CEO of Iranian Engineering Firm Arrested for Illegally Exporting Sophisticated Electronics to Iran in Violation of US Sanctions

The CEO of a Tehran-based engineering company has been arrested in the United States on allegations of orchestrating a covert export scheme that illegally supplied sophisticated electronics from the United States to Iran.

Bahram Mohammad Ostovari, 66, a dual resident of Santa Monica and Tehran, was taken into custody at Los Angeles International Airport on Thursday, following the unsealing of a four-count federal indictment

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According to the indictment, Ostovari founded and led “Company A”, an Iranian engineering firm supplying railway signalling and telecommunications systems, including for the Islamic Republic of Iran Railways. Prosecutors allege that from at least May 2018 until July 2025, Ostovari and his co-conspirators procured and shipped advanced computer processors, railway signalling equipment and electronic components to Iran, in direct breach of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).

To conceal the true destination of these US-origin goods, Ostovari allegedly operated two front companies based in the UAE — MH-SYS FZCO and Match Systech FZE — which falsely claimed to be the end users. In reality, the equipment was shipped from the UAE to Company A in Iran.

Even after obtaining US lawful permanent residency in May 2020, Ostovari is accused of continuing to export restricted electronics and components to Iran without the necessary authorisation from the US Treasury Department’s Office of Foreign Assets Control (OFAC). Emails cited in the indictment reveal Ostovari’s awareness of the sanctions regime, with instructions allegedly given to a co-conspirator to provide false information to a US export control officer about the final destination of the shipments.

The IEEPA and ITSR prohibit the export, re-export, sale or supply of goods, technology or services from the United States to Iran or the Government of Iran without OFAC authorisation. These controls are part of broader efforts to mitigate threats posed by Iran to US national security, including its nuclear ambitions and sponsorship of terrorism.

Ostovari is charged with one count of conspiracy to violate IEEPA and three counts of substantive IEEPA violations. If convicted on all counts, he faces up to 20 years in prison for each offence.

The investigation is being led by Homeland Security Investigations and the Department of Commerce’s Bureau of Industry and Security. The case is being prosecuted by Assistant US Attorneys David C. Lachman and Colin S. Scott for the Central District of California, with assistance from the National Security Division’s Counterintelligence and Export Control Section.

This high-profile case underscores the rigorous enforcement of US sanctions against Iran and highlights the scrutiny of international supply chains involving sensitive technologies.

Read the press release here.