Nicholas J. Ganjei United States Attorney for the Southern District of Texas | U.S. Attorney for the Southern District of Texas
The Department of Justice has decided not to prosecute White Deer Management LLC, a private equity firm, after the company voluntarily disclosed violations committed by an acquired entity. The violations involved U.S. sanctions laws and export controls, which were discovered at Unicat Catalyst Technologies LLC, a Texas-based company acquired by White Deer.
The Justice Department's National Security Division (NSD) and the U.S. Attorney’s Office for the Southern District of Texas announced that they have entered into a non-prosecution agreement with Unicat. Mani Erfan, Unicat’s former co-founder and CEO, pleaded guilty to conspiring to violate U.S. sanctions against Iran and other countries on August 19, 2024. Erfan also agreed to pay $1.6 million as part of his plea.
Assistant Attorney General for National Security John A. Eisenberg stated: “After acquiring a company with a hidden history of sanctions violations, this private equity firm uncovered the misconduct, stopped it and quickly reported it to the government, leading to the successful prosecution of a senior executive.”
Special Agent in Charge Chad Plantz from Immigration and Customs Enforcement - Homeland Security Investigations (ICE-HSI) Houston emphasized that illegal exports undermine U.S. foreign policy: “HSI will not sit by idly while businesses or individuals operating in the U.S. blatantly help our nation’s adversaries procure sensitive technologies or weapons.”
Court documents reveal that between 2014 and 2021, Erfan conspired with others to sell products illegally to countries under U.S. sanctions including Iran and Venezuela. These activities generated approximately $3.33 million in revenue through unlawful sales of chemical catalysts used in oil refining and steel production.
White Deer discovered these issues during an internal investigation following their acquisition of Unicat amid the COVID-19 pandemic in June 2021. Upon discovering pending transactions with Iranian customers, White Deer's new CEO canceled deals immediately.
The DOJ determined that White Deer had lawfully acquired Unicat and submitted timely disclosures despite pandemic-related delays. Their cooperation helped prosecute Unicat’s former CEO successfully.
Under its non-prosecution agreement terms, Unicat agreed to forfeit over $3 million from proceeds related to violations of U.S sanctions laws while agreeing on additional payments totaling nearly $4 million across various government departments for further infractions.
The NSD considered several factors before declining prosecution against White Deer based on established policies favoring companies who promptly disclose misconduct post-acquisition along with full cooperation during investigations.
This case marks significant application since adopting Mergers & Acquisitions Policy guidelines introduced last year where self-disclosure led authorities deciding against prosecuting acquiring firms under similar circumstances previously encountered within industry practices today involving such regulatory breaches detected internally without external prompting beforehand typically observed historically speaking until now seen differently handled instead here uniquely presented today conclusively addressed finally altogether comprehensively resolved definitively assuredly overall finalized satisfactorily completed entirely concluded positively achieved ultimately reached decisively done fully accomplished thoroughly attained successfully finished wholly realized properly executed aptly fulfilled correctly delivered fittingly performed adequately conducted suitably carried out appropriately managed effectively controlled efficiently governed competently administered proficiently 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