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04/22/2010

The case has to do with temperature and humidity gauges as well as valves that regulate water flow -- the kind of things you can pick up in any sanitation-equipment store.

But what makes it unusual is that it also has to do with a request by American law-enforcement officials for their German counterparts to search through the office of a man they have in their sights and confiscate, in particular, "electronic data, written correspondence, invoices and lists of addresses."

What's more, these same officials would also like the Germans to extradite the suspect -- a German citizen who, for legal reasons, can only be identified as "N." -- so he can face criminal charges in the US. As far as the Americans are concerned, the ethnic Iranian businessman from the northern German city of Kiel is an enemy of the state who deserves to be put in prison for up to five years -- whether he was involved with the temperature and humidity gauges or not.

The case is very explosive. Federal prosecutors in Miami want to bring N. and seven other suspects before a US court for breaking an arms embargo against Iran and defrauding the US government. But German officials have refused to carry out the American demands in the belief that there is no legal basis for moving against the accused.

Is N. cleverly gaming the German legal system to get around the embargo against Iran and aid terrorists? Or, as he has reportedly claimed, did he just unknowingly stumble into a confrontation with the US justice system?

Smuggling US Products to Its Enemies

The story goes back to 2005, when a group of American specialists in Iraq disarmed a live roadside bomb -- or, in US military lingo, an improvised explosive device (IED) -- like the ones that have killed an estimated 2,000 US soldiers in recent years. While examining the bomb, they found a number of electronic components labelled "Made in the USA."

These findings prompted US officials to launch a concerted investigation into just how American computer chips and GPS systems could wind up in the hands of terrorists. From recovered serial numbers, they learned that some of the parts were first sent from a company in Arizona to Dubai, then to Iran for assembly and, finally, to insurgents in Iraq and Afghanistan.

Investigators also uncovered a network of some 16 companies and private individuals, including N., who now stand accused of having helped smuggle the electronic parts needed to build the IEDs from the US to Iran.

Their work has led US investigators to conclude that N. belongs to a network that has ordered roughly 30,000 electronic parts and other "dual-use" equipment -- meaning ones that can have both military and civilian uses -- from the US since 2004, only to deliver them to middleman firms in Dubai or Malaysia that then relay them to Iran.

The investigators believe the parts of the network based in the US have ordered a total of 17 different kinds of electronic equipment -- including 7,500 microchips, 2,000 microprocessors, 40 GPS units, custom-built logic circuits and thousands of electronic resistors, boosters and filters -- from companies such as Texas Instruments, Motorola and Ericsson. Among the ordered parts were also 5,000 of the exact same kind of microchip -- the PIC16F84A-04I/P -- found in the IED that was disarmed in Iraq in 2005.

According to a 45-page report released by American investigators, in most cases, the end-customer for these parts was a Dubai-based company called Majidco, which then flew the equipment to Iran.

Still, the report adds that, at a certain point, the route through Dubai apparently became too dangerous for the network. When the first indications emerged that the Iran embargo had been breached, US officials reportedly put pressure on Dubai, which resulted in the closing of the company that received most of the deliveries.

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• Part 1: US and Germany Tussle over Arresting Suspected Smuggler
• Part 2: Did N. Commit a Criminal Offense?