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The U.S. has imposed hundreds of sanctions against Iran for more than 30 years to temper the country's nuclear ambitions. And even though the sanctions against Iran were eased with January's nuclear disarmament deal, rules about how people in the U.S. can interact with Iran remain virtually unchanged. And their enforcement has brought harsh consequences. NewsHour's Ivette Feliciano reports.
U.S. relations with Iran are symbolized by these closed doors to the Iranian embassy in Washington, reflecting more than three decades of severed diplomatic and economic ties. Sanctions restricting interactions with Iran not only put pressure on Iran's government — they also pose roadblocks, and sometimes legal trouble, for many Iranian-Americans living here.
MAHMOUD REZA BANKI:
A dozen agents stormed into my apartment. They slammed me against the wall, and they handcuffed me in my underwear. And then they just took me away.
When FBI agents arrested Mahmoud Reza Banki at his Manhattan apartment in 2010, he thought it was a mistake. A naturalized American citizen, he emigrated to the US in 1994 at the age of 18 to attend college. He then earned a doctorate in chemical engineering at Princeton and worked for the consulting firm McKinsey and Company.
I went from being an ordinary citizen with a shot at the American dream, sleeping in my bed, in my home, to a maximum security cell in an orange jumper.
Federal prosecutors said Banki illegally received more than three million dollars over three years from his family in Iran…and that he posed a flight risk, which persuaded a judge to deny him bail.
This notion of innocent until proven guilty. I never felt that way.
To a lot of people watching this show, $3.4 million is going to sound like a lot of money. What did your parents do in Iran? How did you come into that money?
It was basically money that my parents had saved up over the years and had invested in my uncle's company.
The uncle who owned three power companies and a pharmaceutical company.
Prosecutors accused Banki of violating sanctions by running an unlicensed money transfer business. Because of strict banking regulations under sanctions, his family had used a money transfer system called a "hawala," popular in the Middle East and South Asia…and legal under US sanctions.
Cash doesn't cross borders but is given to a broker in one country, who contacts a broker in another, who gives a matching amount to the intended recipient. Both brokers keep a tally on who owes what and settle the debt in future transactions.
Banki admits the family used the hawala system to send him the funds, and he reported the money on his tax returns. But he denied operating as an unlicensed money broker, as he was charged.
At trial, a jury found Banki guilty of conspiring to violate sanctions and making false statements. After spending 11 months in jail pre-trial, Banki was sentenced to 30 more months in prison.
You need to understand that it's not illegal to receive money from a family member in the United States. The type of activity he engaged in is extremely common.
Attorney Erich Ferrari didn't represent Banki but has represented dozens of other individuals and companies investigated for violating US sanctions on Iran. After Banki was convicted, Ferrari was flooded with calls from worried Iranian-Americans.
So this is where it gets really, really tricky. There's a caveat there that there can be no debiting or crediting of Iranian accounts by a US bank. So people who are engaged in these kind of innocuous, everyday transactions have to go through these other routes.
And the other routes involve money exchangers and hawala brokers. And really a lot of these investigations are centered on the people who are the ones providing the money, making deposits, as opposed to the beneficiaries. But the beneficiaries oftentimes get caught up in the investigations and come under additional scrutiny as a result.
While Reza Banki was in prison, a federal appeals court ruled his trial jury was not properly instructed about some of the regulations, which it called "ambiguous"…and tossed out parts of his conviction, leading to his early release in 2011.
Banki's case is just one example of how complicated the sanctions against Iran can be.
For instance, you can sell property in Iran that you inherited from someone who died, but you can't sell a property that someone who is alive gave you as a gift.
Or…it's legal for an American to sell certain items to an Iranian company, but brokering the sale on behalf of an Iranian company is prohibited — considered to be exporting a service to Iran.
I think one of the issues there is that the Iranian-American community doesn't understand the sanctions in that level of detail.
Ferrari points to the case of a researcher currently facing prosecution for attempting to ship a sanctions-permitted medical device to an Iranian hospital without first obtaining a license to do so.
They're not getting into the weeds of every legal program to understand the ins and outs of it. They just hear something, okay, medical devices are authorized. You can sell your property in Iran. You can sell food to Iran. Things of that nature.
Since the 1980s, sanctions against Iran have stretched into hundreds of pages of laws, executive orders, and regulations — with about a dozen government agencies involved in enforcement.
Richard Nephew helped strengthen Iran sanctions for the u-s state department during the Obama administration, and is now teaching at Columbia University's Center on Global Energy Policy.
Sanctions are only as good as the psychological fear they create in people engaged in illicit conduct. You want them to be afraid of breaking the rules.
Nephew credits sanctions for pushing Iran to agree to the nuclear disarmament deal implemented in January.
If we hadn't gone through the sanctions regime that we had, I don't think the Iranians would fear the re-imposition of sanctions if they cheat. I would just have to ask the question, would life be much better if Iran had nuclear weapons than if not? And what is the tradeoff you're prepared to take in exchange for not having Iran possess nuclear weapons?
Does it make us safer to have somebody in prison because they were receiving funds from family back in Iran?
Obviously we can find cases where we went too far, and when there was criminal justice, you know, proceedings started against somebody who wasn't doing anything wrong.
There are also cases in which people have been able to get access to financing, get access to money from illicit sources, and be able to do harm with that. I think ultimately this is just a tension that exists when you're trying to remain open and accessible and permitting these kinds of people-to-people interactions, while at the same time safeguarding your own security.
The Justice Department' handles all criminal investigations of sanctions violations, mostly against individuals. A spokesman told the NewsHour:
"Our priority is to focus on violations that pose the greatest threat to the national security…" such as "… any goods or services relating to weapons of mass destruction or missile technology."
He went on to say: "That the U.S. criminally prosecutes Iran's procurement agents has had a chilling effect on their conduct….[and] shuts down a channel for Iran to obtain restricted commodities."
The Treasury Department's Office of Foreign Assets Control, or OFAC, handles civil violations of Iran sanctions…and since November of 2013 has imposed fines, totaling nearly 530 million dollars in 28 cases, all but one against companies or financial institutions for prohibited commercial activity.
It's impossible to know how many people are investigated, because the government does not make those numbers public. But some Iranian-Americans say sanctions enforcement intensifies scrutiny on them, not only by the government, but also by institutions like banks and universities.
There were cases of Iranian-Americans who their bank accounts were closed because they were believed to have at some point been in Iran, and so the banks decided that they couldn't take any risks.
Jamal Abdi is a policy director of the National Iranian-American council, in Washington.
Some people might say, it's the law, if somebody is violating that, whether they're doing it willingly or unknowingly, those are the rules. Why shouldn't they be investigated?
It's a fair point. There are laws. We're expected to follow them. The problem here is, the laws are so complex. It is a spider's web of laws. And so you have a lot of people who are not the intended targets of these sanctions, who are not doing anything that actually was of concern regarding Iran's nuclear program or proliferation.
Narges Bajoghli, a dual Iranian-American citizen and New York University anthropologist, says tougher sanctions made NYU nervous about her research.
It was kind of this scare frenzy that was going around.
In 2013, NYU delayed her planned field study in Iran until attorneys the university hired produced a 30-page document for OFAC to vet — about her work, her upbringing, and personal life. The process took nine months.
It definitely was beyond the parameters of the research// It really puts the onus, I think, especially on dual nationals to sort of prove where their loyalties lie.
Reza Banki, facing a possible retrial, decided to settle his pending charges. He forfeited $710 thousand, but got to keep the Manhattan apartment he bought with the money his family initially sent him. But he says his criminal conviction has ruined his reputation and made him mostly unemployable. He supports himself doing freelance consulting in technology and finance.
My family insists that I should leave the US. I want to believe that this country, my country, will come through. I choose to move ahead. I choose to look forward. I choose to rebuild this life.
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Ivette Feliciano shoots, produces and reports on camera for PBS NewsHour Weekend. Before starting with NewsHour in 2013, she worked as a one-person-band correspondent for the News 12 Networks, where she won a New York Press Club Award for her coverage of Super Storm Sandy, which ravaged the East Coast in 2012. Prior to that, Ivette was the Associate Producer of Latin American news for Worldfocus, a nationally televised, daily international news show seen on Public Television. While at Worldfocus, Ivette served as the show’s Field Producer and Reporter for Latin America, covering special reports on the Mexican drug war as well as a 5-part series out of Bolivia, which included an interview with President Evo Morales. In 2010, she co-produced a documentary series on New York’s baseball history that aired on Channel Thirteen. Ivette holds a Master’s degree from the Columbia University Graduate School of Journalism, where she specialized in broadcast journalism.
Zachary Green began working in online and broadcast news in 2009. Since then he has produced stories all over the U.S. and overseas in Ireland and Haiti. In his time at NewsHour, he has reported on a wide variety of topics, including climate change, immigration, voting rights, and the arts. He also produced a series on guaranteed income programs in the U.S. and won a 2015 National Headliner Award in business and consumer reporting for his report on digital estate planning. Prior to joining Newshour, Zachary was an Associate Producer for Need to Know on PBS, during which he assisted in producing stories on gun violence and healthcare, among others. He also provided narration for the award-winning online documentary series, “Retro Report”.
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