The FBI has opened a criminal investigation into allegations that Chinese telecoms kit maker ZTE flouted United States laws by selling technology from US firms to Iran and then deliberately covering its tracks once the media caught wind.
The Smoking Gun claims to have obtained a top secret FBI affidavit which reveals that senior officials at the firm were “engaged in an on-going attempt to corruptly obstruct and impede” a Department of Commerce investigation.
The story first broke when Reuters reported in March that ZTE had sold its ZXMT phone monitoring product to the state-run Telecommunication Co. of Iran (TCI) in 2010 as part of a €98.6m (£82.4m) deal for networking equipment.
The more damning allegations, however, centred around a 900-page ‘packing list’ of products sold to TCI which included AV software, switches and monitors, some of which were made by US companies like Microsoft, HP and Symantec and therefore subject to the country’s strict trade embargo with Iran.
In a statement at the time, ZTE said it “always respects and complies with international and local laws wherever it operates”, and claimed it had restricted its business practices in Iran since 2011, but didn’t comment on allegations of breaking US law.
The main revelations in the affidavit come from Ashley Yablon, an attorney with ZTE’s US subsidiary.
He apparently told the FBI that at one key meeting to decide ZTE’s response to the reports, a group of senior officials “huddled together in the corner of the room” discussing shredding documents and changing the incriminating packing list.
According to TSG, Yablon has handed over the files on his work laptop to the FBI.
These files, he says, detail how ZTE established subsidiary companies or other affiliates to “facilitate the corporation’s purchase of US-made telecommunications components for inclusion intended to be shipped or exported to countries subject to US embargo”.
The Shenzhen-based company told The Reg today it had no comment on the breaking allegations. ®