Scientist charged in Iran export case

SAN DIEGO  — Mohamad Reza Nazemzadeh just wanted to share his MRI research with his native country.

But prosecutors say the nationally-recognized scientist violated a federal ban against doing business with Iran, allegations that have led to criminal charges and potential prison time.

Nazemzadeh, a 36-year-old Michigan resident, tried to buy a medical device in San Diego to send to Iran, court documents say. While that alone isn’t considered a crime, people who wish to ship humanitarian goods such as medical equipment must obtain a license under the U.S. trade sanctions with Iran.

He is charged in San Diego federal court with conspiracy to export to an embargoed country, conspiracy to smuggle goods, money laundering and obstructing justice. If convicted, he faces a maximum of 20 years in prison on the first count alone.

The case, which began in 2011, is one of several prosecuted in San Diego involving exports to Iran, although it is rare in that it involves a medical device, Assistant U.S. Attorney Sabrina Fève said.

In a separate case last month, a San Diego federal grand jury indicted three men with conspiracy to evade U.S. sanctions against Iran through the sale of cooling equipment.

The number of such prosecutions locally was not readily available, but attorneys who specialize in economic sanctions cases say there has been an uptick in such criminal prosecutions in the past few years. Erich Ferrari, a Washington, D.C.-based lawyer, said defendants often don’t fully grasp the consequences of skirting the U.S. sanctions.

“There’s a very much misguided belief, if you’re not doing something with the government or weapons, no one really is going to care that much,” Ferrari said.

U.S. economic sanctions against Iran date back to 1979, when President Jimmy Carter ordered the freezing of Iranian assets in response to an attack on the U.S. Embassy in Tehran.

Sanctions have been revised over the decades through presidential executive orders under the International Emergency Economic Powers Act, as U.S. concerns over Iran’s nuclear program and human rights record linger. In 2000, exports for humanitarian purposes, such as agriculture, medical devices, medicine and food were allowed, as long as exporters obtained licenses from the U.S. Treasury Department.

The medical device that Nazemzadeh was trying to export was a refurbished coil for a Magnetic Resonance Imaging, or MRI, machine, according to court records.

Much of Nazemzadeh’s research has focused on MRI technology.

The married father of two has a bachelor’s degree in control engineering, a master’s in medical engineering and a Ph.D. in biomedical engineering. He emigrated permanently to the U.S. in 2010, after completing his thesis in his home country of Iran. He was in the middle of a two-year fellowship at the University of Michigan in the radiology oncology department when he was arrested in January 2012.

While he remains free on bond, he is continuing his research at the Henry Ford Hospital in Detroit as an instructor and researcher, developing a system to assist doctors performing surgery on epilepsy sufferers, according to court papers. He enters MRI results into a computer program that he’s creating to help doctors decide when and what type of surgery patients will require.

He has also used MRIs to help detect and cure cancer and conduct brain imaging. His expertise in radiation therapy has appeared in several peer-reviewed journals, and he was a presenter at the 2012 American Association of Physics in Medicine conference, his lawyer said. Requests for presentations on his research have continued.

Nazemzadeh is accused of corresponding via email in 2011 with Soundimaging, a San Diego-based MRI supplier. He allegedly asked to buy refurbished parts for MRI machines that would be sent to a hospital in Iran.

An employee reported the inquiry to U.S. homeland security investigators, and an undercover agent resumed the correspondence and eventually negotiated the sale of an MRI coil, court records say.

One of the larger questions the case will have to answer is how much Nazemzadeh knew about the licensing regulations, and how much he went out of his way to ignore them. According to transcripts, Nazemzadeh mentioned licenses in his August 2011 conversation with the undercover agent.

“I realize the conditions — what crazy persons in government are doing, and I realize the sanctions against Iran, but just you’re working in medical field. ... It shouldn’t be any problem for exporting items. ... but still people are actually afraid of government sanctions of these things,” he was recorded as saying.

A contact in Iran who is not charged in the case instructed a Netherlands bank to wire $21,400 to San Diego to pay for the coil, the indictment states.

An overseas bank is necessary as a go-between to do business with Iran — even sanctioned business, according to the law.

Fève, the prosecutor, said U.S. foreign policy clearly calls for licenses on certain exports, and people who ignore such regulations undermine those who play by the rules.

“I’m not saying medical equipment shouldn’t go to Iran, but it should go there lawfully,” Fève said.

Nazemzadeh’s lawyer, federal public defender Shereen Charlick, said she is preparing to go to trial on the case but questioned the need for a criminal prosecution, noting that the licensing agency has in place civil penalties for such violations, including warnings and fines.

“It would be a better use of resources to let that penalty scheme play out rather than resort to the criminal justice system and imprisonment of someone who’s actually doing really valuable work,” Charlick said.

The U.S. government has handled some sanctions cases against corporations with deferred prosecution agreements, meaning the charges were dropped once the companies paid settlement amounts and met other conditions, according to Ferrari.

Clif Burns, an attorney in Washington, D.C., said Nazemzadeh would likely have been granted the needed license to export the equipment. The process typically takes from six weeks to a year, and costs around $5,000 in legal fees to hire an attorney to help with the paperwork.

U.S. District Judge M. James Lorenz in January denied Nazemzadeh’s motion to dismiss the case. A trial date has not been set.