In a recent development, Farhad Nafeiy, a Bay Area Telecommunications Consultant, has pleaded guilty to violating sanctions on Iran. The charges include exporting software upgrades for commercial-grade telecommunications servers to Iran and tax evasion. The U.S. Attorney’s Office announced that Nafeiy knowingly exceeded his licenses from the Office of Foreign Assets Control (OFAC), which allowed him to advise non-Iranian telecommunications companies on doing business with Iran but did not authorize him to provide any hardware, software, or technology directly to Iran. Nafeiy admitted that the total amount of sales of these software upgrades to Iran was approximately $400,000. Additionally, Nafeiy also admitted to evading his federal income taxes by not paying income tax on some of the proceeds from these sales. Nafeiy now faces a maximum prison term of 20 years for violating sanctions and a maximum prison term of five years for tax evasion, along with substantial fines and potential restitution. The case is being prosecuted by the U.S. Attorney’s Office, with the assistance of Homeland Security Investigations and the Internal Revenue Service-Criminal Investigation. A sentencing hearing has been scheduled for January 29, 2024.
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Charges and Guilty Plea in Violation of Sanctions and Tax Evasion Case: Farhad Nafeiy
Overview
This comprehensive article delves into the recent charges and guilty plea against Farhad Nafeiy, a Bay Area telecommunications consultant, for violating sanctions on Iran and tax evasion. It provides an explanation of the International Emergency Economic Powers Act (IEEPA), details the prohibitions on activities and transactions with Iran, discusses OFAC regulations and licenses, and explores the violation of licenses and Iranian Transactions and Sanctions Regulations (ITSR). Additionally, it covers Nafeiy’s admission of sales and tax evasion.
Charges against Farhad Nafeiy
Violation of sanctions by exporting software upgrades for telecommunications servers
Farhad Nafeiy, a Bay Area telecommunications consultant, has been charged with violating sanctions by exporting software upgrades for commercial-grade telecommunications servers to the Islamic Republic of Iran. This violation of the International Emergency Economic Powers Act (IEEPA) is based on the President’s authority to address threats to national security, foreign policy, or the economy. In this case, the President has issued orders prohibiting certain activities and transactions with Iran, including the export of U.S.-origin products.
Tax evasion
In addition to the violation of sanctions, Farhad Nafeiy has also been charged with tax evasion. He admitted to evading federal income taxes by not paying income tax on some of the proceeds from his sales of software upgrades to Iran. This charge further underscores the seriousness of Nafeiy’s actions and the legal consequences he may face.
Plea acceptance and announcement
Farhad Nafeiy’s guilty plea has been accepted by the Honorable Araceli Martínez-Olguín, United States District Judge. This plea agreement is a significant development in the case and highlights Nafeiy’s admission of guilt in violating sanctions and committing tax evasion. The announcement of these charges and guilty pleas was made jointly by United States Attorney for the Northern District of California Ismail J. Ramsey, Assistant Attorney General Mathew G. Olsen, Homeland Security Investigations (HSI) Special Agent in Charge Tatum King, and Special Agent in Charge of the IRS Criminal Investigation’s Oakland Field Office Darren Lian.
Explanation of the International Emergency Economic Powers Act (IEEPA)
The International Emergency Economic Powers Act (IEEPA) is a law that grants the President of the United States the authority to address unusual and extraordinary threats to national security, foreign policy, or the economy. Under this act, the President can issue orders prohibiting certain activities and transactions with countries or entities that pose a threat. In the case of Farhad Nafeiy, his violation of sanctions on Iran is a direct violation of the IEEPA.
Prohibitions on activities and transactions with Iran
As part of the sanctions imposed on Iran, there are specific prohibitions on activities and transactions with the country. These sanctions generally prohibit exporting or facilitating the export of U.S.-origin products to Iran and providing services to Iran. The purpose of these prohibitions is to restrict Iran’s access to certain goods and services, thereby putting pressure on the Iranian government and promoting national security interests.
OFAC regulations and licenses
The Department of Treasury’s Office of Foreign Assets Control (OFAC) has issued regulations known as the Iranian Transactions and Sanctions Regulations (ITSR) to implement the orders issued under the IEEPA. These regulations provide further guidance and specify the requirements for engaging in transactions with Iran. In some cases, individuals or companies can obtain licenses or approvals from OFAC to conduct specific activities related to Iran, with limitations and restrictions.
Violation of licenses and ITSR
Farhad Nafeiy obtained licenses or approvals from OFAC for advising non-Iranian telecommunications companies on doing business with Iran. However, these licenses did not authorize him to directly provide any hardware, software, or technology to Iran. Nafeiy exceeded the scope of his OFAC licenses by providing software upgrades to telecommunications equipment in Iran. This violation of the Iranian Transactions and Sanctions Regulations (ITSR) and the International Emergency Economic Powers Act (IEEPA) are serious offenses that have legal consequences.
Admission of sales and tax evasion
As part of his plea agreement, Farhad Nafeiy admitted that the total amount of sales of software upgrades to Iran was approximately $400,000. This admission sheds light on the extent of his involvement in violating sanctions. Furthermore, Nafeiy also admitted to evading his federal income taxes by not paying income tax on some of the proceeds from these sales. This admission highlights the additional charge of tax evasion that Nafeiy faces and underscores the gravity of his actions.
Contact information
For more information or inquiries about this case, please contact:
- United States Attorney’s Office, Northern District of California
- Homeland Security Investigations (HSI)
- Internal Revenue Service-Criminal Investigation
Please note that any inquiries regarding this case should be directed to the appropriate authorities involved in the investigation and prosecution.
In conclusion, the charges and guilty plea against Farhad Nafeiy in violating sanctions on Iran and committing tax evasion highlight the seriousness of these offenses. The explanation of the International Emergency Economic Powers Act (IEEPA), the prohibitions on activities and transactions with Iran, and the violation of OFAC licenses and ITSR provide valuable insights into the legal framework surrounding these sanctions. This case serves as a reminder of the importance of compliance with sanctions and the potential consequences for those who violate them.