/hospitals/ss#/benefits (local,state, federal)/etc. – so WHO do I notify about this? Sometimes the United States Goverment misses the “Forest for the Trees” and a perfect example is that the IRS is LEGALLY PRECLUDED from “sharing” it’s records with Homeland Security. Thus, ILLEGAL ALIENS (those who do) who file FALSE TAX RETURNS USING FALSE SS#’s are NOT (and I repeat NOT) prosecuted nor are they “forwarded for investigation” by the IRS. AMAZING!
I would LOVE Debbie to do a story about this!
Take care and God bless.

Nostradamus on March 18, 2009 at 2:18 am

Holy Crow, Back in 2006, I almost had a job with RR in Indy, in their Export Control Dept!!! Glad I did not get, as this may have happened on “my watch”

Grizz on March 18, 2009 at 8:45 am

I’ll let others address your second question, but I happen to know the answer to the first. Rolls Royce makes engines (primarily turboprop and helicopter) in the US because they acquired Allison Engine. Allison had been part of GM back when the automakers wanted to diversify (GM bought them in ’29) and sold to private equity investors in 1993. In 1995, the private equity company (Clayton, Dubilier and Rice, in case anyone cares), flipped the company to Rolls Royce.
Rolls had been trying to buy Allison for years, as they had a long history of technology sharing and complementary product lines. They didn’t get the ’93 deal mostly because their stock was in the dumper and they couldn’t afford it.
The Pentagon approved the purchase. Despite Rolls being domiciled in a close US ally, the Pentagon put all sorts of technology-sharing restrictions on the company as the price of their approval, which restrictions live to this day.
So yeah, “inside baseball” in the sense that most people don’t track this kind of thing day to day, but nothing particularly unusual going on with question number one.
I now return you for your regularly scheduled examination of the more-interesting question number 2. 🙂

homebrewer on March 18, 2009 at 9:20 am

RR has a long and illustrious history in the aircraft engine business, even previous to its purchase of Allison. They made the Merlin engine for the Spitfire fighter, and were an early pioneer in jet engines. on March 18, 2009 at 1:18 pm

That’s a good point, photoncourier, and I didn’t mean to detract from RR’s honorable long-term success in the aerospace business, including defense aerospace, which they built on their own. I was merely answering the more limited question of why they had a *US-based* defense aerospace business making helicopter engines. That is what they got when they acquired Allison.

homebrewer on March 18, 2009 at 2:36 pm

Charles Freeman?
Grover Norquist?

FeFe on March 19, 2009 at 1:57 am

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