Pilatus chairman’s lawyers tell US court bank is ‘in process of winding down’

The private bank Pilatus is in the process of winding down, lawyers for Ali Sadr Hasheminejad have confirmed.

Although no notice of liquidation has yet been filed with the financial regulator, the defence lawyers of the bank’s chairman – currently detained under arrest on charges of breaching US sanctions – told a US court the Maltese bank will be shutting down the business.

The bank passed under the control of a “competent person” after the arrest of Hasheminejad at Dulles airport, accused of using the US financial system to process payments of US dollars from a Venezuelan housing project to Iranian beneficiaries.

[EXPLAINER] Why has Malta’s Pilatus Bank chairman Ali Sadr been arrested in the United States?

Pilatus Bank was barred from liquidating, disposing, transferring or dealing with its clients’ assets and monies by the financial services regulator.

Lawyers for Hasheminejad submitted in their reply to a US government motion to refuse pretrial bail, that the bank “had its assets seized and is in the process of winding down as a direct result of the allegations in this case.”

They also said Hasheminejad was travelling to the UK to establish a new bank branch there.

But Nationalist MEP David Casa also tweeted that he was informed by UK authorities that the Pilatus Bank branch in London has been “closed” after their passporting notice had been withdrawn. “This money laundering institution has no place on our shores and the Malta branch must follow suit,” the MEP said.

Hasheminejad’s lawyers disputed claims of a previous money laundering investigation on Pilatus Bank in Malta, saying they provided the court with an “actual letter from Maltese authorities indicating that Mr Sadr was not under investigation”; and that an insinuation that Maltese authorities had “independently started an investigation is… just plain wrong.”

The MFSA appointed Lawrence Connell as a “competent person” to take charge of all the bank’s assets, including those related to the investment services business of Pilatus Bank.

Connell assumed control of Pilatus Bank’s banking and investment services for as long as the regulator deems fit. The administrator is tasked to continue carrying on the bank’s business.

The MFSA also ordered the removal of Sadr from chairman and froze the assets of the bank’s directors, shareholders and top management, in a first move on Wednesday.

Connell has enjoyed a long career as a US financial regulator at both State and federal levels.