LONDON, (Reuters) – The FBI has opened a criminal investigation into ZTE Corp over the Chinese company’s sale of banned U.S. computer equipment to Iran and its alleged subsequent attempts to cover it up and obstruct a Department of Commerce probe, the Smoking Gun website reported.
The federal investigations stem from a Reuters report in March that Shenzhen, China-based ZTE, a telecommunications equipment maker, sold Iran’s largest telecom firm a powerful surveillance system capable of monitoring landline, mobile and Internet communications.
The Reuters article also reported that ZTE’s 907-page “Packing List” for the $120 million contract, dated July 24, 2011, included hardware and software products from several U.S. tech companies, including Microsoft Corp, Hewlett-Packard Co, Oracle Corp, Cisco Systems Inc and Dell Inc. Sales of the equipment are prohibited by U.S. sanctions on Iran.
The Smoking Gun published on its website excerpts from a confidential FBI affidavit based on a May interview with Ashley Kyle Yablon, the general counsel of ZTE’s U.S. subsidiary in Texas. According to the affidavit, Yablon told two FBI agents that ZTE officials had discussed shredding documents, altering the packing list, and denying it was genuine in an effort to subvert a Department of Commerce investigation into ZTE’s sales of U.S. equipment to Iran.
The Commerce Department issued a subpoena to ZTE the day after the Reuters report, seeking the Iranian contract and the packing list, according to the affidavit.
SKIRTING SANCTIONS
The affidavit stated that Yablon told the FBI that a ZTE attorney had told him the company “was concerned about how the Reuters reporter obtained a copy of the packing list … because it could no longer ‘hide anything.’“ Yablon said he told the attorney “he would not be involved in a cover-up.”
