Delfin, which is based in North Charleston, S.C., said that one of its shipments unintentionally ended up in Iran, although it denies violating the embargo to the extent that the government alleges.

One of our customers that we have been shipping product to on at least one occasion re-shipped the product to Iran, Vice President of Operations John Gordon said during a telephone interview Friday. We knew nothing about it, but we feel terrible. Were patriots.

Delfin Group USA is part of Moscow-based Delfin Group Russia, which bought the North Charleston site from Chevron in 2007. The U.S. subsidiary manufactures its own line of automotive and industrial lubricants and also toll blends and packages lubes for other companies. According to Gordon, it was exporting about half its volume to various regions.

In its complaint, the Bureau of Industry and Security claims that beginning in mid-2010, Delfin and its chief executive officer, Marcos Bagdhasarian entered a conspiracy with Naren Sachanandani and his company, Do-It FZC, along with other companies, to skirt the U.S. trade embargo with Iran. According to the allegations, Delfin shipped polymers and lubricating oils or lubricating additives, including air plane engine oils, to Do-It in Sharjah, U.A.E. There, the government claims, the shipments were repackaged and re-labeled for transshipment to Iran.

Gordon acknowledged that Delfin regularly shipped products to the U.A.E., but denied that the company ever intended or knew that any of those products were bound for Iran.

All we knew is that they were going to the U.A.E., he said. The best that we can determine is that there was one shipment which contained drums of additives and which we shipped to Abu Dhabi (U.A.E.). Since we were contacted by the government we learned that this shipment was reshipped to Iran. Thats the only one we know of.

Gordon said he did not know the identity of the company that received the shipment in Abu Dhabi. Sachanandani acknowledged having done business with Delfin but denied forwarding products to Iran. Moreover, he claimed to have been unaware of the allegations until contacted by Lube Report and provided a copy of the stop export order on Monday.

I am shocked to see this, he said. I am a small trader dealing in industrial raw materials and the lube additives supplied to local companies and to companies in GCC countries. The Gulf Cooperation Council is an association of countries on the Arabian Peninsula.

Gordon said agents from several U.S. government agencies raided Delfins offices recently to search for records. After the case was reported in local press, the company temporarily had difficulty obtaining base oils and additives from some of its suppliers.

This was a real setback for us, he said. Weve worked hard to let people see that we are an American company doing things the right way, and then something like this happens. He added that Delfin is cooperating fully and expects the case to be resolved in the coming months.

We suspect that we are looking at a substantial fine for all of this. I would be very surprised if the federal government expended this amount of time and energy and then not impose some kind of penalty.