Project based in Venezuela allegedly involved payments of around $115 million
Ali Sadr Hasheminejad, chairman of Pilatus Bank which is based in Malta was arrested by the US authorities on Tuesday regarding the evasion of sanctions amounting to the tune of $115 million. The bank which has been at the storm of controversy here in Malta with allegations involving the local political class is now once again under severe scrutiny.
An indictment was unsealed today charging Ali Sadr Hashemi Nejad (Sadr) for his alleged involvement in a scheme to evade U.S. economic sanctions against Iran, to defraud the U.S., and to commit money laundering and bank fraud. Sadr was charged with participating in a scheme in which more than $115 million in payments for a Venezuelan housing complex were illegally funnelled through the U.S. financial system for the benefit of Iranian individuals and entities.
Sadr was arrested on Tuesday on a six-count Indictment (the Indictment) and presented this afternoon in U.S. District Court for the Eastern District of Virginia. Sadr’s case has been assigned to U.S. District Judge Andrew L. Carter Jr. in the Southern District of New York.
Background to the case
In August 2004, the Governments of Iran and Venezuela entered into an agreement (the Agreement), whereby they agreed to cooperate in certain areas of common interest. The following year, both governments supplemented the Agreement by entering into a Memorandum of Understanding regarding an infrastructure project in Venezuela (the Project), which was to involve the construction of thousands of housing units in Venezuela.
The Project was led by Stratus Group, an Iranian conglomerate controlled by Sadr and his family with international business operations in the construction, banking, and oil industries. In December 2006, Stratus Group incorporated a company in Tehran, which was then known as the Iranian International Housing Corporation (IIHC). IIHC was responsible for construction for the Project. Thereafter, IIHC entered into a contract with a subsidiary of a Venezuelan state-owned energy company (the VE Company), which called for IIHC to build approximately 7,000 housing units in Venezuela in exchange for approximately $475,734,000. Stratus Group created the Venezuela Project Executive Committee to oversee the execution of the Project. Sadr was a member of the committee and was responsible for managing the Project’s finances.
In connection with his role on the Project, Sadr took steps to evade U.S. economic sanctions and to defraud U.S. banks by concealing the role of Iran and Iranian parties in U.S. dollar payments sent through the U.S. banking system. For example, in 2010, Sadr and a co-conspirator used St. Kitts and Nevis passports and a United Arab Emirates address to incorporate two entities outside Iran that would receive U.S. dollar payments related to the Project on behalf of IIHC. The first entity, Clarity Trade and Finance (Clarity), was incorporated in Switzerland, and the second, Stratus International Contracting, J.S., aka Stratus Turkey, aka Straturk, was incorporated in Turkey. Stratus Turkey and Clarity were both owned and controlled by Sadr and his family members in Iran. Sadr then opened U.S. dollar bank accounts for Clarity and Stratus Turkey at a financial institution located in Switzerland.
Thereafter, Sadr and others conducted a series of international financial transactions using Clarity and Stratus Turkey for the benefit of Iranian parties in a manner that concealed the Iranian nexus to the payments, in violation of U.S. economic sanctions. Specifically, between April 2011 and November 2013, the VE Company, at the direction of Sadr and others, made approximately 15 payments to IIHC through Stratus Turkey or Clarity, totaling approximately $115,000,000.
Sadr and others directed that payments be routed through banks in the U.S. to Stratus Turkey’s or Clarity’s bank accounts at the financial institution in Switzerland. The majority of the funds were then transferred to another offshore entity located in the British Virgin Islands, which had been incorporated by Sadr and others in 2009. In addition, on Feb. 1, 2012, Clarity wired more than $2,000,000 of proceeds from the Project directly into the United States. Those proceeds were then used to purchase real property in California.
Maltawinds had reported extensively on the fact that Pilatus Bank should not have been given a license in Malta since Iran was under sanctions at the time. So far the MFSA has not made any comment on the matter.
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Original article found on Malta Winds