French Corporation Pleads Guilty to Conspiracy, Illegal Export, and Attempted Illegal...

French Corporation Pleads Guilty to Conspiracy, Illegal Export, and Attempted
Illegal Export of Cryogenic Submersible Pumps to Iran

WASHINGTON, April 10 /PRNewswire-USNewswire/ -- Cryostar SAS, formerly known
as Cryostar France ("CRYOSTAR"), a French corporation, headquartered in
Hesingue, France, has pleaded guilty to conspiracy, illegal export, and
attempted illegal export of cryogenic submersible pumps to Iran, U.S. Attorney
Jeffrey A. Taylor and Assistant Secretary of Commerce for Export Enforcement
Darryl W. Jackson announced today.

CRYOSTAR pled guilty earlier today before the Honorable Colleen Kollar-Kotelly
of the U.S. District Court for the District of Columbia to one count of
Conspiracy, one count of Export without an Export License, and one count of
Attempted Export without an Export License. Pursuant to a written plea
agreement, CRYOSTAR must be sentenced to a criminal fine of $500,000 and
corporate probation of two years when the company is sentenced by Judge
Kollar-Kotelly on July 17, 2008.

"Foreign parties that choose to export U.S.-origin goods to embargoed
destinations, such as Iran, violate our export control laws," said Assistant
Secretary Jackson. "As this case demonstrates, we will vigorously pursue such
violations."

"Export restrictions should not be viewed as avoidable obstacles, but rather
as fundamental safeguards for the protection of our national interests,"
stated U.S. Attorney Taylor. "This prosecution should serve as a reminder that
failure to comply with U.S. export control laws can have severe consequences."

The evidence in this case established that CRYOSTAR, with business locations
around the world including in the United States, specialized in the design and
manufacturing of cryogenic equipment, such as pumps, turbines, compressors and
automatic filling stations that were used to transport and process natural
gases at extremely cold temperatures. Ebara International Corp., Inc.
("Ebara") was a Delaware corporation with its principal place of business in
Nevada. Ebara engaged in the business of designing and manufacturing cryogenic
pumps for various uses, including for pumping fluid hydrocarbons that have
been cooled to cryogenic temperatures (280 degrees below zero). Ebara
specialized in the design and manufacturing of cryogenic equipment, such as
pumps, turbines, compressors and automatic filling stations that were used to
transport and process natural gases at extremely cold temperatures. "TN" was a
French company with a U.S. subsidiary.

In 2001, TN arranged to purchase cryogenic submersible pumps from Ebara for
delivery to an Iranian company for installation at the 9th and 10th Olefin
Petrochemical Complexes in Iran. CRYOSTAR agreed to facilitate this
transaction by serving as the middleman for TN and Ebara, by purchasing the
pumps from Ebara, by reselling them to TN (which forwarded the pumps to Iran),
and by falsely indicating that the final purchaser was a French company that
would install the pumps in France, when all parties to the transaction knew
that the ultimate and intended destination of the pumps was Iran.

The conspirators developed a plan to conceal the export of cryogenic pumps to
Iran, under which Ebara would sell and export the pumps to CRYOSTAR in France,
which would then resell the pumps to TN, with the ultimate and intended
destination being Iran. The conspirators set forth the plan on a "matrix,"
which they used as a roadmap, including various procedures to be followed by
each company to protect their conduct from detection by United States law
enforcement, which included the following:

1) requiring that all paperwork be passed through the London office of Ebara
which would eliminate references to Iran and TN on paperwork going to Ebara in
the United States and which would replace Ebara references with the letterhead
and template of CRYOSTAR on engineering drawings, letters and reports on
paperwork going to TN and Iran;

2) creating false purchase orders

i) from CRYOSTAR to Ebara stating that CRYOSTAR, not TN, was the purchaser,
and France, not Iran, was the ultimate and intended destination and
ii) from TN to CRYOSTAR stating that CRYOSTAR, not Ebara, was the supplier,
and that France, not the United States, was the country of origin for the
pumps;

3) permitting only limited witness testing of the pumps in the United States
by TN and not at all by the Iranian customer;

4) transferring responsibility for all installation, commissioning,
maintenance, testing, and training in Iran from Ebara to CRYOSTAR and allowing
participation by Ebara personnel from Ebara's London office only in "extreme
situations" and no participation by Ebara personnel from the United States
"under any circumstances";

5) omitting all Ebara labels and stamps on the pumps' component parts before
export to conceal the true country of their origin;

6) replacing Ebara labeling and stamping of the pumps' component parts and
accompanying shipping documents with CRYOSTAR identifiers after export to
France so the country of their origin appeared to be France rather than the
United States;

7) purchasing as many component parts as possible from non-U.S. suppliers and
importing them into the United States for assembly by Ebara to avoid using
parts with U.S. certificates of origin and addressing questions from U.S.
suppliers regarding end-users; and

8) shipping the pumps from the United States through Canada, and then to
France for re-labeling, before shipment to Iran for installation at the 9th
Olefin Petrochemical Complex.

Following the procedures set forth in the "matrix," the conspirators
manufactured four pumps, and shipped them, in January 2003, for installation
at the 9th Olefin Petrochemical Complex in Iran, ("First CRYOSTAR Order"). The
total value of the First CRYOSTAR Order was approximately $746,756.

The conspirators prepared three additional pumps to be shipped to Iran in the
fall of 2003, for installation at the 10th Olefin Petrochemical Complex in
Iran ("Second CRYOSTAR Order"). The total value of the Second CRYOSTAR Order
was approximately $1,125,055. The conspirators halted shipment of the Second
CRYOSTAR Order because of this investigation.

The conspirators attempted to cover up their illegal conduct by creating false
correspondence confirming that none of the pumps were sent, or were intended
to be sent, to Iran.

None of the conspirators sought and obtained export licenses for either the
First CRYOSTAR Order or the Second CRYOSTAR Order.

Ebara and its former president pled guilty and were sentenced at an earlier
stage in this investigation.

CRYOSTAR's guilty plea is the result of an investigation by the U.S.
Department of Commerce, Bureau of Industry and Security.

In announcing today's guilty plea, U.S. Attorney Taylor and Assistant
Secretary Jackson commended the efforts of Commerce Special Agent Norma
Curtis. They also praised Assistant U.S. Attorney Jonathan M. Malis, who is
prosecuting the case.

SOURCE U.S. Department of Justice

Channing Phillips of the office of United States Attorney Jeffrey A. Taylor,
District of Columbia, +1-202-514-6933, +1-202-514-7566