Company pleads guilty in Iran deal

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CORRECTION

A story in the City & State section Wednesday incorrectly stated that Allied Telesis Labs no longer has an office on N.C. State's Centennial campus. The company came to Centennial in 2001 and now has about 100 workers in 20,000 square feet there.

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Allied Telesis Labs Inc., which once had an office on N.C. State's Centennial Campus, pleaded guilty Tuesday to conspiracy in a case in which employees tried to sell millions of dollars of telecommunications equipment to a company in Iran, in violation of the United States' economic embargo.

Allied Telesis Labs was preparing to sell the equipment despite the prohibitions, a federal prosecutor said during a brief hearing in a federal courtroom Tuesday. NCSU wasn't associated with Allied Telesis Labs, lawyers said.

The equipment was to be used to "rework the telecommunications network" in 20 Iranian cities, including its capital, Tehran, Assistant U.S. Attorney John Bowler said in a court hearing Tuesday in Raleigh.

"Some of the e-mails show that they knew this was in violation of export laws," Bowler said.

A confidential informant helped break the case open, Bowler said in court.

Court documents show that employees at Allied Telesis Labs and related companies plotted with an Iranian company to export the equipment and designs. Telecommunications equipment worth about $2 million had been manufactured in Singapore to carry out the contract.

But the $95 million contract between the company and the Iranian business, Iranian Information Technology Co., fell through. Bowler did not say why the deal collapsed.

Attorneys for Allied Telesis Labs didn't comment during the hearing but said in a news release that the employees involved in the conspiracy had been fired.

Allied Telesis Labs is a research facility of Allied Telesis, which was founded in 1987 and based in Bothell, Wash. The company makes networking gear that, for instance, routes voice and data traffic. In 2007, that portion of its operations had $200 million in sales in a global market worth $18 billion, according to estimates by the Dell'Oro Group, a California company that tracks the industry. Allied Telesis is owned by Allied Telesis Kabushis Kaisha, a global holding company in Japan.

The company had established the Raleigh office this decade to develop advanced technologies. The spokesman for Centennial Campus said Tuesday that he could not immediately say when the company moved.

Allied faces a punishment of five years of probation and a $500,000 fine, according to the agreement. No sentencing date has been scheduled.

(Staff writer Jonathan Cox contributed to this report.)