A federal criminal complaint was unsealed on Friday charging 10 Iranian nationals with running a 20-year scheme to evade anti-Iran US sanctions by disguising more than $300 million worth of transactions, the Dept. of Justice announced (Iranian Nationals Charged with Conspiring to Evade U.S. Sanctions on Iran by Disguising $300 Million in Transactions Over Two Decades). These transactions included the purchase of two $25 million oil tankers for Iran through front companies in the San Fernando Valley, Canada, Hong Kong and the United Arab Emirates.
In addition, a forfeiture complaint was filed on Friday, seeking a money laundering penalty in the amount of $157 million.
The complaint, filed in October 2020 in US District Court of Los Angeles, charges the defendants with one count of conspiracy to violate the Iranian Transactions and Sanctions Regulations, Iranian Financial Sanctions Regulations and the International Emergency Economic Powers Act.
The defendants are believed to be outside of the United States at the moment. If convicted, they would face a maximum sentence of 20 years in federal prison, but, like we said, they’ve fled from the US a long time ago. Nevertheless, Alan E. Kohler, Jr., Assistant Director of the FBI’s Counterintelligence Division, said that “the FBI has a keen ability to track nefarious actors who use the US financial system to evade sanctions. Our investigation revealed over 70 front companies were used by these individuals to hide their conspiracy in support of the Iranian Governments pursuit of nuclear weapons and sponsorship of terrorism.”
And Acting United States Attorney Tracy L. Wilkison for the Central District of California said, “In a wide-ranging scheme spanning nearly two decades and several continents, the defendants conspired to abuse the US financial system to conduct hundreds of millions of dollars in transactions on behalf of the Government of Iran. Today’s indictment is an example of the will of federal law enforcement to bring to justice those who violate our sanctions and laws designed to strengthen our national security.”
But unless Iran will be willing to extradite its agents, all those nice laws and the will to enforce them won’t yield anything.
Still, the details of the scam are amazing. This is what the DOJ reported:
According to court documents, the complaint details a decades-long conspiracy to evade U.S. sanctions on Iran, a nation which the U.S. State Department has designated as a state sponsor of terrorism. During the scheme, the defendants allegedly created and used more than 70 front companies, money service businesses and exchange houses – often using the name “Persepolis” or “Rosco” – in the United States, Iran, Canada, the United Arab Emirates and Hong Kong. The defendants also allegedly made false representations to financial institutions to disguise more than $300 million worth of transactions on Iran’s behalf, using money wired in U.S. dollars and sent through U.S.-based banks.
The complaint alleges that the defendants were aware of U.S. sanctions on Iran throughout the conspiracy. In one email exchange, for example, defendants allegedly discussed the U.S. government’s efforts to disrupt Iranian Supreme Leader Ali Khamenei’s “international financial network,” an organization allegedly designed to conceal investments from the Iranian people and international regulators. In an iCloud account, one defendant saved a press report about new U.S. sanctions imposed on firms suspected of funding the Iranian Revolutionary Guard Corps.
As alleged, several defendants operated or were employed by Persepolis Financial Services Inc., an Encino-based company that facilitated the illegal transfer of U.S. dollars on Iran’s behalf from 1999 through the early 2000s. After a Persepolis Financial executive was convicted in 2003, several defendants left the country and moved to Canada and the United Arab Emirates. There, they owned, operated or were employed by additional front companies – using the names Rosco Trading, Rosco International, Persepolis and Rosco Investment – that were used for well over a decade to secretly facilitate U.S. dollar transactions on Iran’s behalf.
In addition, several defendants allegedly used a Hong Kong-based front company known as Total Excellence Ltd. to secretly buy two $25 million oil tankers on Iran’s behalf. The U.S. later sanctioned the businessman for using Iranian money to purchase oil tankers and to help Iran ship crude oil in violation of U.S. and European Union sanctions. In 2013, two defendants allegedly defrauded a financial institution in the UAE by preparing a fraudulent invoice and making false statements indicating that a transaction in U.S. dollars – processed through a New York-based bank – was undertaken on behalf of a UAE-based front company. In actuality, the true buyer was an Iranian oil and gas company, the affidavit states.
Furthermore, in 2016, several defendants allegedly conspired to wire millions of dollars through the U.S. financial system to complete a transaction with a South Korean equipment manufacturer on Iran’s behalf. During that transaction, four defendants instructed the manufacturer to not to “mention any name of Iran” in any paperwork exchanged with financial institutions processing the transaction, the affidavit alleges. In March 2017, the South Korean company sent $1 million to a front company selected by the conspirators.
Finally, in 2016, the conspirators secretly transferred thousands of dollars into Southern California on Iran’s behalf, including $66,766 that a defendant transferred to a Santa Monica-based company with a bank account held at Wells Fargo & Co., to acquire electronic equipment at the direction of a business associate at an Iran-based company, according to the affidavit.