Undercover Video Gives Insight Into Controversial 'Prisoner Swap' With Iran

"You want to be careful ... we will be in the same cell," one man warned.

August 12, 2016, 3:06 PM

— -- "You want to be careful ... we will be in the same cell" if caught.

That is the warning – captured on secret recordings obtained exclusively by ABC News – that 45-year-old Arash Ghahreman gave to the U.S. businessman who he believed was going to provide him with sensitive military technology so it could be smuggled into Iran.

In fact, Ghahreman was arrested days later for the export scheme and ultimately sentenced to 6.5 years in prison. But five months after being sentenced, the naturalized U.S. citizen was released as part of the so-called "prisoner swap" with Iran, and he chose to stay in the United States.

Five other Iranian-American inmates and an Iranian national were also freed. And U.S. prosecutors dropped charges against 14 fugitives living overseas – including one of Gharehman's alleged accomplices.

President Obama called it "a reciprocal humanitarian gesture," after the nuclear deal with Iran and the release of "several Americans unjustly detained by Iran," including Washington Post reporter Jason Rezaian and former Marine Corps sergeant Amir Hekmati.

Now amid questions over the timing of Iran's release of those four Americans and a $400 million payment to Iran, Ghahreman's case showcases one of the individuals who was released from U.S. custody as part of the deal. The undercover videos and secret audio recordings obtained by ABC News detail how Ghahreman and his associates hoped their scheme would work, and how far his group would go to acquire the equipment -- and tens of thousands of dollars.

"These individuals were not charged with terrorism or any violent offenses," and their release "reflects our willingness to engage with Iran to advance our mutual interests, even as we ensure the national security of the United States," Obama said when announcing the deal on Jan. 17.

But after a federal jury in April 2015 convicted Ghahreman of violating U.S. export and money laundering laws, the head of the Justice Department's National Security Division, John Carlin, said Ghahreman's actions had "the potential to harm U.S. national security objectives."

Specifically, Ghahreman acted as an agent and "primary negotiator" for a Dubai-based front company that illegally shipped goods and technology from the United States to Iran, according to the Justice Department.

In January 2013, the founder of the company, who lived in Iran, asked Ghahreman to obtain U.S.-manufactured military components for a customer in Iran. Ghahreman then found two U.S. suppliers who would sell him four Navigat-2100 fiber optic gyrocompasses – used by "advanced high speed vessels" – and dozens of Y-690 electron tubes - used in "military airborne radar and transponder applications," U.S. authorities said.

In secretly recorded conversations, Ghahreman said some of the items would be used by the Iranian government, likely at commercial airports. One of the suppliers, however, noted that some of the items are "sensitive" military products used for "electronic warfare."

In June 2015, Ghahreman and his Dubai-based partner, Ergun Yildiz, met with the suppliers in a Las Vegas hotel room. Yildiz called it "a good chance ... for far bigger business in future" because "it's very important to find reliable, trustable partners."

The "suppliers," however, were undercover agents with Homeland Security Investigations. Ghahreman, Yildiz and their alleged ringleader in Iran were all charged with several crimes, including engaging in a money-laundering scheme and conspiring to illegally export "marine navigation equipment and military electronic equipment" from the United States to Iran.

At the end of a seven-day trial, Ghahreman's defense attorney called the charges against his client "a case about a man in the middle" with "no allegiance to Iran."

"Arash Ghahreman really didn't know whether these items were going to Iran, and he certainly didn't have intent that they end up in Iran or with the government of Iran," attorney Ellis "Trip" Johnston told the jury.

What's more, the undercover investigation featured federal agents "bent on securing a prosecution" and "pushing Mr. Ghahreman to go forward in this deal," according to Johnston's closing argument at trial.

But Ghahreman's own words in the secret recordings and other communications "overwhelmingly establish" that he was "a knowing and critical member" of "a criminal network that ... reached from Iran to Dubai all the way to the United States," federal prosecutor Shane Harrigan told jurors.

The jury convicted Ghahreman on seven counts, most focused on transactions involving the Y-690 electron tubes.

Yildiz – a German citizen – testified against Ghahreman, after pleading guilty to an export-related charge. He was sentenced to 23 months in prison and was released before the "prisoner swap" deal was announced.

As part of the deal, the U.S. government not only commuted Ghahreman's sentence but also dropped charges against the founder of the front company. Prosecutors said in court documents the move was "in the interest of justice ... as well as significant foreign policy interests."

In a document filed with the federal judge ahead of Ghahreman's sentencing last year, Johnston said any suggestion "that the items involved in this offense would seriously harm the United States' national security" is "nothing more than speculation."

Ghahreman "did not engage in these transaction with any sort of nefarious purpose or belief that they would be used for anything more than some commercial purpose," Johnston said.

Nevertheless, sources told ABC News, Justice Department officials raised concerns about some proposals being discussed ahead of the final "prisoner swap" deal. It's unclear exactly what those concerns were.

Soon after the deal was announced, however, an Iranian Foreign Ministry spokesman said his government had "tried to include most" of the Iranians in U.S. jails and prisons as part of the deal, "but we could [only] strike an agreement" over certain cases.

Attorney General Loretta Lynch later told CNN it was her department's "responsibility to raise every issue and debate every point" as "part of that process."

An extensive review by ABC News found that when it comes to Iran specifically, at least 130 people and another 33 companies have been charged under the Obama administration for trying to smuggle sensitive materials into the rogue state or conduct illegal business with people in Iran.

The undercover videos and recordings from Ghahreman's case - spanning several months of investigation in 2013 - were provided to ABC News by federal prosecutors.

While Ghahreman's sentence was commuted, he was not pardoned, so his conviction still stands.

Johnston, the lawyer who represented Ghahreman, told ABC News his former client is now "just focused on trying to put his life back together," and he "isn't very comfortable or interested in talking to the media."

Efforts to reach Ghahreman directly were not successful. It's unclear if he still lives in New York.

Efforts to reach Yildiz and an attorney who represented him were also not successful.

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