U.S. Charges Five for Conspiring to Sell Iranian Oil

February 13, 2020

On February 13, the United States charged five individuals with conspiring to violate U.S. sanctions on Iran. The Justice Department alleged that the five defendants planned to use a Polish shell company to illicitly purchase Iranian oil and sell it to a refinery in China. “With the goal of illegally enriching themselves, the defendants conspired for over eight months to devise a scheme to violate U.S. sanctions imposed on Iran, particularly the ban on foreign oil sales,” said John Demers, Assistant Attorney General for National Security. In November 2018, President Trump ordered the reimpostion of sanctions on key sectors of Iran's economy. The Trump administration has pressured Tehran to negotiate a new nuclear deal that would also address the Islamic Republic’s ballistic missile program, support for extremist groups, and threats against its neighbors and U.S. allies. The following is a press release by the Justice Department. 

 

Justice Department Press Release

The Department of Justice today announced that the following defendants were arrested and charged by Complaint on charges of conspiracy and violating the International Emergency Economic Powers Act (IEEPA) based on their attempt to transact in sanctioned Iranian oil:

  • Nicholas Hovan, 33, of New York, NY;
  • Zhenyu Wang, a/k/a “Bill Wang,” 39, of Dallas, TX;
  • Robert Thwaites, 30, of Dallas, TX;
  • Nicholas James Fuchs, 26, of Dallas, TX; and
  • Daniel Ray Lane, 38, of McKinney, TX.

The defendants are each charged with one count of conspiracy and one count of violating IEEPA, based on allegations that from July 2019 to February 2020 they conspired in Philadelphia and elsewhere to arrange for the purchase of oil from the Islamic Republic of Iran, in violation of United States economic sanctions imposed on Iran, for sale to a refinery in China. 

The Complaint alleges that defendants Nicholas Hovan, James Fuchs, Robert Thwaites, and Daniel Ray Lane arranged to purchase the oil and sell it to a refinery in China represented by defendant Zhenyu Wang, a/k/a “Bill Wang.”

According to the Complaint, defendant Lane offered to further the conspiracy by laundering money through his company, STACK Royalties.  The charges further allege that the defendants agreed to use a Polish shell corporation as a straw seller of the illicit oil, and that they planned two shipments of oil per month going forward, all for great profit.  In addition, the charges allege that defendants Fuchs and Thwaites agreed to apply for foreign passports in order to set up offshore accounts that would not be reported to U.S. authorities.  

“With the goal of illegally enriching themselves, the defendants conspired for over eight months to devise a scheme to violate U.S. sanctions imposed on Iran, particularly the ban on foreign oil sales,” said Assistant Attorney General for National Security John C. Demers.  “The sale of oil is the lifeblood of the Iranian economy.  At the same time the United States was increasing its sanctions in order to pressure Iran to stop its malign activities, these defendants put greed ahead of country.  I commend the efforts of the agents and prosecutors who investigated and uncovered this brazen evasion of U.S. law.”

“The defendants in this case allegedly committed serious federal crimes that flew in direct contradiction to the United States’ national security interests,” said U.S. Attorney McSwain for the Eastern District of Pennsylvannia.  “By devising a scheme to purchase oil from Iran, conceal its origins via a refinery in China and make tremendous profits, the defendants were also directly financially benefitting the nation of Iran in its quest to become a nuclear power, thus jeopardizing the safety and security of the United States and our allies.  These five defendants will be prosecuted to the fullest extent of the law in order to send the message that this type of subversion of U.S. policy and law will not be tolerated.”

If convicted, the defendants each face a maximum possible sentence of 25 years’ incarceration, as well as a maximum possible fine of $1.25 million.

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Michael Rinaldi and First Assistant United States Attorney Jennifer Arbittier Williams, in partnership with Trial Attorney David Recker of the Department of Justice’s National Security Division, Counterintelligence and Export Control Section.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.