Mon, 05 Feb 2018 20:00 UTC
To all appearances, Ahmad Sheikhzadeh led the life of a typical New York academic. A 62-year-old Columbia University Ph.D., he lived alone in a small West Village rental, practiced yoga, attended lectures with friends, and conducted research at New York University’s labyrinthine Bobst Library. On Fridays, he’d travel uptown to a building at the corner of 40th Street and Third Avenue to work at Iran’s Mission to the United Nations, stepping directly into one of the most dangerous flashpoints in global politics.
As Sheikhzadeh left his weekly briefing one day in March 2016, an FBI agent approached him. The agent did not immediately detain Sheikhzadeh, according to court filings; instead the investigator brought him to a hotel for questioning. Over the course of the night, the agent revealed that Sheikhzadeh was the subject of a sealed indictment in the Eastern District of New York.
Eventually, the agent made his pitch. The FBI asked Sheikhzadeh “to cooperate with the government and to spy on his employer even though the charges against him did not include anyone else employed at the Mission,” according to court documents.
When Sheikhzadeh refused, he was charged with falsifying his tax returns, followed by other, more serious accusations, including money laundering and conspiracy to violate U.S. sanctions against Iran.
Sheikhzadeh’s prosecution – and the accusations traded between the government and his defense counsel – open a window on intelligence efforts unfolding in the wake of the Iran nuclear agreement and the role of federal law enforcement in the political rivalry between Washington and Tehran. At a moment when the White House and congressional Republicans are criticizing the FBI for politicizing the investigative process, Sheikhzadeh’s case puts a human face on the inherently political nature of prosecutions involving foreign powers.
On Friday, a federal judge in Brooklyn sentenced Sheikhzadeh to three months for tax fraud and sanctions violations. The sentence was an unusually public rebuke of an unsuccessful covert operation.
The case culminated with a rare scene in federal court: a defendant being called as a witness at his own sentencing. The 3 1/2-hour hearing provided a strange footnote to the nearly 40-year conflict between the U.S. and Iran, which has included the bombing of a U.S. Marine barracks in Beirut; the downing of an Iranian civilian airliner by the U.S. Navy; Iran’s use of proxy militias in Iraq, Lebanon, and Syria; the detention and disappearance of U.S. citizens in Iran; nuclear sabotage; cyber warfare; and, increasingly, the use of federal criminal prosecutions. Most notably, it raised the question of whether Sheikhzadeh’s real crime was not picking a side.
Ahmad Sheikzadeh first came to the United States alone as a teenager in 1973 and remained, studying electrical engineering and political science and, ultimately, receiving his doctorate. Since the late 1990s, he had been employed as a “consultant” to the Iranian Mission to the United Nations, acting as an outside political analyst who crafted weekly reports collating news stories and provided in-person briefings for Iranian officials at the Mission. During his career, the relationship between the U.S. government and Tehran has deteriorated. The regime’s support for the Lebanese militia Hezbollah was eclipsed by an even more pressing national security issue: Iran’s progress toward a nuclear weapon.
On the night of his impromptu interrogation in March 2016, the FBI agent who questioned Sheikhzadeh produced a photograph of missing former FBI Agent Robert Levinson, who had disappeared under mysterious circumstances while traveling to Kish Island off Iran in 2007. The agent then proceeded to question Sheikhzadeh about his finances.
That evening, Steve Zissou, a criminal defense attorney from Bayside, Queens, received a message from a prosecutor in the Eastern District of New York saying they had a person in custody who “wanted to cooperate.” Zissou was uniquely qualified to take the case. A seasoned former Queens County prosecutor, he had defended Ahmed Ghailani, a conspirator in the 1998 U.S. embassy bombings in Kenya and Tanzania; Jamaican drug don Christopher “Dudus” Coke; and Bryant Neal Vinas, an American Al Qaeda trainee flipped by the Eastern District. Zissou also had the necessary clearances to take a case that involved classified information, as this one did.
But when Zissou arrived at the courthouse the following morning, Sheikhzadeh made it clear that he would not cooperate. He had told the agents during the overnight interrogation “that over the years, he had had many opportunities to work in the intelligence community, but it was not something he wanted to do. He told agents that his goal was to help the Iranians and the Americans to live in peace,” according to court documents.
The government downplayed the coercive nature of its encounter with Sheikhzadeh, in which the FBI detained a U.S. citizen, told him he was the subject of a sealed indictment, and asked him to spy on its behalf, calling it “nothing remarkable.” Yet that undersells Sheikhzadeh’s potential value as an intelligence source. Not only did he have access to and possible influence over senior Iranian officials, but he was also not operating within a high-risk, denied environment like Tehran, where the FBI has little access to help its assets. Instead, he was living, studying, and working in Manhattan alongside millions of New Yorkers.
The book the government eventually threw at Sheikhzadeh made for light reading. Relative to other recent sanctions cases in New York, the sums involved in his case are minuscule: nearly $172,000 in unreported income and $187,200 transferred to Iran in violation of sanction over five years. (Sheikhzadeh’s attorney says that the transactions were for “family friends” and included money for medical expenses and for a friend to expand a dental practice in Iran; he denies receiving any fees for the transfers, which the government provided no evidence of.)
In January, prosecutors in the Southern District of New York obtained a conviction against Mehmet Atilla (the co-defendant of gold trader Reza Zarrab), who facilitated a billion-dollar oil-for-gold scheme that implicated the governments of Iran and Turkey. The Eastern District’s two prior significant sanctions cases involved a Texas business that sold $30 million in microchips to companies linked to the Russian military and intelligence services and a deferred prosecution against HSBC, which admitted to $660 million in prohibited transfers.
Both the U.S. Attorney’s Office and the FBI declined comment on Sheikhzadeh’s case, but the government’s position is clear: “The defendant is no different from any other criminal defendant,” according to court documents. “He committed crimes, and he was prosecuted for them.”
Sanctions prosecutions are inherently political. Charging decisions are approved not by the local U.S. attorney, but also the National Security Division at the Justice Department in Washington. And politics often determine a defendant’s fate in such cases. “When the defendant goes along with the politics,” said Sabrina Shroff, a federal public defender who has represented clients accused of sanctions violations involving Iran, Russia, and China, they often get a reduced sentence at the government’s request. “When politics and the defendant part ways, the defendant is prosecuted as though he were a political agent of the foreign country.”
Sheikhzadeh’s arrest occurred against the backdrop of the Iran nuclear deal, which went into effect months earlier and resulted in a mutual release of prisoners. Five male U.S. citizens imprisoned in Iran, including Washington Post reporter Jason Rezaian, and seven Iranians in U.S. custody were freed. The deal also resulted, as Politico reported, in the U.S. dropping charges against at least 21 Iranians accused of serious violations, including exporting materials for the operation of centrifuges.
In November 2016, Sheikhzadeh accepted a deal and pleaded guilty to two of the seven counts in his indictment: falsifying his tax return, and violating the International Emergency Economic Powers Act that governs the Iran sanctions regime. Sheikhzadeh was not charged with espionage or acting as an agent of a foreign government. But this past June, the government accused him of “recruiting” a nuclear scientist, “influencing” Farnaz Fassihi, a Wall Street Journal reporter, and enabling the Iranian government’s negotiations in the nuclear deal, a development that elevated the political stakes in his case and argued for a stiffer sentence. (A spokesperson for the Wall Street Journal said, “We decline to discuss Farnaz Fassihi’s sourcing. Her reporting is independent and in keeping with the Journal’s long tradition of tough and fair journalism.”)
The government acknowledged that Sheikhzadeh’s “financial transactions were not specifically related to Iran’s nuclear program or military objectives.” But in its June 2017 request for a prison term over five years, prosecutors produced 41 excerpts from intercepted emails and phone calls that seek to show efforts to aid Iranian officials and work on the nuclear negotiations with Behrad Nakhai, an outspoken nuclear scientist who has lived and worked in the United States since the 1960s.
In an interview with The Intercept, Nakhai called the charge that Sheikhzadeh had recruited him “idiotic.” As an Iranian citizen, he had been in contact with the Iranian Mission on consular issues long before the two men met, while Sheikhzadeh was completing his Ph.D. in the mid-1990s. Nakhai is an unlikely figure: a non-U.S. citizen who holds a green card and has lived in the U.S. since 1966 while working for sensitive employers. He has held positions at the Oak Ridge National Laboratory and the New York Power Authority, while being an outspoken advocate for a peaceful resolution to the nuclear crisis between the U.S. and Iran.
In 1998, Nakhai even tried to broker an early nuclear inspections regimen at Tehran’s request, he told The Intercept, but could not get approvals from the U.S. Nakhai takes exception to the charge that he could help Iran’s uranium enrichment program. His background is in reactor safety, and he was interviewed and fingerprinted by the FBI in his prior position at Oak Ridge.
“How they came out with this allegation, that escapes me,” Nakhai said. “How they lie about that? Are they inept that they cannot make the distinction [between reactor safety and uranium enrichment]? Or are they so nefarious in their activity that they are going to that length to do this?”
In one exchange, the government reports:
[I]n November 2005, the defendant and the Scientist discussed contacting [Iranian Foreign Affairs Minister Mohammad Javad] Zarif regarding Iranian nuclear negotiations. The Scientist offered to contact Zarif directly, and the defendant advised the Scientist not to “discuss anything over the phone with the [IMUN].” The Scientist proposed a meeting with Zarif at the Scientist’s home because the “house [was] clean – no bugs – and the setting is more relaxed.” Later, the Scientist corresponded directly with Zarif, and he arranged to meet with Zarif at Zarif’s office at the IMUN.
Nakhai said that he was referring to bed bugs, rather than surveillance equipment. The exhibit containing the full email remains under seal, but Sheikhzadeh offered the same explanation at his sentencing.
“We always joked about things,” Nakhai said. “I said if I invited [Zarif], we shouldn’t have to worry about the bugs.” (Sheikhzadeh’s West Village apartment building is listed on the Bed Bug Registry.)
The most damning allegation from the government says, “The Scientist falsely denied being in contact with Iranian government officials regarding nuclear enrichment or any other topic.” When Nakhai was stopped by FBI agents as he boarded a flight to Iran at JFK Airport in 2008, he “did admit to knowing Zarif, although he denied providing any specific information about nuclear issues to Zarif.”
Nakhai says that he only met with politicians, including then-Secretary of the Supreme National Security Council and now-President Hassan Rouhani. (Nakhai has never been publicly charged in connection with any of the allegations that the government put forward in its sentencing materials for Sheikhzadeh, including lying to the FBI and smuggling sensitive information out of the U.S.)
The relationship between Sheikhzadeh and Nakhai raised the stakes in Friday’s sentencing and, in the government’s view, justified the stiff sentence prosecutors sought.
“Once the N-word” – nuclear – “is out there, then that becomes the defining feature of the case,” said Zissou, Sheikhzadeh’s attorney, who asked that his client be spared jail time.
Zissou surprised the government when he called his client to testify on Friday. His questioning turned the typically rote procedure into a public examination of the government’s allegations that Sheikhzadeh colluded with Iranian officials. Zissou said he wanted to demonstrate that his client is “not the person they say he is.”
At one dramatic moment, Nakhai entered the courtroom and took a seat in the back row. The government had declined to give him immunity to testify at the sentencing, and the judge asked him to leave since he was a potential witness.
Assistant U.S. Attorney Peter Baldwin, an experienced counterterrorism prosecutor, pressed Sheikhzadeh on his role at the Mission; his relationships with senior officials in Iran’s government, including Rouhani; the fact that he had received his cash salary from officials identified as Iranian intelligence; and his detailed questions of Nakhai on issues related to nuclear technology.
“What did the officials at the Iranian Mission do with your weekly reports?” Baldwin asked.
By turns defiant and exasperated, Sheikhzadeh portrayed himself as a political scientist striving to understand the technical controversies underpinning the fraught nuclear negotiations between the United States and Iran.
“Is it a crime to learn about the details of the difference of how a heavy-water and light-water reactor works?” he asked.
While Judge Pamela Chen questioned Sheikhzadeh about the nature of his financial transactions and the allegations that he colluded with Iranian officials, she reserved her most pointed questions for the government.
“I can’t figure out for the life of me what it is you think Dr. Sheikhzadeh was doing,” she told prosecutors at one point.”I feel like you’re painting the picture with only the skeletal outlines and asking me to fill it in. I can’t do that.”
Baldwin reinforced the seriousness of the tax and sanctions crimes, but acknowledged: “Is it him passing nuclear secrets? No, it’s not.”
Shortly before he was sentenced, Sheikzadeh read a prepared statement. His voice rose in anger as he said he was being punished because he had refused to become an FBI informant, even under threat of prosecution.
“I refused to secretly spy,” he said, “because my honor meant more to me than my freedom.”
His prosecution was political, he said, an extension of the bitter rivalry between the nation of his birth and the one where he’d chosen to spend his life.
“Can any other inference be drawn?” he asked the judge. “Is there any other reasonable conclusion?”