Did Iran’s Spies Try to Steal U.S. Stealth Plane’s Secrets?

The apparent downfall of Mozaffar Khazaee began at a freight company in Long Beach, Calif. It was there in November that customs officers cracked open two shipping crates that the 59-year-old allegedly was sending to Iran. Inside, authorities say, was a massive trove of documents for the United States’ next-generation fighter plane, the $392 billion F-35 Joint Strike Fighter. Now Khazaee, a naturalized U.S. citizen from Iran, faces a slew of criminal charges, up to 10 years in prison, and a $250,000 fine.

Khazaee, a former defense contractor who worked on the high-tech stealth plane, was arrested Jan. 9 at Newark Liberty International Airport in New Jersey, where he was in between legs on an international flight. He already had flown from his home in Indianapolis to Newark, and was waiting to catch a connecting flight to Frankfurt, Germany. His final destination? Tehran, authorities say.

Already, the case has raised questions about whether more criminal charges may be filed against Khazaee or people with whom he associated. A criminal complaint filed Jan. 8 in U.S. District Court in Connecticut, where Khazaee lived until recently, charges him with transporting, transmitting and transferring in interstate or foreign commerce goods obtained by theft, conversion or fraud. But the case remains under investigation, with personnel from the FBI, Department of Homeland Security, the U.S. Customs and Border Protection Service, the Air Force Office of Special Investigations, and the Defense Criminal Investigative Service all involved.

According to court documents, investigators are working to determine whether Khazaee broke any laws laid out in the U.S. Arms Export Control Act, the Iranian Transactions Sanctions Regulations, and the International Emergency Economic Powers Act, the latter of which allows the United States to regulate commerce after declaring a national emergency in response to any threat to the nation that has a foreign source. Also of note, while Khazaee does not currently face any espionage charges, the case will be prosecuted by a group that includes an attorney with the Justice Department’s counterespionage section, authorities say.

The case raises complicated diplomatic issues for the United States at a time when the State Department has cultivated a closer relationship with Tehran than it has in years. On Sunday, Iran, the United States and five other world powers announced the specifics of a six-month plan to reduce Tehran’s nuclear program beginning Jan. 20, in exchange for the United States easing crushing economic sanctions that have been in place for years.

A criminal complaint filed in U.S. District Court in Bridgeport, Conn., outlines how federal authorities nabbed Khazaee. It says customs officers inspected a shipment Khazaee had sent from Connecticut to a freight company in Long Beach to be sent to Hamadan, Iran, on the NYK Libra, a Panama-flagged shipping vessel. The documentation for the shipment said household goods were inside the crates, but investigators found "sensitive technical manuals, specification sheets, and other proprietary material relating to the United States Air Force’s F35 Joint Strike Fighter (‘JSF’) program and military jet engines." The freight company was told Khazaee’s shipment was being sent to his brother-in-law, to be held until Khazaee returned to Iran, the criminal complaint says.

On Dec. 4 and 5, agents with the Department of Homeland Security examined Khazaee’s shipping crates. They contained 44 boxes with thousands of pages of documents on the F-35, according to the criminal complaint, signed by Breanne Chavez, a special agent with Homeland Security. Many of the pages indicated they were the possession of three different defense contractors — not identified in the court documents — who have worked on the plane.

Investigators learned later in December that Khazaee had worked previously for "Company A," one of the three contractors whose documents were in his crates, authorities say. He had left the company on Aug. 19 as the company laid off employees. The organization is not identified in court documents, but it is aviation giant Pratt & Whitney, the Connecticut-based company said in a statement to Foreign Policy. Pratt makes engines for the fifth-generation fighter, which is expected to become a centerpiece of U.S. air power in the future.

Pratt & Whitney personnel told federal agents with Homeland Security and the FBI on Dec. 26 that during the Khazaee’s time with the company, his team had conducted strength and durability tests for components of all of Pratt’s engines, including the F119 engine it built solely for use in another Air Force fighter, the F-22 Raptor. Upon leaving the company, Khazaee signed paperwork acknowledging his responsibility to surrender all Pratt-related material, the criminal complaint says.

In December, investigators also interviewed personnel from the other two unidentified companies referenced in the criminal complaint, it says. In both cases, employees said Khazaee had signed agreements stating he would not keep any company documents. Neither corporation is named. A spokesman for Lockheed Martin, the lead company on the F-35, told Foreign Policy that officials there are aware of the investigation and cooperating with authorities, but declined to say whether they were one of the companies cited in the criminal complaint.

As Defense News noted Monday, another company with involvement in the F-35 is Rolls-Royce, which has corporate offices in Indianapolis, where Khazaee last lived before his arrest. A Rolls-Royce official told Foreign Policy that the company was cooperating with authorities, but declined to comment further, citing the ongoing investigation.

The incident is the latest for the F-35 program that has both national security and diplomatic implications. Reuters reported earlier this month that the Pentagon repeatedly waived laws banning the use of Chinese parts in the aircraft to keep the program on schedule in 2012 and 2013. Congress’ investigative agency, the Government Accountability Office, is currently reviewing what happened, Reuters reported. Computer hackers also have targeted F-35 program information repeatedly, dating at least as far back as 2009.

The Pentagon is aware of the Khazaee case, said Joe DellaVedova, a spokesman for the F-35 program.

"The F-35 Joint Program Office has been alerted to the investigation, and will cooperate fully with legal authorities pursuing the case," he said. "No additional comment will be made while the investigation is ongoing."