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Manhattan DA: Iran Sanction Evasion Scam Smashed; New Sanctions Imposed

21 Jun 2011 00:45Comments

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Iran Daylight Time (IRDT), GMT+4:30

IRISLContainersPeixesLoucos.jpg12:45 a.m., 31 Khordad/June 21 Eleven companies in Iran, Singapore, the United Arab Emirates, and Great Britain have been indicted by a New York grand jury on charges that they falsified documents and employed deceptive business identities to dodge U.S. economic sanctions against the Islamic Republic. According to the announcement by Manhattan District Attorney Cyrus Vance on Monday morning, at least eight banks in New York City were tricked into helping the companies process more than $60 million in forbidden transactions with Islamic Republic of Iran Shipping Lines (IRISL). As first reported by Mianeh in March, IRISL staff have admitted to routinely altering ships' names, owners, and even paintwork to evade sanctions.

As described in an ABC News report,

Iran's national shipping company is alleged to play a key logistical role in that nation's ballistic missile program as well as to serve as a conduit for supplying weapons to terrorist organizations.

[IRISL], its regional offices and affiliates as well as five individuals were charged in the 319 count indictment with using corporate shells and aliases to "exploit the services of financial institutions located in Manhattan," said Vance. [...]

Among the banks whose security measures were circumvented in the alleged conspiracy were JP Morgan Chase, Standard Chartered Bank, Bank of New York Mellon Corp, HSBC, Deutsche Bank Trust Company Americas, Bank of America, Citibank and Wachovia (now Wells Fargo), the indictment said.

The U.S. Treasury Department, in a coordinated move, imposed new sanctions on ten companies and three individuals affiliated with IRISL in Singapore, the UAE, and Britain, as well as China. An AFP report quoted Adam Szubin, director of the Treasury's Office of Foreign Assets Control, on the action:

"As the private sector around the world increasingly turns its back on Iran's national shipping line, IRISL's efforts to evade international sanctions and increased scrutiny have grown more and more desperate. [...]

"The persistent attempts by IRISL to deceive the world, including through the front companies identified today, attest to the weakness of IRISL as it tries to maintain a semblance of legitimacy while supporting Iran's proliferation activities."

UAE-based firms Pacific Shipping, Great Ocean Shipping Services, Azores Shipping, Atlantic Intermodal, Crystal Shipping and Pearl Shipping were among the designated companies.

Also singled out for Treasury action were IRISL and Asia Marine Network's agent in Singapore, Sinose Maritime, Singapore-based Leading Maritime, IRISL's regional China office Santex Lines and Fairway Shipping, a shipping company in Britain.

Asia Marine Network's managing director Alireza Ghezel Ayagh, who heads up Leading Maritime, and top IRISL mangers and executives Mohammad Moghaddami Fard and Ahmad Tafazoli were designated as well.

Last October, the Treasury Department sanctioned 37 companies based in Germany, Malta, and Cyprus Cypriot for being under IRISL ownership or control, bringing the total number of IRISL front companies and affiliates designated by the United States to 70 at that point.

Several of the companies and one of the individuals sanctioned by the Treasury on Monday were also among those charged by the Manhattan D.A.'s office. A report in the New York Post provided a full list of those named by Vance:

In addition to the Islamic Republic of Iran Shipping Lines, the indicted companies and individuals are, in Iran, Hafiz Darya Shipping Lines and Safiran Payam Darya Shipping Company; in Singapore, Asia Marine Network PTE. LTD., Sinose Maritime PTE. LTD., Leading Maritime PTE. LTD., Cheong Kheng Guan and Alireza Ghezelayagh; in the United Arab Emirates, Oasis Freight Agencies, Great Ocean Shipping Services LLC., Pacific Shipping Company[,...] Moghaddami Fard and Alireza Davoudzadeh; and in the U.K. Irinvestship Ltd., Fairway Shipping Limited and Mohammad Hadi Pajand.

A New York Times report summarized both the significance of the indictment and its limitations:

[IRISL's] ships, which operate throughout the world, have been caught smuggling a virtual bazaar of weapons in violation of a United Nations arms embargo.

But the grand jury indictment, unsealed late last week, represents the first time Irisl has faced criminal charges.

It may not be possible for the district attorney's office to convict the 11 corporations and 5 individuals charged in the indictment, as all are based outside the jurisdiction of the United States. But prosecutors hope the case will compel foreign banks, which have allowed companies linked to Irisl to open accounts using corporate aliases and then move money from those accounts into and out of the United States, to scrutinize their customers.

"There are banks giving them access and turning a blind eye," said Adam Kaufmann, executive assistant district attorney and chief of the investigation division. Mr. Kaufmann noted that the office's investigation was continuing and said the indictment sent "a clear message that this is criminal conduct and could expose banks to criminal liability."

Photo above by peixes loucos (Ethem Pekin), via Flickr.

Copyright © 2011 Tehran Bureau

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