Prosecutors Charge Texas Businessman with IEEPA Violations Following Oil Transactions

A case presently on the docket in the Southern District of Texas is proving to be quite interesting and perhaps indicative of a new trend of Assistant US Attorneys going after individuals for International Emergency Economic Powers Act (IEEPA) violations.  This case is not your typical laptop reexport case, however.

Billy L. Powell, Sr., a US citizen has been charged on a number of alleged violations of the IEEPA, the Iranian Transactions Regulations (ITR, now the Iranian Transactions and Sanctions Regulations or ITSR), and the Export Administration Regulations (EAR) for exporting hundreds of shipments of pieces of oil equipment through his company Oil Services and Trading, Inc. to Iran.  Oil Services allegedly made these sales through the United Arab Emirates (UAE and the sales were used for the Foresight Driller-V offshore drilling platform, being managed by the Iranian Offshore Oil Company (IOOC), a subsidiary of the now-OFAC-designated Iranian National Oil Company (NIOC).  The Alborz rig is similarly another offshore drilling platform.  These sales were made over a span of almost 8 years ending in 2008.

The U.S. Attorney charges that between January 2006 and April 2008, Powell knowingly and willfully caused Oil Services to make and ship 325 sales of oil field equipment (valued at $3,179,625.05) from the U.S. through the U.A.E. to the Foresight and Alborz rigs in Iranian waters, without first having obtained OFAC authorization.

It will be interesting to see what becomes of this case.  There is little out there about Oil Services and Trading, Inc. Was it an alter ego of Mr. Powell? It is interesting that the case, if true, demonstrates a very egregious violation. It’s not every day that a U.S. company is relatively overly supporting the Iranian oil and gas industry.  While Iran’s oil and gas is generally one focus out of a number for the US government from a sanctions perspective, recent IEEPA cases seem to focus more on computer equipment.  There is an export-control element here too, but with a different industry. Will AUSAs be prosecuting more such cases in the future?

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