Cheng Mingfu, a Chinese businessman accused by the United States of financing the development of a secret missile program in Iran, has made transactions from Mexico of alleged money laundering, U.S. government reports reveal.
Investigations by the Financial Crimes Enforcement Network (FinCEN), a Treasury Department office dedicated to tracking financial crimes, identified Cheng Mingfu in a residential area of the city of Leon, Guanajuato, from where he allegedly operated arms financing for Iran.
His address was located in an oriental restaurant on Alonso de Torres Boulevard, near the Plaza Mayor shopping center in Leon, whose shareholders are two Chinese citizens who arrived in Mexico in 2003, as corroborated by the Commercial Registry.
Mingfu was born in 1980 in the Chinese province of Anhui, and on January 17, 2016, was designated by the U.S. government to support actions for the production of weapons of mass destruction, so his assets were frozen and he was included in the list of the Office of Foreign Assets Control (OFAC), Department of the Treasury.
"Iran's ballistic missile program poses a significant threat to regional and global security, and will continue to be subject to international sanctions," said Adam J. Szubin, acting assistant secretary for terrorism and financial intelligence when Mingfu was placed on the OFAC list, which consists primarily of drug traffickers, financial criminals, and terrorists from around the world.
Mingfu's financial activities are detailed in confidential reports prepared by banks and financial institutions and delivered to FinCEN, to which Mexicans Against Corruption and Impunity (MCCI) had access as part of a journalistic project coordinated by the International Consortium of Investigative Journalists (ICIJ). The documents were shared by BuzzFeed.
Report 31000088049421, prepared by FinCEN on June 24, 2016, states that the New York branch of the British bank Standard Chartered Bank had identified 316 suspicious transactions between January 11, 2010, and March 26, 2015, for US$13 million 253 thousand sent or received by Mingfu and companies with which it has business ties, including Anhui Land Group Co. (of which it is a shareholder), Mabrooka Trading and Candid General Trading LLC.
Mabrooka is a Chinese electrical, chemical, and electronic parts and accessories company; Anhui is its subsidiary, which manufactures industrial components such as wire, cable, and automatic systems, while Candid is identified as a Dubai-based computer and clothing retailer. All three firms are registered with OFAC.
According to the documents, Minfgu used an account at Intercam Casa de Bolsa to send money from Mexico, and another account at the Bank of China in New York.
While his company Anhui participated in this transfer scheme through accounts at Ping An Bank Co. in Shenzhen, the Export-Import Bank of China, the Agricultural Bank of China, and the China Construction Bank, in addition to using the US banks JP Morgan Chase Bank and Citibank in New York.
The other two companies targeted in this money laundering scheme - Mabrooka and Candid - used four UAE banks.
FinCEN's report claims that Mingfu and the companies with which it is linked buy inputs for missile production, but mislead suppliers about the use that will be made of those raw materials.
The end-user of these inputs would be the Navid Composite Material Company, an Iranian company that has been on the OFAC list since 2013 because of its involvement in the production of weapons components.
According to a fact sheet prepared by the Department of Treasury, Navid has undertaken since 2012 a project to build a factory in the Iranian city of Rasht, on the coast of the Caspian Sea, with the capacity to produce 150 tons per year of carbon fiber for its probable use in ballistic missile components. In December 2013, Navid was placed on the Treasury Department's so-called "blacklist" (its official name is Specially Designated Nationals and Blocked Person List) because of suspicions that the factory would produce war materials, and its assets were blocked.
FinCEN's confidential reports, which were reviewed by MCCI, determined that despite the restrictions, Mingfu - a Chinese citizen residing in Mexico - negotiated agreements to provide financial, material, and technological resources to Navid.
The investigation by U.S. authorities found indications that the companies involved in this scheme acquired inputs for civilian purposes that may have military applications, as occurred in the following Mabrooka transactions:
The company referred funds to Independent Laboratory Supplies Pty, Ltd., a supplier of laboratory supplies for mining; in this case, the suspicion is that mineral products, such as zinc and aluminum, were obtained that can be used in rocket propellants.
It also sent funds to Teloon Chemicals International, a producer of kerosene wax, a substance identified as a solid propellant for hybrid rocket engines, and to Ding Sheng International Hong Kong Holdings Ltd. which sells computer equipment that may have been used in telecommunications for ballistic programs.
While Anhui transferred funds to Solcom Hapn Shanghai Electric Co. Ltd., a manufacturer of a substance used to create carbon fiber; to Analogic Canada Corporation, a Canadian medical technology company that U.S. authorities suspect may have been used for military purposes.
According to the report, the Candid company sent money to PT South Pacific Viscose, a producer of substances used to create a stronger carbon fiber, and paid manufacturers of aluminum equipment, the metal used to build missiles.
In all cases, authorities suspect that the transactions reflect the acquisition of items to support Iran's weapons of the mass destruction development program.
Standard Chartered Bank reported that it had identified seven transfers of $1,723,000 from Mabrooka to Riking International Business, a company from which they were unable to identify its activity or the reason for the transfer of funds. Some of these transfers occurred on the same day and in round dollar amounts, which FinCEN believes is an indication of possible money laundering.
Riking was a shell or paper company (which exists only on record and has no facilities or employees) that had been established in the British Virgin Islands.
In addition, patterns of money transfers were identified that may cover up irregular business. For example, Mabrooka transferred funds for the alleged payment of frozen fish and shrimp, and glassware.
Candid originated payments for sandwich makers to a solar energy company (Tsinghua Solar Systems), a window manufacturer (Decormaster Industrial Co.), and a parking lot producer (Sino Aps Company), which had nothing to do with its line of business.
Mock of OFAC sanctioning
According to a report by data intelligence firm Sayari, Chen Mingfu's business network was still active in May 2020 despite sanctions and alerts issued by OFAC four years earlier.
His company Anhui closed in February 2016, after being listed by OFAC, but Sayari's investigation identified that Mingfu still owns 40 percent of the stock of a company in China that has also transported goods to Iran.
Business records indicate that in 2015 this company, which continues to operate, transported goods to Iran from Anhui Province related to machinery and mechanical devices or pump parts. In addition, Sayari located two other companies in China with links to Mingfu.
By Raul Olmos Source Monitor economico de Baja California