Iranian Charged in Sanctions Case as U.S. Steps Up Crackdown

(Bloomberg) -- An Iranian businessman faces U.S. charges of evading economic sanctions on Iran by moving $115 million from Venezuela through the U.S., signifying that prosecutors are intensifying a crackdown on illicit attempts to transfer money through the American financial system.

Ali Sadr Hashemi Nejad was arrested and charged on Monday. Sadr, whose family controls the Iranian conglomerate Stratus Group, illegally moved the money through the U.S. as part of a $476 million deal to build 7,000 housing units in Venezuela, U.S. prosecutors said.

The charges come two months after Turkish banker Mehmet Hakan Atilla was convicted of helping Iran evade U.S sanctions. The government’s star witness against Atilla, who headed international banking at state-owned Turkiye Halk Bankasi AS, was a Turkish-Iranian gold trader who testified about how Halkbank secretly moved Iran’s cash from overseas oil sales through the global financial system to help pay Iran’s bills.

“The arrest of Sadr shows that US economic sanctions against Iran are for real, and violators will be exposed and prosecuted,” U.S. Attorney Geoffrey Berman said on Twitter Tuesday as he announced the charges.

Sadr, 38, is alleged to have set up a network of front companies and foreign bank accounts to hide the business between Venezuela and the Iranian companies. The charges stem from an investigation begun by the Manhattan District Attorney Cyrus Vance in 2013.

Housing Units

The charges stem from what prosecutors said was a 2005 deal in which Iran agreed to build thousands of housing units in Venezuela, a project led by Stratus Group. The following year, a Venezuelan state-owned energy company agreed to pay $476 million to a Stratus Group-formed company for the work, prosecutors said.

Sadr is alleged to have helped the Venezuelan company pay $115 million by “concealing the role of Iran and Iranian parties in U.S. dollar payments sent through the U.S. banking system,” prosecutors said.

“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” the Stratus Group-formed company, they said.

Sadr was arrested in Dulles, Virginia, according to an arrest warrant filed with the federal court in Alexandria, Virginia. He’s in the custody of U.S. Marshals and is to be transported to New York. He faces six counts including conspiracy, money laundering and sanctions violations. The maximum penalty for bank fraud is 30 years behind bars.

Sadr’s lawyer, Baruch Weiss, declined to comment.

The case is U.S. v. Sadr, 18-cr-00224, U.S. District Court, Southern District of New York (Manhattan).

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