The Venezuela Project: Canadian man charged in alleged Iranian government money laundering scheme
|globalnews.ca 10 Feb 2020 at 07:55|
An Iranian-Canadian man has been accused of bank fraud in an alleged money laundering and sanctions evasion scheme involving Iran’s government, a state-owned oil company in Venezuela, and a complex web of offshore accounts and shell companies.
Bahram Karimi, 53, was charged in New York with multiple counts — including bank fraud and conspiracy to commit bank fraud — for his alleged role in funnelling US$115 million through U.S. banks and into accounts for the Iranian government, according to an indictment unsealed last week.
And in a third count, U.S. federal prosecutors alleged that in January, Karimi tried to conceal his part in the money laundering scheme by lying to FBI investigators in Canada about his knowledge of sanctions against Iran.
But Alireza Nader, a U.S. think-tank expert who studies illicit financing operations used by the Iranian regime, said the Karimi case highlights that wealthy Iranian regime-friendly immigrants have used Canada to finance covert operations for Iran.
“The Canadian government needs to look very closely at Islamic Republic elements in Canada engaged in illicit financial and political activities,” Nader said.
The charges against Karimi, a dual Canadian-Iranian citizen, are the latest development in the so-called “Venezuela Project” case involving one of Iran’s most politically connected billionaires, Mohammed Sadr Nejad, and his son, Ali Sadr Nejad.
Ali Sadr Nejad was arrested on a visit to the United States in 2018 and charged with bank fraud, evasion of sanctions and multiple money laundering charges. Nejad has denied the charges. , arguing U.S. prosecutors have failed to identify Nejad’s conspirators and figures in Iran that benefited in the alleged scheme. A trial is expected sometime this year.
But the Venezuela Project case — which has been linked in international media reports to the murder of a journalist in Malta — was advanced for the first time since 2018 last week, with new allegations against Karimi, and a number of alleged accomplices.
While Iranian officials haven’t been named or charged in the case yet, Venezuela Project indictments accuse unidentified Iranian government figures of involvement in the scheme.
The Venezuela Project case is being handled by the of the U.S. Attorney for the Southern District of New York, Agence France-Presse reported.
According to indictments against Ali Sadr Nejad and Karimi, they are co-conspirators in a plot using Stratus Group, the Tehran-based international construction conglomerate directed by Nejad’s father.
The indictments allege the Nejad family spent years setting up shell companies and accounts in Dubai, Switzerland, the British Virgin Islands, Turkey and Iran, in order to secretly transfer funds from Venezuela’s government to entities in Iran.
Canadian anti-money laundering lawyer Christine Duhaime said the indictment against Karimi suggests he was hired for the Venezuela Project because he could use his dual-citizenship in Canada in order to help conceal “bank relationship matters between Iran and Venezuela so that (U.S.) banks … could not detect there was a nexus to Iran.”
Karimi’s indictment says in 2009, Stratus Group created the Venezuela Project Executive Committee — of which Karimi and Ali Sadr Nejad were members — “to oversee execution of the Venezuela Project … in order to conceal from U.S. banks and others, that services were being provided to Iran in violation of U.S. sanctions laws.”
The simple objective of the Venezuela Project, according to U.S. prosecutors, was to produce U.S. dollars for Iran’s government, by using a $475 million infrastructure project arranged in 2006 and funded by the governments of Iran and Venezuela.
A source with knowledge of the Venezuela Project investigation says it appears the project involved massively inflated invoices for cheaply constructed homes, with excess funds from the project routed back to Iran.
Stratus arranged to build a 7,000-unit housing project for Venezuela, with payments issued from a Venezuela state oil company, indictments allege. But in order to send U.S. dollars to Iran, the conspirators had to employ a web of secretive transactions to trick U.S. banks.
To this end, according to the indictment, Mohammed Sadr Nejad and Ali Sadr Nejad used passports from St. Kitts and Nevis to set up a company in Turkey, called StratTurk, using an address in Dubai. Another company, Clarity, was set up in Switzerland using the family’s St. Kitts and Nevis passports.
The family then opened U.S. dollar accounts at a Swiss bank for StratTurk and Clarity, indictments say, to receive payments from the Venezuelan oil company.
And after the funds from the Venezuelan oil company were turned into U.S. dollars and transferred to a Swiss bank, most of the money was transferred again, to an account in the British Virgin Islands, case filings say. The U.S. funds could then be transferred to Iran.
And Karimi allegedly helped execute these transactions.
“At all times relevant to this indictment, Bahram Karimi and others conspired to and did conduct financial transactions using Clarity and Stratus Turkey on behalf of and for the benefit of Iranian individuals and entities,” the Karimi indictment says.
Furthermore, U.S. prosecutors allege the scheme was designed for “the benefit of the Government of Iran” and that Iranian officials were directly involved.
“A high-ranking official in Stratus Group sent a letter to Iranian Government Official-1, requesting that Iranian Government Official-1 apply pressure to the subsidiary, to adhere to the terms of the contract,” the Nejad indictment alleges.
In a 2018 report for the U.S. House Homeland Security Committee — titled State Sponsors of Terrorism: An examination of Iran’s Global Terror Network — U.S. think-tank expert Emanuele Ottolenghi cited the Venezuela Project case, and Ali Sadr Nejad’s use of dual citizenship in Iran and in St. Kitts and Nevis, in the scheme of “evading Iran sanctions by laundering $115 million from Venezuela through U.S. banks.”
“Simply put: Iran and Hezbollah rely on their nationals to fraudulently obtain U.S. permanent residency status or citizenship, and citizenship of other countries so that dual passport holders can enter Western jurisdictions for the purpose of carrying out acts of terrorism, terror finance, or criminal activities,” Ottolenghi’s report says.
Duhaime says she believes many Iranian-Canadians, especially in Vancouver, are using their dual-citizenships and underground banking methods to assist politically connected Iranian tycoons — known in anti-money laundering law as politically exposed persons (PEPs) — and companies in sanctions-busting.
“If I were to guess, I would guess that Karimi was hired (by Stratus) for the fact that he has both a Canadian and Iranian passport, which is essential for Iranian businesses to do business outside of Iran,” . “And I would guess that there are a whole host of companies and people in Vancouver who perform such shadow banking services for Iran, Iranian companies, and ultra-PEPs in Iran.”