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Iranian in name only: Dual nationals hide Iran ties to avoid US sanctions

© Stringer, AFP | An Iranian woman walks past the closed offices of a travel agency in Tehran on August 24, 2018. Air France and British Airways will halt flights to Tehran in September, citing low profitability as the US reimposes sanctions on Iran.

Text by Denise Hassanzade AJIRI , Contributor

Latest update : 2018-09-07

As Washington tightens US sanctions on Iran and its citizens, Iranians are increasingly acquiring other citizenships and obscuring any ties to their homeland that might cause them to run afoul of the restrictive US measures.

Iranian-born Ali Sadr Hasheminejad, 38, was arrested March 19 at Dulles airport in Washington, DC. According to court filings, he and his mother were heading to London to celebrate the Persian new year with family. The globetrotting Sadr – a citizen of Iran and the Caribbean island of Saint Kitts – was indicted on six counts of bank fraud and scheming to evade US sanctions on Iran.

Specifically, Sadr was alleged to have conspired in a plot to funnel $115 million (€98 million) through the US financial system under a Venezuelan construction contract, federal prosecutors say. He has pleaded not guilty.

He was indicted on six counts including money-laundering and bank fraud. His case is being handled by the Terrorism and International Narcotics unit of the US Attorney for the Southern District of New York, an office known for prosecuting high-profile terrorism cases.

Sadr remains free on a $32 million (€27.5 million) bond as he awaits a jury trial set for May 2019.

Family ties

Ivy League-educated Ali Sadr Hasheminejad started as an immigrant success story. A legal US resident, he graduated from Cornell University as a civil engineer. He now owns properties in Maryland, Washington, DC, and the elite California beach city of Malibu.

Sadr has registered multiple companies in Malta, Switzerland, Hong Kong, Cyprus, the United Kingdom and the United States. Nowhere in these corporate filings is there any mention of his Iranian background even though he retains a link to the banking and construction sectors in Iran through his father,Mohammad Sadr Hasheminejad, who founded Iran’s first private bankand later one of its biggest construction conglomerates.

Obscuring their connections to Iran by acquiring other citizenships is a growing trend among Iranians, whose ties to their country of origin put them at risk of running afoul of US sanctions.

Sadr’s father Mohammad is from a village in Iran’s southern province of Kerman. In a March 2011 article in Iranian newspaper Jamejam Online he is quoted as saying: “When I graduated from university, I was wearing the same suit that I had worn on the first day of the university. My shoes were old and torn.”

Mohammad credits his considerable success in the business arena to his “perseverance”. After studying civil engineering he founded the first Iranian private bank, Eghtesad Novin Bank, in 2001 and later became thefounderand chairman of Stratus Holding Group, one of the biggest construction conglomerates in Iran.

Stratus specialises in road, dam and housing construction. It has around 60 subsidiariesand, according to an interview Mohammad gave in 2013,more than 10,000 employees.

On at least four occasions, Stratus has worked on projects for which a US-sanctioned company, Mahab Ghods, was a consulting firm. Mahab Ghods is on the non-SDN (Specially Designated Nationals) Iranian sanctions list, which bars US nationals from doing business with them.

>> US sanctions and street pressure hold Iran regime in balance

Sadr, who is a US permanent resident, says he has no connection to his father’s businesses. But US prosecutors provided the court with a copy of Sadr’s business card, which identifies him as the vice chairman of a Stratus subsidiary, Samane Stratus Investment Company, as of 2011. The exhibits remain sealed pending trial.

Stratus Holding is also active abroad in countries such as Iraq, Pakistan, Yemen and Venezuela. It was in Venezuela that a Stratus subsidiary was in charge of a housing project that US prosecutors say was used to funnel $115 million to Iran.

Multiple citizenships, multiple residences

Sadr moved from Iran to the United States in March 2000, when he was 23, to join his mother and two sisters, according to court filings. In 2003 he sought asylum claiming that, “I am certain that if I return to Iran my life would be in danger.” He further described how his family “had problems with the ruling regime in Iran”.

And yet his asylum request was made during the presidency of Mohammad Khatami, who bestowed an award on his father Mohammad that hailed him as one of Iran’s exemplary exporters”. At least publicly, it would seem Sadr’s father was well-considered by the regime. Moreover, his businesses have seen a steady rise.

Sadr received a US Green Card in 2004 based on his asylum claims. In 2010 his asylum was revoked, with authorities alleging that his affidavit include fraudulent claims. He was reissued a green card in 2012. According to his affidavit to immigration authorities, he stated: “I filed the asylum case because I possessed a genuine fear of returnto Iran.” Although Sadr had travelled to Iran multiple times between 2010 and 2015, his lawyers argued that these “short, low-profile trips” did not belie his fears of persecution.

According to company registration Pilatus Capital Ltd documents, since at least 2008 Sadr has been a citizen of Saint Kitts and Nevis, where citizenship can be acquired under a citizenship by investment programme for between $150,000 and $400,000.

Sadr’s Kittitian citizenship is his preferred identity when it comes to business; he is registered as a citizen of Saint Kitts and Nevis in 10 company filings. One filing is for his role at a scandal-hit Maltese institution, Pilatus Bank.

The Pilatus Bank case

Established in Malta in December 2013, Pilatus Bank has been under public scrutiny since Daphne Caruana Galizia, a Maltese journalist, made money-laundering allegations against the bank on her blog. Pilatus has also been the subject of controversy for allegedly helpingAzerbaijan's ruling family make secret investments.

Sadr was chairman and owner of the bank. On May 8, 2017, Sadr and Pilatus sued Galizia over her blog posts. She was killed by a car bomb on October 16, 2017, while she was still investigating Pilatus among other inquiries. The case was dismissed in late October, days after her death.

Manuel Delia, press secretary for Malta’s former PM Eddie Fenech Adamiand now a blogger on Maltese politics, says Pilatus Bank was a “big mess”. “It was this boutique sort of [thing]. It was never the sort of a bank you would walk in. We suspect that it was a money-laundering machine,” he said.

In the business registration documents relevant to Pilatus Bank and its affiliated companies, Sadr is listed as a citizen of Saint Kitts and Nevis while his official residence varies between the United States, the UAE and the United Kingdom.

According to court filings, prosecutors said that at that the time of his arrest, Sadr had at least two valid Kittian passports. His lawyer explained the two passports by saying that, “according to the Saint Kitts embassy, when a citizen runs out of passport pages, the embassy does not add pages but instead issues a new passport and returns the old passport to the citizen”.

Delia said the Henley & Partners company arranged for Sadr’s Kittian passports. “He used two Saint Kitts passports with two different dates of birth to set up companies in the UK,” he said.

The UK registrar of companies, Companies House, seems to confirm this. Sadr is recorded in Companies House as having beenborn in 1980 – his correct year of birth – as well as in 1971. He is linked to Pilatus-affiliated companies under both years of birth.

Iranian by birth British, American, Kittian by citizenship

Sadr is not the only Iranian national whose citizenship is obscured on registration papers, as a map of Sadr’s business network abroad shows. All the Iranians connected to his businesses – including his fashion-designer sister, Negarin – are registered under their alternative citizenships. Not even their addresses are linked to Iran. Officially, they are Iranians in name only.

“We have observed growing trends in attempts by wealthy individuals – particularly those from heavily sanctioned countries like Iran, Russia and Syria – to obtain third-country nationality in jurisdictions with low barriers to citizenship, like Saint Kitts and Nevis, the Comoros Islands, Antigua and various others,” said Liza Baron, senior managing investigator at Mintz Group, a leading provider of corporate investigative services.

Third-country nationality “allows individuals to more easily obfuscate their national origins”, she said.

In June 2018, Reuters published a report revealing that many Iranians have bought passports from the Comoros Islands that officials worry could be used to circumvent sanctions.

Baron says that while some wealthy individuals use their alternative nationalities as a safeguard to mitigate political risk, “it is well known in law enforcement and intelligence circles that others are specifically seeking to evade sanctions”.

“We have seen a clear increase in attempts by holders of passports from heavily sanctioned countries,” adds Baron. “For Iranians working or trading outside of Iran, we are always on the lookout for residency or nationality in other countries.”

Soon after his arrest on money laundering and other charges, Malta froze Pilatus Bank’s operationsand Sadr was forced to step down.

Date created : 2018-08-30

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