Prosecutors said they expect Modanlo, 52, to face significant jail time because of the amount of money involved. Federal guidelines call for an estimated sentence of 10 years.
Modanlo’s attorney, Lucius Outlaw, said he was disappointed by the verdict and would appeal. “Mr. Modanlo has been fighting to clear his name for nearly a decade,” he said. “Unfortunately, the fight will have to continue.”
The case against Modanlo that played out in federal court in Greenbelt last month had all the makings of an international mystery: meetings at a hotel in Moscow, allegations of documents written in code and a $10 million check that made its way from a Swiss bank account to Bowie.
For 10 years, federal investigators pursued the former NASA contractor. Modanlo’s attorneys said the government’s case was built on fears about Iran. The $10 million, they said, was a legitimate loan for a start-up satellite business.
Modanlo was convicted of conspiring to violate the government’s long-standing embargo that prohibits U.S. citizens from directly or indirectly doing business with Iran. Prosecutors said Modanlo tried to get around the embargo by using a front company in Switzerland to conceal the involvement of Iran and funnel money to his bank account.
The international elements of the case presented unusual challenges for the government. There were no witnesses from Russia or Iran who testified to firsthand knowledge of Modanlo’s involvement in the alleged deal; some witness interviews had to be translated; and documents had to be secured from Russia and Switzerland.
From the beginning of deliberations, the foreperson of the jury said in an interview Monday, “there was no doubt in anyone’s mind that these acts were committed. It was a question of what the government had to prove.”
The foreperson, who asked not to be named, said that “there were very heated debates because there was no direct testimony — everything was on paper.”
To make its case, the government relied on a paper trail that included documents that prosecutors said contained Modanlo’s handwritten notes. In the briefcase of one of Modanlo’s business associates, investigators found a folder marked “Nader” with correspondence between Russia and Iran about a planned satellite launch.
Other documents from Modanlo’s company, prosecutors said, referred to Iran using code words such as “foreign customer” or “beneficiary.”
“The documents put Modanlo in the middle of brokering a deal,” Assistant U.S. Attorney David Salem said during closing arguments in a trial that lasted more than five weeks. “Everything he does is designed to conceal and hide.”
Modanlo’s defense team said that the money was a legitimate loan from international businessmen and that the governments of Russia and Iran did not need a middleman to make a deal.
“Why would Iran pay Nader Modanlo $10 million when they could have gone directly to Russia?” Outlaw asked jurors.
Modanlo was accused of arranging meetings between Iranian government officials and representatives of the Russian aerospace company Polyot. But one witness who attended a meeting with Modanlo testified that she was not certain which country the Middle Eastern-looking participants were from or what language they were speaking.
“The government is counting on your fear clouding your judgment,” Outlaw said. “These are separate events that are not connected by anything other than speculation.”
Years before the federal investigation, Modanlo was an up-and-coming entrepreneur in the commercial satellite business. Born in Iran, he came to the United States to study engineering and science at George Washington University from 1979 to 1987. He worked for NASA subcontractors during the Cold War, according to a Washington Post profile, before starting his own company in 1992 and settling in Potomac.
Modanlo and his now estranged business partner at Final Analysis Inc. had hoped to establish a constellation of satellites to provide data and other telecommunication services to customers. But prosecutors said Modanlo arranged the deal between Iran and Russia when those “big dreams failed.” Modanlo, they said, needed money when his business went bankrupt in 2001 and he became mired in lawsuits.
“He hoped that by making everything so complicated that no one would be able to discover, figure or prove why he got $10 million. He was wrong,” Assistant U.S. Attorney Stuart Berman said in closing arguments. “It took a long time. But he got caught.”
Modanlo is to be sentenced before U.S. District Judge Peter J. Messitte on Sept. 11.