Canadian guilty of defying Cuba embargo

Convicted in U.S. court: Many charges were for activities while living in Canada

Tim Shaffer, National Post

James Sabzali was found guilty of 20 counts of violating the 1919 U.S. Trading With the Enemy Act. He faces a possible 205 years in prison.

PHILADELPHIA - A Canadian businessman could be facing life in prison after an U.S. jury convicted him yesterday of violating the U.S. trade embargo against Cuba.

James Sabzali, 42, the only foreign national prosecuted for breaking the 40-year Cuban embargo, was found guilty by a federal jury on 20 counts of violating the 1919 U.S. Trading With the Enemy Act and one count of conspiracy.

Three of his fellow executives, all U.S. citizens, were also convicted, along with their Pennsylvania-based chemical company Bro-Tech Corp.

"I'm simply shocked and confused," a shaken Mr. Sabzali said after the jury of seven women and five men delivered their verdict, ending four days of deliberations.

The unprecedented case, widely regarded as a challenge to Canadian sovereignty, involved the sale of US$2.1-million worth of water purification chemicals to Cuba.

Federal prosecutors spent five years building a case against Mr. Sabzali, a former Hamilton, Ont., resident now living in suburban Philadelphia, and the firm for which he was a salesman.

Mr. Sabzali, another Bro-Tech executive and the corporation itself were charged with 76 counts of violating the Trading With the Enemy Act and one count of conspiracy. Another corporate officer was charged solely with conspiracy.

The verdict is likely to widen a dispute between the United States and Canada over trade relations with Communist-ruled Cuba.

Almost half of the charges relate to Mr. Sabzali's activities while he was living in Canada. He resided in Hamilton from 1992 to 1996, frequently visiting Cuba, before joining the company's Philadelphia-area head office in 1996.

At least seven of the trade violations of which Mr. Sabzali was convicted occurred while he was still living in Canada.

Cuba is Canada's largest trading partner in the Caribbean, with trade between the two countries exceeding US$435-million a year and Canadians are specifically prohibited by Canadian law from complying with the U.S. embargo.

U.S. District Judge Mary McLaughlin scheduled a sentencing hearing for June 28.

Mr. Sabzali faces a maximum sentence of 205 years in prison and over US$5-million in fines.

However, before the trial began on March 15, prosecutors had already recommended prison sentences of 41 months to 51 months.

"There's nothing willy-nilly about this verdict. It's clear the jury looked at the evidence and analyzed the evidence per individual, per count," said Assistant U.S. Attorney Joe Poluka.

Mr. Poluka insisted the case had nothing to do with Canada's position on the Cuban embargo.

"This case was never about commerce between Canada and Cuba," said Mr. Poluka, "It's about commerce between the United States with Cuba. We know Canada trades with Cuba. We don't have a beef with that."

The Canadian government had been following the trial closely after lodging protests with the U.S. State Department, but there was no immediate comment last night from the Department of Foreign Affairs.

Mr. Sabzali made more than 20 trips from Canada to Cuba while working on a contract for Purolite, a U.S. chemical company.

He was selling a chemical resin for use in water purification, and ultimately sold more than US$2-million worth of the product to Cuban hospitals and factories, all the time billing the U.S. company for his fees.

He criss-crossed the country, driving to various industrial sites and chatting with everyone from doctors to sugar farmers in his efforts to peddle his product. When the sales were made, the chemicals were shipped to Cuba through Canada, Italy, Spain and Mexico -- all countries that do not honour the U.S. embargo.

Mr. Sabzali's Cuban business trips came under scrutiny in a five-year investigation by the U.S. Justice Department.

His lawyer, Catherine Recker, has described the charges as outrageous.

"He's a Canadian citizen living in Canada, transacting business from Canada in accordance with Canadian law," she said before the trial began.

The Foreign Extraterritorial Measures Act, passed in 1992, forbids Canadian companies from honouring the U.S. embargo.

However, Mr. Sabzali's appeals to his own government drew only limited response. Foreign Affairs officials were quick to point out half the charges in the 76-count indictment arose from business transactions carried out after 1996, when Mr. Sabzali moved to Philadelphia and should have honoured the U.S. embargo.

Mr. Sabzali, who directed the company's Canadian office until 1996, never tried to hide his trips to Cuba, his lawyer said.

Mr. Sabzali, who has two children, was forced to surrender his passport and house deed to the U.S. government during the trial and was restricted from travelling more than an hour's drive from his home.