In June 2025, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced that Unicat Catalyst Technologies, LLC (Unicat), a Texas-based petrochemical company, had agreed to settle its potential civil liability relating to U.S. sanctions on Iran and Venezuela. OFAC is the primary U.S. government agency that administers and enforces U.S. sanctions.
Notably, this followed from a December 2024 announcement by the National Security Division (NSD) of the U.S. Department of Justice (DOJ) that the government was declining to prosecute private equity firm White Deer Management, LLC (White Deer), the owner of Unicat. The declination was the result of White Deer’s voluntary self-disclosure of sanctions and export control violations committed by Unicat prior to White Deer’s acquisition of the company.
Background and Violations
White Deer acquired Unicat in September 2020. According to the DOJ, between 2014 and 2021, Unicat’s then CEO conspired with several individuals, including a Unicat employee, to illegally sell chemical catalysts to prohibited customers in Cuba, Iran, Syria, and Venezuela. Unicat primarily sourced catalysts from China through a co-founder acting as its buying agent and operated a global sales network headquartered partly in Texas.
In total, there were 23 illegal transactions involving Unicat employees, partners, and agents, generating approximately $3.33 million in revenue. Some of the exports originated from the United States and thus violated U.S. export controls.
To conceal the illegal conduct, the conspirators falsified export documents, routed payments through bank accounts in foreign jurisdictions, and submitted false business records. They also misled employees and the U.S. government by using invoices to lower import tariffs on Chinese catalysts, allowing Unicat to evade approximately $1.66 million in tariffs. Additionally, during acquisition discussions with White Deer, Unicat personnel falsely certified to compliance with U.S. sanctions and export controls.
Investigation and Disclosure Led to Penalty for Unicat, Declination for White Deer
After White Deer completed the acquisition of Unicat, a new CEO identified an active transaction with a customer in Iran and promptly terminated the deal. White Deer subsequently engaged outside legal counsel and initiated an internal investigation, discovering multiple transactions violating U.S. sanctions.
White Deer voluntarily disclosed the matter to the NSD, and both White Deer and Unicat fully cooperated with the government, providing evidence and responding quickly to government inquiries. In addition, Unicat terminated the responsible employees and created a comprehensive compliance program to prevent similar violations in the future, while White Deer sought compensation from Unicat’s prior owners.
This cooperation contributed to the prosecution of Unicat’s former CEO, who pleaded guilty in August 2024 to conspiracy to violate U.S. sanctions, concealment, and international money laundering, and agreed to pay a $1.6 million monetary judgment.
Separately, in December 2024, Unicat agreed to forfeit $3.3 million under the terms of a non-prosecution agreement with DOJ. This was in addition to the nearly $4 million civil penalty paid related to the sanctions violations, and over $390,000 paid for export control violations.
White Deer Met NSD Disclosure Requirements
In choosing not to impose a penalty on White Deer, NSD determined that the firm’s voluntary self-disclosure met the criteria of the Mergers and Acquisitions policy that forms part of NSD’s Enforcement Policy for Business Organizations (Enforcement Policy). Established in March 2024, the Enforcement Policy outlines when NSD may decline to prosecute an acquiring party that discloses misconduct that occurred prior to an acquisition.
In Unicat’s case, NSD reached this conclusion due to the following:
- The lawful and bona fide nature of acquisition.
- No pre-existing obligation to disclose Unicat’s misconduct.
- Timeliness of disclosure, considering COVID-19 related-delays and a phased investment strategy.
- Immediate remedial action following discovery.
- Full and proactive cooperation.
Though Unicat was associated with several aggravating factors, NSD declined prosecution on the grounds that such conditions were no longer present at either Unicat or White Deer at the time of disclosure.
NSD Emphasizes the Value of Disclosure
As Assistant Attorney General for National Security John A. Eisenberg stated, DOJ’s approach in this matter “reflects the NSD’s strong commitment to rewarding responsible corporate leadership.” Likewise, the Enforcement Policy provides that
When an acquiring company makes a voluntary self-disclosure to NSD that qualifies for the additional protections of the M&A Policy, NSD generally will not seek a guilty plea from the acquiror, and there is a presumption that NSD will decline to prosecute the acquiror.
Disclosure is not always appropriate, and it is almost never required in the context of sanctions or exports. But this matter shows why it is always an important consideration when deciding how to respond to a violation.
The author would like to thank summer associate Annie Jacobs for her valuable assistance with this article.
