- The Washington Times - Wednesday, September 22, 2004

The U.S. subsidiary of a Japanese company will plead guilty to illegally shipping high-technology pumps with military applications to Iran through two French companies, The Washington Times has learned.

Ebara International Corp., based in Sparks, Nev., has agreed to a plea bargain related to seven criminal violations from the sale of cryogenic transfer pumps to Iran, according to Bush administration law-enforcement officials.

The pumps are used to move cold fluid and have applications for liquid natural gas as well as for cooling nuclear power plants.

The company’s founder, Everett Hylton, who left the company recently, also will offer a guilty plea to separate charges of conspiracy to make false statements to investigators, the officials said.

Mr. Hylton falsely told investigators that pumps worth $750,000 were sold to a company in France when he knew they were being sold to an Iranian company, according to court documents in the case.

The company has agreed to pay a fine of $6.3 million in addition to other civil penalties of about $99,000. Mr. Hylton also will pay a $99,000 fine and receive a suspended prison sentence, the officials said.

It is illegal under presidential directives and U.S. export laws to sell industrial products to Iran, a nation designated as a state sponsor of terrorism by the State Department.

The illegal sale of pumps was first disclosed by The Times in September 2003, triggering the yearlong investigation by the Commerce Department, U.S. Customs Service and Treasury Department into the diversion of four Ebara pumps to Iran.

The sale was masked by company officials who said the pumps would be used by two French companies, Cryostar and Technip, officials said.

However, an investigation disclosed that the pumps were resold to Iran’s state-owned Pars Petrochemical Co., which is building an offshore gas complex near Qatar in the southern part of Persian Gulf.

The officials, who spoke on the condition of anonymity, said the plea deals are expected to be announced by the Justice Department today after a hearing before U.S. District Court Judge John Garrett Penn.

An investigation into the French companies’ role in the pump diversion is continuing and could lead to U.S. economic sanctions against Cryostar and Technip, the officials said.

Spokesmen for the companies could not be reached for comment.

A Commerce Department official involved in the investigation said one “immediate concern” in the transfers is that the pumps can be used as part of the cooling system for Iran’s nuclear reactors at Bushehr. Court documents indicate that the pumps were to be used in a petrochemical plant.

Iran’s government recently announced that it was ignoring appeals from the International Atomic Energy Agency and will resume the processing of highly enriched uranium, which U.S. officials say will be used to make nuclear weapons.

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