US Conviction Exposes Iran Sanctions Evasion Through European Front Companies

A federal jury in Boston has convicted Mahdi Mohammad Sadeghi, a 43-year-old dual US-Iranian national from Natick, Massachusetts, of conspiring to export sophisticated American microelectronics to Iran in breach of US sanctions. Following a 14-day trial, Sadeghi was found guilty of one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), together with two substantive counts under the same provisions. Sentencing is scheduled for 13 October, with each count carrying a maximum term of 20 years.

Sadeghi was charged in December 2024 alongside Mohammad Abedini, a Tehran-based engineer who remains a fugitive, and the two were named in a superseding indictment in December 2025. According to court documents, Abedini founded and manages San'at Danesh Rahpooyan Aflak Co (SDRA), an Iranian firm that manufactures the Sepehr Navigation System, a proprietary guidance module sold almost exclusively to Iran's Islamic Revolutionary Guard Corps (IRGC) and fitted to unmanned aerial vehicles (UAVs), cruise missiles and ballistic missiles. Prosecutors state that between 2021 and 2022 approximately 99% of SDRA's Sepehr sales went to the IRGC Aerospace Force, and that a navigation system manufactured by Abedini's company was recovered from the Iranian-made Shahed drone used in the January 2024 attack on the Tower 22 base in northern Jordan, in which three US service members were killed and more than 40 injured.

The mechanics of the scheme will be familiar to anyone assessing dual-use diversion risk. Sadeghi, employed by a Massachusetts microelectronics manufacturer and a co-founder of a US wearable-sensor company, helped procure US-origin components and route them to SDRA. To obscure the ultimate end user, Abedini established a Swiss front company, Illumove SA, which entered into an ostensibly commercial contract with the US manufacturer to evaluate its semiconductors. Under cover of that arrangement, accelerometers, gyroscopes and inertial measurement units, the same categories of component used in the Sepehr system, were transferred to Iran for SDRA's benefit.

For UK practitioners, the case is a textbook illustration of the transshipment typology that current controls are designed to interdict. Navigation-grade accelerometers, gyroscopes and inertial measurement units are controlled dual-use items requiring a licence from the Export Control Joint Unit (ECJU), and the components at issue map directly onto the categories the UK and European Union (EU) have moved to restrict as part of the wider tightening of controls on Iran's drone and missile supply chain. The use of a Swiss intermediary presenting itself as a legitimate research counterparty underscores why beneficial-ownership and end-use scrutiny cannot stop at the immediate contracting party: a plausible evaluation or development agreement in a permissive jurisdiction is a recognised vector for onward diversion.

The exposure for UK firms has also sharpened materially. The IRGC is already designated in its entirety under the UK's Iran sanctions regime, and on 13 July 2026 the government designated the organisation under the National Security (State Threats) Act 2026, extending proscription-style liability to those who provide it with support. Institutions and exporters should treat the fact pattern here — a newly formed intermediary, an ambiguous product-evaluation mandate, sensor and navigation components, and any nexus to Iran — as a composite red flag warranting enhanced due diligence, verification of ultimate beneficial ownership and, where suspicion crystallises, escalation to the National Crime Agency (NCA) or the ECJU as appropriate.

Read the press release here.