June, 17th, 2008: A café in Bursa, in western Turkey. Most of the customers are sipping their sweetened tea, chatting about Turkey’s national soccer team trouncing the Czech Republic 3-2 – and how they will do in the up-coming European championship quarter finals. At one table, three stately, earnest-looking men are huddled together, speaking in English. They look nervous.
Twice now, Turkish customs’ agents have stopped their shipments to Teheran. How are they supposed to get the damn German graphite into the country?
It is ten tons of the finest grain and highest density. Their clients in Teheran are running out of patience.
They need the premium grade graphite to build a nuclear missile.
And the three men at the coffee shop table are the ones with the know-how to smuggle embargoed goods into Iran. The man in the middle, Iranian Said Mohammad Hosseinian, has been the main supplier for the Iranian missile program for years.
The Iranians pay cash
He oversees a network of more than 100 front companies. Hans-Josef H., 63, born in Bavaria and raised in Cologne, has become a multi-millionaire by trading in graphite. He knows how to fake export documents and erase any traces leading to the final customer. His Turkish friend and partner, Nusret Iyici, works as the middleman for H.’s deals with Hosseinian. The Iranian pays him in cash, in rolls of dollar bills.
But now they have to give the Iranian some of that money back. A 60,000 Dollar deposit for the next deal. It has been stalled for months. H.’s graphite blocks are sitting at the edge of the Westerwald at his company in Buchholz-Mendt. The three men sitting in the smoky café debate different routes. Should they take it through Romania? Azerbaijan?
None of the ideas seem brilliant. Lost in thought, they don’t notice a Turkish secret service agent taking their picture.
Wednesday, April 8th, 2009. The day a smiling Iranian President Mahmoud Ahmadinejad says he welcomes US President Obama’s call for a world free of nuclear weapons Hans-Josef H. enters Courtroom 10 at the Appellate Court in Koblenz. He is wearing a dark jacket and handcuffs.
A master of concealment
According to the federal prosecutor, H. is accused of smuggling sixteen tons of graphite into Iran and attempting to smuggle two further shipments. Nine months of investigative custody have done their toll, but H. has not admitted to anything. “I deny all charges,” he says. The next trial day, an expert from the German Foreign Intelligence Service takes the stand.
Chief government head Klaus-Martin T. explains how dangerous H.’s deals with Hosseinian really are.
Speaking quietly, T. calls Hosseinian “one of the most wanted men in the world”. He calls Hosseinian a phantom, a master of disguises, “who for years has been procuring for Iran everything the country is unable to attain legally.”
High quality graphite is “one of the few materials” that Teheran still needs to buy from outside the country in order to get its nuclear missile program off the ground. “They can do everything else themselves,” he says.
Graphite of this quality is so heat-resistant that it can be used for missile jets, thrusters and nosecones. Klaus-Martin T. says Iran is currently focusing all its efforts on missiles that could reach any target in Europe. Missiles constructed in such a way that fitting them with conventional warheads would be senseless. They are ballistic missiles “to be equipped with nuclear warheads”.
The right to develop nuclear energy for civilian use
Shortly thereafter, Hans-Josef H. confesses: “I regret my actions. All of the charges against me are true. I want to finally bring this dark chapter of my life to a close.”
For years, the world has worried about what would happen if the Mullahs got their hands on a nuclear weapon. Israel and the United States have warned that Iran’s nuclear program would lead to the ultimate weapon of mass destruction.
Iran has denied these charges and has insisted on their right to develop nuclear energy for civilian use.
The United Nation’s Security Council has repeatedly demanded that Iran stop its uranium enrichment program. But despite sanctions, Teheran has expanded the program further.
The regime has played a game of cat and mouse with inspectors from the International Atomic Energy Agency. It has denied them access to the program’s military sites and kept them from discussing the program with key players.
Israel is prepared to use any means to prevent Iran from becoming a nuclear force and will not stop from unilateral military action, if necessary.
How a bomb becomes a real threat
For months, stern’s investigative reporters have traced Iranian attempts to supply its technicians with the necessary parts and materials. In the process, they hit upon a network of German companies that seem to be providing the regime with materials for the production of precise target missiles. Most of the supplies could also be used for peaceful, civilian purposes. But the effort and degree of secrecy surrounding the network imply that the materials and parts are intending to be exploited for military purposes.
In fact, the manner and intensity of Iranian efforts to attain these might indicate an advanced level of nuclear weapon production.
The engineers do not seem to be focusing their efforts on the production of explosive, highly enriched uranium. They seem to be working intensely on a vehicle to transport these bombs – to transport them far enough and with precision.
It is the missile that could turn the bomb into a real threat.
The German Foreign Intelligence Service has told stern it believes there is nothing stopping Iran from developing a nuclear weapon. According to their assessments, Iran could be able to produce a finished warhead within a short amount of time and – like North Korea – follow through with an underground nuclear test.
“If they want to, they should be able to ignite a uranium bomb within the next six months,” experts at the German Foreign Intelligence Service said.
"No one would have thought that could happen"
Based on the information gathered by the secret service, Iran has all the technology it needs for uranium enrichment and it has enough centrifuges to produce explosive uranium.
“No one would have thought that could happen, even just a few years ago,” they say. But the experts at the intelligence agency know enough about the centrifuge cascades at the nuclear site in Natan and the secret procurement activities Iran has been involved in to give a pretty exact approximation of when Iran will be able to produce weapons-capable uranium – and how much.
The IAEA has also commented on the highly volatile situation. Its inspectors reported in June that Iranian technicians had installed 7000 centrifuges in Natan alone. 4920 of them are still in operation and have enriched roughly 1.3 tons of uranium to date. Experts say that would be enough to produce between one and two nuclear bombs within the next three to six months. Based on the deals they know about, German secret service believe that there are other secret production sites as well.
The German Foreign Intelligence Service has no doubts
Almost no one knows more about the Mullah’s secret nuclear weapons program than the German Foreign Intelligence Service. Informants gave the Germans a laptop used by Iranian nuclear scientists with plans for the construction of a nuclear warhead for the Schahab-3 missile, a medium-range ballistic missile developed by Iran. For more than a decade, the German secret service had an Iranian businessman with a Canadian passport on their payroll. Up until 10 months ago, he provided agents in Berlin with files under the code name “Sindbad”. He had access to information because he was also providing Iran with materials for missile construction worth millions and millions of Euros.
Building a nuclear weapons-capable missile is still the greatest challenge facing Iranian engineers.
The German Foreign Intelligence Service says it has “no doubt” that the Iranian missile program is “solely” aimed at transporting nuclear warheads. Teheran should be able to produce its own ballistic missile with this capacity within the next three years.
The man doing all he can to ensure that the Mullahs reach that goal even sooner lists his address as the Vozara Building in Teheran. There, from apartment number 70 on the sixth floor, Said Mohammad Hosseinian runs his slew of front companies. They are Hobab International Co. Ltd, Joza Industrial or Ward International, and they all have the same address: Khaled Islamboli Avenue in Teheran, which has now been renamed Intifada Street.
The German Foreign Intelligence Service, BND, lists many of these companies in its “early warning briefings”, confidential lists with the names of companies and organizations that have supplied the Iranian regime with so-called “dual use goods”, products that can be used for both civilian and military purposes. These goods cannot be exported to Iran without permission. They include lipstick tubes, because they can be used to make bullets, and chemical fertilizer, which is a component in explosives.
Sapico works like a holding company
Every year the German Foreign Intelligence Service sends a 70-odd page document to business organizations and chambers of commerce so they can warn their member companies about doing business with front companies working for the Iranian military. In it, the BND warns that “Iran is still running a very ambitious carrier rocket program.” “Nearly every day there are import or procurement requests for various projects being registered around the world.” Often, Hosseinian is behind one of those companies. He separates packages into smaller shipments to divert suspicion and directs them through other countries.
He seeks out partner companies who, for the right money, are willing to violate export regulations.
The Iranian organizes navigational and steering equipment, special machinery, measuring instruments and materials.
According to the information gathered by the BND, Hosseinian’s ascension to become the Mullahs’ chief supplier began in 1997 when he was hired as CEO of Sapico.
Sapico was like a holding company for various front companies and is a subcontractor of facilities that are directly controlled by the Iranian Ministry of Defense.
The case Hans-Josef H.
According to stern investigations, Hosseinian is in his late 50s, and married with two daughters. He wears a Rolex, has a five o’clock shadow and parts his grey hair. The German Foreign Intelligence Services have a photograph of Hosseinian, but it is outdated and out of focus.
German investigators know four of his aliases. At times he calls himself an engineer, other times a hydro-geologist. Businessmen who have worked with the Iranian know him as a car dealer, who imports Mercedes sedans to Teheran. What they do know is that they know very little about him. Hosseinian remains a mystery man.
The case of Hans-Josef H. is typical for how he works. In the 1980s, H. was responsible for the Middle East exports of the company Ringsdorff, which is where he learned about the trade in graphite. Electronic semiconductor and solar industries are reliant on the material, which in certain quality categories is twenty times more expensive than steel. H. organized graphite exports to Iran.
In 1985, the petroleum sales representative went into business for himself and founded his own graphite company. Business was so good that he soon had millions hidden away in various bank accounts. He owned two homes, a hotel project in Turkey, and property on the Seychelle Island Praslin, where he was planning to build a luxury resort.
Graphite in small amounts
In 2001, Hosseinian found out about the hotel project in Turkey. The two men spoke on the telephone and the Iranian made it clear that he wanted to invest as a silent partner. But in truth, Hosseinian was interested in the German’s valuable graphite. He knew that H. bought premium grade material from a few select companies. H.’s company then refined the material and sold it for a profit margin of up to 200 percent.
In 2003, H. sent seven shipments from Westerwald to Teheran. Just small amounts - Hosseinian apparently didn’t want to put too much pressure on his new source. H. was asked to deliver to different companies, all with the same address: the Vozara Building in Teheran. German customs agents became suspicious. According to the UN edict, H. should have had the deliveries pre-approved. He was investigated and walked away with a 1000 Euro fine.
Around the same time, it was revealed that Iran had been keeping its uranium enrichment program a secret from the IAEA for 18 years.
The regime had also concealed the existence of a testing facility for centrifuges in the Teheran company Kalaye Electric. In spring of 2003, IAEA inspectors found traces of weapons-capable uranium. Earlier, a group of Iranian exiles had disclosed to Washington that a centrifuge facility was being built in Natan.
And they built a soccer field
In the winter of 2003, the German Foreign Intelligence Service received the laptop of an Iranian nuclear physicist. In addition to plans for the construction of a nuclear warhead, the hard-drive also had instructions in Farsi for the construction of an underground nuclear testing facility and the names of hereto unknown key players in the nuclear program.
Then it was revealed that Iran’s generals had had carrier rockets developed and tested at the military camp Lawisan in the north of Teheran. This had been spearheaded by the aerospace agency AIO, under which Hosseinian also operates.
Before the IAEA inspectors were allowed to come onto the property in spring of 2004, the Iranians tore the buildings down, had the rubble carted away and the soil and plants removed.
And they put a soccer field in its place.
Shipment of steel confiscated
Hosseinian also procured components for the carrier rockets from the Ferrotube & Steel Vertriebs-GmbH distribution company in the Rhineland. Since 2002, the company in Langenfeld received purchasing orders on a regular basis.
Managing Director Norbert S. sent a total of four shipments of aluminum tubes made of special alloys via Hamburg to Iran. The tubes, six meters long, 80 millimeters in diameter, can be used to build rocket tubes.
In 2004, authorities at the Antwerpen port confiscated another shipment of steel headed for the Mullah regime. According to the shipping papers, S. was involved in seven Iranian front companies. They were tipped off by the German Foreign Intelligence Services, who indicated one company in particular to the investigators: Sapico, the Holding from Said Mohammad Hosseinian.
By this time, Said was working in the shadows. He met Hans-Josef H. in Istanbul. Since direct shipments had become too risky, they decided to transfer the goods through Turkey. The deliveries would be sent to a Turkish friend, who would then send them on to Hosseinian’s rocket builder.
Hosseinians name is missing on the UN-list
The plan was a success. By January 2007, 16 tons of first-class graphite in nine separate shipments made it to Iran unnoticed.
H. hid the expensive materials underneath low-grade graphite, which was then declared in the shipping document.
But while the deliveries to Turkey were running smoothly, various companies in Germany, Sweden and Austria got busted working with Hosseinian. A number of organizations, companies and persons of interest were added to the black list at the UN. Two names were missing: Hosseinian and Sapico. But no one knows why.
In March 2007, the same month that the Iranian embargo was tightened even further, Hosseinian struck a deal with H. and his Turkish partner to deliver another ten tons of graphite.
But this time, the Turkish customs seized the materials and shipped it back to its sender. H. and Hosseinian tried again in November 2008 – and again failed to get it through customs.
Arrest in Dusseldorf
Following a lead from Turkey, German investigators now start watching H. In April 2008, the Turkish Defense Ministry contacted an employee of the German embassy in Ankara, informed him of the smuggling network and requested that Germany prohibit a third shipment.
As always, Hosseinian took all the necessary precautions for the June 17, 2008 meeting with H. in Bursa. He took a speedboat to Istanbul, met the German and his Turkish partner in a public café, and after three hours, glanced briefly at his golden Rolex before leaving town. H. on the other hand took his time and spent another night in a spa hotel in Bursa called “Pure GEMUET”.
But after returning home the next day on Flight TK 1579 to Dusseldorf, the customs agents made their move. They searched his home and company and confiscated his files. H. called his partner in Turkey and told him to destroy incriminating evidence “within the next 10 minutes”. His phone was tapped, and H. put under arrest.
Compasses for 32.000 Euro
In Germany, investigators thought they had caught the next big fish: Ali Alaei, Iranian-Canadian citizen, and CEO of an import-export company called Gharn S.A. Canada Inc. The company has offices in Teheran, Montreal and in the third floor on a renovated mill in Giessen.
During a routine inspection, custom agents noticed that Alaei had exported dual use goods to his company in Teheran: In November 2007, compasses valued at 32,000 Euros and in February 2008, sensors made by US manufacturer Honeywell.
Two months later, custom agents confiscated two special compasses made by the Kiel company MBT GmbH. They were part of German company shipments valued at 2.5 million Euros. The addressee was one of Said Mohammad Hosseinian’s front companies – the orders placed by the Mullahs.
The German investigators wire-tapped Alaei’s phones and electronically monitored his emails. The 61 year old spoke on the phone with Hosseinian five times. The two agreed to meet on October 5, 2008, at the Frankfurt airport. The agents knew the flight number and the fake identity Hosseinian was using to enter the country. But he never showed up. The customs agents didn’t know what to do. Finally, they got a call on the radio to make their move and arrested Alaei in the parking garage.
His code name was "Sindbad"
But for the German Foreign Intelligence Services, the arrest was a setback. Ali Alaei, balding, stocky, was their most trusted informant in Iran. His code name was “Sindbad”. They had paid more than a million Euros for his services.
“They just arrested our best source,” August Hanning, interior secretary and former head of the German Foreign Intelligence Services said at a meeting in Berlin. But the attorney general cannot let a smuggler off the hook.
In February 2009, a federal court in Berlin sentenced “Sindbad” in a secret trial to three years in jail for violating foreign trade agreements. The German Foreign Intelligence Services saw to it that he was extradited to Canada.
In Montreal, Alaei is said to have continued working in his import-export company. In May 2009, Hans-Josef H. was sentenced to six years in jail and a 705,000 Euro fine. But German investigators were not appeased: Said Mohammad Hosseinian is now trying to procure parts for the “Ariane” missile.
“Iran is working on liquid propellant rockets,” BND expert Klaus-Martin T. said under oath in H.’s trial.
That would put more pressure on America and Europe to reach an agreement in talks with Teheran.
Otherwise, the diplomats will still be sitting at the negotiating table, while Israel’s government takes action and attacks Iran’s nuclear facilities – with devastating consequences.