Last month it emerged that ZTE was subject to a Department of Commerce inquiry over selling embargoed American equipment to Iran, and it looks like the situation has further escalated. According to a document obtained by The Smoking Gun, the FBI is now investigating and has found evidence that the Chinese company made plans to obstruct the Department of Commerce inquiry. The information comes from Ashley Kyle Yablon, a ZTE attorney-turned-whistleblower who informed the FBI of the planned coverup. Yablon suspected ZTE of setting up a shell company in China to buy US-made goods under the trade embargo, and then another to organize the goods' delivery to Iran.

Once ZTE received the Department of Commerce's subpoena, the company apparently considered altering the packing list or shredding documents related to the sale. The equipment sold by ZTE included products from Microsoft, Dell, HP, Oracle, and other US companies, and went to the Telecommunication Co. of Iran (TCI) which is part-owned by the Iranian government. Reuters reported back in March that the country-wide system would be "far more capable of monitoring citizens" than any other equipment hitherto sold to Iran.