Nutrition Company & Co-Owner to Pay Civil Penalties for EAR Evasion & Lying to BIS Enforcement
Muscle Gauge Nutrition will pay $45,000 in civil penalties, and its co-owner $22,000, to settle charges by the Bureau of Industry and Security that it violated the Export Administration Regulations by attempting to export to Iran without the required authorization. If the company or its co-owner fails to pay any of the three installments on time, additional penalties will be added, interest will accrue, and their export privileges will be denied for one year.
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According to the settlement agreements, MGN sent its freight forwarder’s routing agent a sales invoice for whey protein supplements that listed the “ship to” party as a transportation logistics company in the United Arab Emirates, but the “bill to” party as a company in Iran. When the routing agent asked for the relevant Office of Foreign Asset Control license for the transaction, MGN replied that it had made a “typo” and that the correct billing party was the UAE transportation logistics company. Shortly afterward, MGN’s operations manager contacted the UAE company and was advised that the Iranian address was incorrect and that he should use the UAE company’s address instead. The shipment was later detained and seized by the U.S. government.
During the ensuing investigation, BIS conducted an interview with Robert Reed, co-owner of the company. Reed claimed he thought the items were destined for the UAE. But his statement was false, BIS alleged, because he was notified by a sales manager before the transaction took place that the end user was in Iran.
MGN was charged with a violation of 15 CFR 764.2(h) (Evasion) for undertaking actions to avoid detection by enforcement authorizes. Reed was charged with a violation of 15 CFR 764.2(g) (False Statement to BIS in the Course of an Investigation) for his claims to enforcement officers.
The settlement agreement for MGN is available here. The settlement agreement for Reed is available here.