When U.S. federal prosecutors unsealed charges last year alleging a two-decade conspiracy to evade sanctions on Iran, authorities may have tapped into a larger illicit trading network than they publicly revealed, according to an investigation by Kharon.
The U.S. charges focused on 10 individuals who were accused of establishing and using more than 70 front companies, money service businesses and exchange houses that often used similar names such as “Persepolis” and “Rosco,” prosecutors said at the time. The individuals also made false statements to financial institutions to disguise USD 300 million in transactions on Iran’s behalf, according to prosecutors.
U.S. regulators referenced the case in a recent proposed rule that would require companies to identify their beneficial owners at the time of their incorporation.
But reports from a Five Eyes money laundering probe and an Indian anti-dumping investigation show additional ties between and among the individuals charged in the U.S. case, as well as links to a U.S.-sanctioned money laundering organization and a network trading Iranian-origin petrochemicals, Kharon found.
The U.S. accusations date back to 1999, when Salim Henareh, one of the defendants, was president of Encino, Calif.-based Persepolis Financial Services, Inc., according to a civil complaint. Issa Shayegh, the company’s vice president and another defendant in the U.S. case, was convicted in 2003 in Los Angeles County for transmitting funds to Iran.
The alleged conduct continued for long after Shayegh was found guilty in the local case, though, according to U.S. federal court records. Between August 2011 and 2014, the defendants had used Rosco Trading LLC, a United Arab Emirates-based company that purportedly helped suppliers in Canada buy raw materials, equipment and machinery, to send nearly 700 wire transfers totaling more than USD 208 million to different exchange houses and MSB services around the world, according to the complaint.
Companies cited in the complaint collectively identified as the “Rosco Entities” were in fact shell companies used solely for the purposes of facilitating transactions that violated U.S. sanctions, prosecutors alleged.
The complaint also alleges the defendants’ involvement in the 2012 acquisition of two tankers on behalf of Iranian state-owned oil companies, and the attempted sale of Iran-origin industrial equipment to an unnamed South Korean buyer in 2017.
Henareh, who held management positions at several companies implicated by prosecutors, was “shocked, surprised and amazed” by the U.S. allegations, his lawyer told Canadian media in March 2021, when the U.S. unsealed its charges.
Ties to a Five Eyes Money Laundering Investigation
In March 2015, Henareh was contacted by the head of an elite civilian intelligence analyst unit working with the Royal Canadian Mounted Police (RCMP). The civilian unit head offered information on an ongoing investigation into a Canadian money laundering network, in exchange for “significant funds,” Canadian media reported.
Henareh, the president of several lending and real estate companies in the Toronto area, was named in the Canadian media report as a business associate of Farzad Mehdizadeh, a Toronto-based agent of Altaf Khanani.
Mehdizadeh and Khanani were among the suspects of a Five Eyes joint investigation into Toronto currency traders “believed to be laundering hundreds of millions in drug money annually,” and transferring funds between Iran and Canada via Dubai, according to a Canadian media report. The Five Eyes is an intelligence alliance between Australia, Canada, New Zealand, the U.K. and U.S.
Khanani leads an organization that “launders illicit funds for organized crime groups, drug trafficking organizations, and designated terrorist groups throughout the world,” the U.S. Treasury Department said in 2015, when imposing sanctions on the network.
The Royal Canadian Mounted Police (RCMP) found CAD 1.3 million in the car of Farzad Mehdizadeh during a 2016 traffic stop. Investigators suspected Mehdizadeh was “just one player in a massive underground banking scheme in eastern Canada.” Source: RCMP
Indian Anti-Dumping Investigation Uncovers Illicit Trade
Meanwhile, entities connected to Saeed Torab Abtahi, another defendant in the Rosco case filed in the U.S., were involved in shipping Iranian petrochemical products to India, helping trigger an anti-dumping investigation published in 2020 by the Indian Ministry of Commerce and Industry.
Two trading firms based in the UAE and owned by an Indian national, Thayyib Ahmed, were named in the Indian probe for exporting polystyrene on behalf of Takhte Jamshid Petrochemical Company in 2018.
Takhte Jamshid Petrochemical Company is a subsidiary of SPEC, a firm through which U.S. prosecutors said the Rosco entities had facilitated the oil tankers purchase and international transferring of funds.
Since the beginning of 2019, one of Ahmed’s companies has exported more than USD 12.5 million of Iran-origin chemical and petrochemical products, including polymers, carbon black, caustic soda, and linear alkyl benzene, to Indian companies supplying the U.S. market, according to trade data reviewed by Kharon.
At least nine Indian companies, including some that supply Western markets, have received petrochemical shipments from a UAE-based company supplied by Iranian Takhte Jamshid Petrochemical Company. More than 70 companies were used to facilitate financial transactions of subsidiaries of sanctioned companies in the Iranian oil industry, including the parent company of Takhte Jamshid.
Polystyrene, a synthetic polymer made of a liquid petrochemical, is used ubiquitously for products ranging from auto parts to food packaging. Petrochemicals have amounted to USD 5.867 billion in non-oil exports in the current Iranian calendar year beginning in March 2021, the second largest export sector behind mining and minerals, according to data from the Iranian Trade Promotion Organization.
Within the petrochemical industry, polymer raw materials, including polystyrene, polyethylene, and vinyl chloride, represented more than half of exports in the last Iranian calendar year.
“In the coming decades, the arc of consumption of petroleum products will decline, but the arc of consumption of petrochemical products will see stunning growth,” Iran’s then-deputy minister of oil and petrochemical affairs said. “Therefore, it’s necessary for the general development of the country to pay better and more serious attention to the development of the petrochemical industry.”
Source » kharon