Babak Maleki, 28, of Los Angeles, California, and Shahram Setudeh Nejad, 53, of Newport Beach, California, were arrested and presented on October 5, 2006, before a federal judge in California. Following their removal hearing on October 12, 2006, the two defendants were ordered to appear in U.S. District Court for the District of Columbia on November 2, 2006, for their arraignment before the Honorable John D. Bates. The men have been charged in a previously sealed two-count indictment returned by a federal grand jury in the District of Columbia with conspiring to violate the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1750, and the Iranian Transactions Regulations (“ITR”), 31 C.F.R. Part 560, and making an unlawful export in violation of IEEPA and the ITR. Also charged in the indictment is Mojtada Maleki-Gomi, 57, of Los Angeles, California. Maleki-Gomi is currently in Iran.

According to the indictment, Babak Maleki and Mojtada Maleki-Gomi did business as M&M Investment Co. (“M&M”) of Beverly Hills, California. M&M sold and exported textile machinery and other commodities. Nejad worked for M&M in coordinating and facilitating exports and sales.

In or around July 2005, a cooperating source for Immigration and Customs Enforcement (“ICE”) made an inquiry to M&M in response to an advertisement on a website that Babak Maleki had posted seeking to sell a type of textile machinery known as Knit-de-Knit (“KDK”) equipment. Nejad responded to the inquiry and, after learning that the cooperating source and an undercover agent wanted to ship the textile machinery to Iran, put the government agents in contact with Mojtada Maleki-Gomi.

Maleki-Gomi explained to the undercover agent how he was able to evade the U.S. embargo against Iran by shipping commodities to Iran through Dubai, United Arab Emirates. During the fall of 2005, Nejad and Maleki-Gomi worked on the logistics of sending a container of 30 KDK machines to Iran through Dubai.

On December 7, 2005, the container with the KDK machinery that M&M had sold to the undercover agent left the United States for Dubai. A short time later, U.S. Customs and Border Protection (“CBP”) recalled the container and detained it. Over the next several months, Nejad and Babak had phone conversations and meetings with representatives of CBP attempting to get the container released. During those contacts, they made false representations about the identity of the purchaser of the KDK machinery and the ultimate destination of the equipment.

In announcing the arrests, U.S. Attorney Taylor, ICE Special Agent in Charge Reid, and Commerce Assistant Secretary Jackson commended ICE Special Agents Steven Francis, Mark Knoblock, Martin Odenyo, and Donald Callahan, Special Agent Jon Svendsen of the Department of Commerce, Office of Export Enforcement, and the Chicago Police Department Anti-Terrorism Section. They also expressed their appreciation to Assistant U.S. Attorney Jay I. Bratt, who is prosecuting the case.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.