Multinational Iranians Under Sanctions Scrutiny; The Case of Ali Sadr Hashemi Nejad

On March 19, 2018, Ali Sadr Hashemi Nejad was arrested at Dulles Airport in Washington. The federal court in Manhattan, known for prosecuting significant terrorism-related cases, has accused Mr. Sadr Hashemi Nejad of money laundering, evading sanctions, and bank fraud. He is alleged to have sent $115 million from the U.S. financial system to Iran during a housing project in Venezuela, thereby violating U.S. sanctions against Iran. Ali Sadr Hashemi Nejad is the son of Mohammad Sadr Hashemi Nejad, the founder of Bank Eqtesad Novin, Iran's first private bank, and the owner of Stratus Holding, one of Iran's largest construction holdings. Journalists in Malta have asked Ali Sadr Hashemi Nejad about the allegations of money laundering related to Pilatus Bank (reported in April 2017): Ali Sadr Hashemi Nejad holds a U.S. residency card. He and his family own at least two homes in Maryland and Washington, and land in the luxury area of Malibu, California. Additionally, Mr. Sadr Hashemi Nejad has registered several companies worldwide, including in Malta, Switzerland, Hong Kong, Cyprus, the UK, and the United States, or held managerial positions in them. However, none of the company registration documents mention his Iranian nationality. In at least ten instances of company registration outside Iran, he is introduced as a citizen of Saint Kitts and Nevis, a citizenship that can be purchased with an investment of between $150,000 to $400,000 in these islands. Some of these companies are linked to the controversial Pilatus Bank. Pilatus Bank and the suspicious death of Maltese journalist Daphne Caruana Galizia: Pilatus Bank was established in late 2013 in Malta. It came under scrutiny when journalist Daphne Caruana Galizia accused the bank of money laundering in her blog. The bank has also been implicated in secret investments involving the family of Ilham Aliyev, the President of Azerbaijan. Daphne Caruana Galizia was killed in October 2017 by a bomb explosion in her car. Until recently, Ali Sadr Hashemi Nejad was the owner and chairman of Pilatus Bank. He and Pilatus Bank filed a lawsuit in the U.S. against Daphne Caruana Galizia in May 2017 over allegations she made against the bank. Following her death in October 2017, the lawsuit filed by Mohammad Sadr Hashemi Nejad against her was also closed. Manuel Delia, a blogger and press secretary for former Maltese Prime Minister Eddie Fenech Adami, stated that Pilatus Bank was 'a major problem': 'Pilatus Bank was more like a boutique. It was one of those banks that people like us do not enter. We suspect that this bank was more of a money laundering machine.' Ali Sadr Hashemi Nejad is identified in the company registration documents related to Pilatus Bank and his other companies abroad as a citizen of Saint Kitts and Nevis, with his residence declared as the United States, the UAE, and the UK. This issue is not unique to Ali Sadr Hashemi Nejad. In addition to him, all Iranians within Ali Sadr Hashemi Nejad's international business circle follow the same pattern and leave no trace of their Iranian identity. According to the company registration documents related to Mr. Sadr Hashemi Nejad, Iranians associated with these companies are introduced as follows: Negarin Sadr Hashemi Nejad - Ali Sadr Hashemi Nejad's sister - citizen of Saint Kitts and the U.S. and resident in the UAE and the U.S.; Hamid Reza Ghanbari, citizen of the Dominican Republic and resident in the UAE and Malta; Azadeh Niri, citizen of the UK and resident in Switzerland; and finally Mehdi Shams - a person currently imprisoned in Iran in connection with Babak Zanjani's case - citizen of the UK and resident in the UK. In other words, according to the company registration documents outside Iran, nothing about these individuals is Iranian except for their names. Liza Beren, a senior researcher at the Mintz Group in the U.S., a company active in risk assessment and providing research services to investors, states: 'We have noticed that the acquisition of citizenship from other countries by wealthy individuals, especially from heavily sanctioned countries like Iran, Russia, and Syria, is on the rise. These individuals acquire citizenship from areas where their citizens face fewer restrictions, such as Saint Kitts and Nevis, the Comoros Islands, Antigua [an island in the Caribbean], and elsewhere. This citizenship allows individuals to keep their original nationality shrouded in ambiguity.' In June 2018, Reuters also reported on the purchase of Comoros passports by Iranians, suggesting that this action might be aimed at circumventing sanctions. Liza Beren mentions that some individuals obtain these passports to avoid political consequences, but for others, 'this is specifically done to evade sanctions.' She emphasizes that among holders of passports from sanctioned countries, the effort to obtain a passport from another country is clearly observable, adding: 'Regarding Iranians engaged in international business outside of Iran, we always pay attention to their residency and citizenship status in other countries.' Regarding Ali Sadr Hashemi Nejad, the Manhattan court does not care where this holder of a U.S. residency card, citizen of Iran and Saint Kitts, and resident of the UAE, the United States, and the UK is specifically from or where he resides. What the court seeks is to prove his involvement in money laundering and evading sanctions for the benefit of the Islamic Republic, an accusation that Mr. Sadr Hashemi Nejad has denied. The next court hearing for Ali Sadr Hashemi Nejad is scheduled for May 2019, eight months later. Ali Sadr Hashemi Nejad is currently free on bail of over $32 million and resides in Washington.