Iranian National Arrested for Scheme to Evade U.S. Economic Sanctions by Illicitly Sending More Than $115 Million From Venezuela Through the U.S. Financial System
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 funneled through the U.S. financial system for the benefit of Iranian individuals and entities.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, New York County District Attorney Cyrus Vance Jr., and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.
Sadr was arrested yesterday 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.
According to the Indictment unsealed today:
Beginning in 1979, the President, pursuant to the International Emergency Economic Powers Act (the IEEPA), has repeatedly found that the actions and policies of the government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat. In accordance with these presidential declarations, the United States has instituted a host of economic sanctions against Iran and Iranian entities. This sanctions regime prohibits, among other things, financial transactions involving the United States or U.S. persons that were intended for the benefit of the Government of Iran or Iranian individuals or entities.
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.
* * *
The Indictment charges Sadr with: one count of Conspiracy to Defraud the United States which carries a maximum penalty of 5 years in prison; one count of Conspiracy to Violate IEEPA which carries a maximum penalty of 20 years in prison; one count of Bank Fraud which carries a maximum penalty of 30 years in prison; one count of Conspiracy to Commit Bank Fraud which carries a maximum penalty of 30 years in prison; one count of Money Laundering which carries a maximum penalty of 20 years in prison; and one count of Conspiracy to Commit Money Laundering which carries a maximum penalty of 20 years in prison.
The charges in the Indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. The maximum statutory sentences are prescribed by Congress and are provided here for informational purposes only. If convicted of any offense, the sentencing of the defendant will be determined by the court after considering the advisory Sentencing Guidelines and other statutory factors.
Mr. Demers and Mr. Berman praised the outstanding investigative efforts of the New York County District Attorney’s Office and the FBI. Mr. Berman also thanked the New York County District Attorney’s Office for their ongoing assistance in this investigation.
Assistant U.S. Attorneys Andrew J. DeFilippis and Matthew Laroche, and Special Assistant U.S. Attorney Garett Lynch, Deputy Chief of the Major Economic Crimes Bureau at the New York County District Attorney’s Office, are in charge of the prosecution, with assistance from Trial Attorney Matthew Walczewski of the National Security Division’s Counterintelligence and Export Control Section.