A Schuylkill County manufacturer of heavy tools for the steel industry and its president, Helmut Oertmann, have pleaded guilty in federal court to charges they were part of a conspiracy to smuggle goods to Iran.
Hetran Inc., based in Orwigsburg, and Oertmann were charged in April with taking steps to conceal the final destination of an $800,000 machine used to shape steel bars for use in the automobile and aircraft industries.
The company pleaded guilty Tuesday to conspiring to violate the laws of the United States by shipping goods in violation of a ban on export to Iran. The offense carries a maximum fine of $1 million for the company.
Oertmann, 76, of South Manheim Township, pleaded guilty to attempting to smuggle goods from the United State to Iran, an offense that carries a maximum sentence of 10 years in prison.
U.S. Magistrate Judge Martin C. Carlson in Harrisburg approved the guilty pleas, according to court documents.
Teresa N. Turner, a Washington, D.C., attorney, said Oertmann and Hetran have accepted full responsibility for the violations and are cooperating in an ongoing investigation by federal authorities. In exchange for their admissions and assistance, Oertmann and the company hope to receive reduced sentences, Turner said.
Iran, which has come under international scrutiny over the last decade for efforts to develop nuclear weapons, is subject to a trade embargo by the United States under a federal law that allows the president to impose sanctions on countries that pose a threat to national security.
American companies are banned from shipping items that can be used for both civil and military purposes without a license from the U.S. Department of Commerce.
Federal prosecutors allege that in 2009 representatives of a company in Iran and the United Arab Emirates that served the oil and gas industry contacted Hetran for a price quote on a horizontal lathe, used to peel steel bars into rods.
According to court papers, the director of the Iranian company warned his sales representative that Hetran was an American company and should not know the final destination of the lathe. Instead, the director suggested, Hetran should be told the machine was destined for the United Arab Emirates.
In June 2009, employees of Hetran traveled to the United Arab Emirates and met with representatives of the Iranian company, who told the Hetran employees they intended to buy the lathe, and discussed how to handle the deal in light of the ongoing embargo against Iran, court papers say.
The Hetran employees discussed handling the transaction through Hetran's German or Indian offices and using non-U.S. employees to train the Iranians on how to use the machine, court papers say.
Over the next three years, while the lathe was being built, Hetran employees and the Iranians discussed ways to disguise the ultimate destination of the machine including using an intermediary in a different country and altering the purchase order to conceal the identity of the buyer, court papers say.
In June 2012, Hetran shipped the machine to the United Arab Emirates, knowingly misstating the final destination as Dubai, court papers say.
Sentencing for Oertmann and Hetran Inc. is scheduled Sept. 17 in Harrisburg.