Pilatus banker’s defence: U.S. dollar payments were not meant to breach Iran sanctions
06 Mar 2020

A contract signed between Iran and Venezuela in 2006 for the development of a 12,000 housing project in Zulia state was presented at the second hearing of the trial of Pilatus Bank owner Ali Sadr Hasheminejad.

The 39-year-old banker, whose bank in Malta ran bank accounts for members of the Azerbaijani ruling dynasty before its licence was suspended, was arrested back in February 2018 at Dulles airport, Washington D.C. and now faces six federal charges of breaching United States sanctions on Iran, money laundering and bank fraud.

Hasheminejad, son of an Iranian banker who was educated in the US and at one point obtained St Kitts & Nevis citizenship, is accused of having used the American banking system to process US dollar payments from the Venezuela housing project his family built, so that the money could be delivered to the Hasheminejad’s family business accounts in Switzerland and Turkey.

In her opening arguments, prosecutor Stephanie Lake called it a “sophisticated fraud scheme for the enrichment of” Hasheminejad, namely $115 million paid from Venezuela, which passed through the US banking system and Europe in what the US Attorney General insists is a breach of sanctions against Iran.

The other prosecutor, Michael Krouse, argued that Hasheminejad acquired his SKN citizenship to hide his Iranian nationality – MaltaToday had previously reported Hasheminejad’s attempt to apply for asylum in the United States. “With his new passport, he registered companies with an address in Dubai, not in Iran, bought houses, opened bank accounts so that financial institutions would not see the word Iran anywhere, so that alarms for sanctions were not raised against the Persian regime…. Ali Sadr moved through China, Venezuela, Turkey, mobilizing the money to finally go to Iran, to his father’s businesses.”

Facing a jury made up of a 10 women and five men, the prosecution displayed Hasheminejad’s passports from St Kitts and Nevis, four in total. He explained that between 2013 and 2015, Hasheminejad travelled over a 100 times, with multiple trips to Istanbul, Zurich, Dubai, London, Malta and Tehran. On several occasions since 2010, Hasheminejad declared his residence was in Dubai, Belarus, Switzerland and the United States. Federal documents show that Hasheminejad obtained his SKN citizenship in 2009 through the $250,000 investment citizenship program.

Hasheminejad’s defence lawyer Reid Weingarten said his client had no criminal intention. “The construction company sent an invoice to Venezuela. Eventually they would pay into banks in Portugal and Spain. But in the Venezuela account, they used a US bank to settle the transactions. Both had compensation accounts with JP Morgan. That is the story. That is the alleged criminality… But there is no criminal intention. The United States cannot prove that. Ali thought it was fine as long as it wasn’t money to Iran.”

Witness Farshid Kazerani, a project manager at the Hasheminejad family company Stratus Contracting who now lives in Seattle, worked on the Venezuelan housing project, and said he knew the family very well. But he also told the court that former Iranian president Mahmoud Ahmadinejad had at the time “spoke for Hasheminejad’s father’s business requirements” in complaints to Hugo Chavez during visits Venezuela. The Venezuela housing project consisted in building 12,000 apartments for 60,000 inhabitants affected by a flood, together with schools and police stations.

Defence lawyer Weingarten asked Kazerani: “Did I hear you say you were unaware that the government of Iran mistreated the defendant’s father?”, to which the Stratus manager said “yes”.

By Matthew Vella, Malta Today, 5 March 2020

Read more at Malta Today

RiskScreen: Eliminating Financial Crime with Smart Technology

Advance your CPD minutes for this content, by signing up and using the CPD Wallet