The U.S. State Department said on Friday it was taking action to dismantle what it described as a sophisticated network that used deception and intermediary companies to obtain advanced equipment for Iran’s defense sector in violation of American sanctions.

According to State Department spokesperson Tommy Pigott, the network allegedly defrauded dozens of U.S. technology firms and secured millions of dollars’ worth of equipment, including spectrum analyzers and security detection devices with potential military applications.

U.S. officials said the operation relied on fraudulent websites designed to resemble legitimate American companies. The network allegedly used intermediaries in Dubai to receive shipments before transferring the equipment to Iran, circumventing existing sanctions restrictions.

The State Department identified Ali Majd Sepehr as the individual leading the network. Officials did not disclose the names of the affected American companies or provide details on the quantity of technology allegedly transferred.

The sanctions announcement comes as Washington increases efforts to disrupt financial and logistical channels linked to Iran’s military establishment. On Thursday, the State Department offered a reward of up to $15 million for information leading to the disruption of financial mechanisms associated with the Islamic Revolutionary Guard Corps and its affiliated branches.

The move also coincides with high-stakes diplomatic discussions between Washington and Tehran aimed at ending the conflict that began earlier this year. The White House said on Friday that President Donald Trump would approve an agreement only if it fully satisfies U.S. requirements, underscoring uncertainty surrounding the negotiations.

The latest sanctions signal that the United States intends to maintain economic and legal pressure on Iran’s defense procurement networks even as diplomatic efforts continue.

The move, announced by Defense Ministry Director General Amir Baram, will redirect procurement spending toward domestic suppliers and allied countries, according to an Israeli defense spokeswoman.

Policy rift deepensIsrael said the decision was in response to several French actions, including recognition of a Palestinian state, exclusion of Israeli firms from defense exhibitions, and a ban on Israeli aircraft carrying munitions for operations against Iran from transiting French airspace.

“The French ban was imposed despite prior coordination,” the spokeswoman said, adding that Israel viewed the measures as harmful to bilateral defense cooperation.

France’s presidency said its position was consistent with its policy since the start of the conflict, after U.S. President Donald Trump criticized Paris for not allowing Israel-bound military flights to cross its airspace.

According to a French parliamentary report, Israel’s procurement from French defense firms totaled about $260 million between 2015 and 2024, primarily involving components rather than complete weapons systems.

France does not directly export arms to Israel but supplies parts used in broader defense production chains.

The decision signals a further deterioration in defense ties between the two countries as the regional conflict intensifies following a military campaign launched by the United States and Israel against Iran on Feb. 28.

Israel’s defense ministry said it viewed the developments “with great severity,” warning of potential long-term impacts on strategic cooperation.