INSIDER THREAT: US Defense Contractor calls Iran “my nation”; tried to transfer skills learned at 3 companies

A guy who had worked for three different US defense contractors wanted to “transfer” the “skills and knowledge” he learned at these companies to Iran, which he called, “my nation.” Dual loyalties anyone? And at a US government contractor company??

(DOJ) Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Deirdre M. Daly for the District of Connecticut announced that Mozaffar Khazaee, 60, formerly of Manchester, Connecticut, pleaded guilty today before U.S. District Judge Vanessa L. Bryant in Hartford to violating the Arms Export Control Act, in connection with his efforts to send to Iran sensitive, proprietary, trade secret and export controlled material relating to military jet engines for the U.S. Air Force’s F35 Joint Strike Fighter program and the F-22 Raptor program, which he had stolen from defense contractors where he had previously been employed.

“While employed with U.S. defense contractors, Mozaffar Khazaee stole sensitive, proprietary and controlled technology to send it to Iran. “The illegal export of our military technology compromises U.S. national security and reduces the advantages our armed forces currently possess. As today’s case demonstrates, we will aggressively investigate and hold accountable those who attempt to steal trade secrets and sensitive military technology from U.S. industries, whether for their own personal gain or for the benefit of foreign actors.” —U.S. Attorney Daly

“Today’s guilty plea demonstrates the ongoing cooperation with our federal law enforcement partners to prevent U.S. technology from falling into the wrong hands. Across the globe, the magnitude and scope of threats facing the United States has never been greater, and that’s why one of Homeland Security Investigations highest priorities is to prevent illicit procurement networks, terrorist groups and hostile nations from illegally obtaining U.S. military products and sensitive dual-use technologies. Homeland Security Investigations takes pride in protecting our country, and today’s guilty plea is the latest example of our effective investigative efforts.” — Special Agent in Charge Bruce Foucart of HSI Boston

“This joint investigation has emphasized the need for American companies to remain vigilant against the theft of valuable and sensitive technologies. As our nation continues to lead the way in research and development, we are constantly reminded that there are those who seek to advance their own causes by stealing the hard work of others, and we owe it to ourselves and to the American public to guard against it. The FBI vigorously investigates these matters in cooperation with our law enforcement partners, both domestic and abroad.” — Special Agent in Charge Patricia M. Ferrick of the FBI’s New Haven Division

“This investigation demonstrates the dedication of the Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service and our federal and military partners to ensure that critical technology is not exploited by criminals acting on behalf of governments hostile to the U.S. Foreign governments continue to actively seek U.S. military technology in an effort to advance their own military development. Today’s plea represents our continuing efforts to safeguard sensitive technology and to shield America’s investment in national defense by thwarting those who try to illegally acquire our national security assets.” — Special Agent in Charge Craig W. Rupert of the Defense Criminal Investigative Service’s Northeast Field Office

According to court documents and statements made in court, at different times between 2001 and 2013, Khazaee was employed by three separate defense contractors.

From at least 2009 through and including late 2013, Khazaee attempted to use trade secret, proprietary and export controlled material that he had obtained from his employers to gain employment in Iran.

In November and December 2009, Khazaee corresponded by email with an individual in Iran to whom he attempted to send, and in some cases did send, documents containing trade secret, proprietary and export controlled material relating to the Joint Strike Fighter Program.

In one email Khazaee wrote “some of these are very controlled . . . and I am taking [a] big risk. Again please after downloading these two Power Point files delete everything immediately.”

Analysis of Khazaee’s computer media revealed not only additional documents containing proprietary, trade secret and export controlled material belonging to the U.S. defense contractors at which he had been employed, but also cover letters and application documents, dating from in or about 2009 through in or about 2013, in which Khazaee sought employment with multiple state-controlled technical universities in Iran.

In multiple letters Khazaee described the knowledge and skills he had obtained while working for the U.S. defense contractors and wrote: “[a]s lead engineer in these projects I have learned some of the key technique[s] that could be transferred to our own industry and universities.”

Khazaee stated that he was “looking for an opportunity to work in Iran, and . . . transferring my skill and knowledge to my nation.”

In or about November 2013, while residing in Connecticut, Khazaee caused a shipment to be sent by truck from Connecticut to a freight forwarder located in Long Beach, California, which was intended for shipment to Iran.

The shipment included numerous boxes and digital media containing thousands of documents consisting of sensitive technical manuals, specification sheets, technical drawings and data, and other proprietary material relating to military jet engines and the United States Air Force’s F35 Joint Strike Fighter (JSF) program and the F-22 Raptor.

Many documents were labeled as “Export-Controlled,” as well as stamped with “ITAR-controlled” warnings. Khazaee did not apply for nor did he obtain any export license or written authorization to export any of the documents, and the export or attempted export of such material to Iran is illegal.

On Jan. 9, 2014, Khazaee was arrested at the Newark Liberty International Airport before boarding a flight with a final destination of Iran. Search warrants executed on Khazaee’s checked and carry-on luggage revealed additional sensitive, proprietary, trade secret and export controlled documents relating to military jet engines, in both hard copy and in electronic form on Khazaee’s computer media. Khazaee has been detained since that time.

Judge Bryan scheduled sentencing proceedings for May 20, 2015, at which time Khazaee faces up to 20 years in prison and a $1,000,000 fine.

This investigation is being led by the United States Department of Homeland Security’s Homeland Security Investigations in New Haven, in coordination with the New Haven Division of the Federal Bureau of Investigation, the Defense Criminal Investigative Service in New Haven and the Department of Commerce’s Boston Office of Export Enforcement.

Assistant Attorney General Carlin joins U.S. Attorney Daly in commending the efforts of the many other agencies and offices that were involved in this investigation, including U.S. Attorney’s Offices for the Central District of California, the Southern District of Indiana and the District of New Jersey, Homeland Security Investigations in Los Angeles, the U.S. Customs and Border Protection Service in Los Angeles, the U.S. Air Force’s Office of Special Investigations in Los Angeles and Boston, as well as HSI, CBP, and FBI in New Jersey, and HSI, FBI and DCIS in Indianapolis.

This case is being prosecuted by Assistant U.S. Attorneys Stephen Reynolds and Krishna Patel of the National Security and Major Crimes Unit of the District of Connecticut, and Trial Attorney Brian Fleming of the Justice Department’s National Security Division.

Threats are Out There