Lawyers for Pilatus banker call on court to dismiss Iran sanction charges

Lawyers for Pilatus banker Ali Sadr Hasheminejad have asked the US courts to dismiss all counts of the indictment, claiming they are “vague and overbroad allegations that do not sufficiently specify the charges”.

The latest submissions are part of Hasheminejad’s lawyers’ attempts to attack prosecutors’ charges on money laundering, bank fraud, and breach of US sanctions against Iran, for failure to state an offence and lack of specificity.

Hasheminejad is charged with having used the US and Swiss banking systems to transfer millions from a Venezuela housing project to his Iranian family’s construction business in Turkey, in breach of sanctions.

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Lawyers are now insisting that the indictment against Hasheminejad, whose private bank Pilatus had its licence suspended in Malta after his arrest in February 2018, has failed to provide critical details about all the alleged offences.

These include details on the identity of Hasheminejad’s alleged co-conspirators, the victims of his alleged bank fraud crimes, the individuals or entities in Iran to whom services were exported from the United States, and the alleged false misrepresentations underlying the bank fraud charges.

“Because the indictment fails to provide Sadr with a meaningful understanding of the ‘essential facts constituting the offense charged,’ it must be dismissed,” lawyers told the court. The indictment alleges that the Iranian International Housing Corporation, a private company incorporated in Iran and allegedly controlled by Hasheminejad and his family, contracted with a Venezuelan state-owned company to build 7,000 housing units in Venezuela for approximately $476 million.

The Venezuelan company paid IIHC for its construction services by sending wire transfers in US dollars from its foreign bank accounts to foreign bank accounts in Switzerland belonging to Clarity and Stratus Turkey, two companies outside Iran designated by IIHC as agents to receive payments on the project.

The lawyers insisted that the indictment does not allege that any funds were sent to Iran. “Nor does it allege (at least with any specificity) that Sadr acted on behalf of the Government of Iran, any Iranian financial institution, or any Specially Designated National under the Iranian Financial Sanctions Regulations. The only specific sanctions violation alleged in the indictment is the claim that Sadr conspired to ‘export’ from the United States certain ‘international financial transactions’ to Iran.”

The lawyers told the court that the Venezuelan company made approximately fifteen payments to Stratus Turkey and Clarity, totalling approximately $115 million. “While these payments allegedly occurred between April 2011 and November 2013, the alleged conspiracies cover a much longer period from 2006 to May 2014. The government should not require Sadr to speculate about such critical information… Far more is needed to allow Sadr to adequately prepare his defence and avoid surprise at trial. Under these circumstances, particulars are warranted.”

Hasheminejad’s lawyers have also argued that the US government obtained multiple search warrants for his email accounts under false and misleading pretences, “including, most notably, claims that Sadr’s family has ‘substantial ties to the Government of Iran’ and that some of the fund transfers at issue were for ‘covert projects’ between the Government of Iran and Venezuela. Both claims are false.”

Evidence submitted in court shows US investigators requested access to various email accounts of Pilatus directors and owners in 2014, to find evidence of allegations made by a confidential informant.

But defence lawyers insist the warrants authorised the indiscriminate seizure of fifteen years’ worth of Sadr’s personal and business-related email accounts “for any evidence that tended to reflect a broad array of criminal conduct without any temporal or other restrictions. For these reasons, the search warrants were unconstitutional.”

Lawyers now want the court to order a Franks hearing, which determines whether a police officer’s affidavit used to obtain a search warrant that yields incriminating evidence was based on false statements by the police officer.

The lawyers claim the warrant made false and substantiated statements about Hasheminejad’s links to the Iranian government. “The April 2014 affidavit falsely claims that Sadr, his company (Clarity), his family, and his father’s company (Stratus Group) have ‘links’ to ‘entities that have been sanctioned by OFAC… for supporting Iran’s nuclear weapons program, proliferation activities, and support of terrorism.’ But the affidavit cites no evidence to support this significant claim, and in fact, neither Sadr nor any of the individuals or entities described in this paragraph have any connections whatsoever to nuclear weapons or terrorism.”

The lawyers are also attacking the charge of sanctions breaches over the use of US dollars to Iranian beneficiaries, because the money was never directly wired to Iran from Venezuela, or stayed inside the United States or other European countries.

“The government ultimately abandoned the false claim of US dollar transactions between Venezuela and Iran in the October 2015 affidavit. Effectively admitting that its previous affidavits were deceitful, the government changed ‘large, US-dollar transactions between Venezuela and Iran’ to ‘large, US-dollar-denominated payments… which primarily originated from Venezuela’ and ‘disguise[d] the Iranian connection of the recipients’.

Crucially, the Iran sanctions regime prohibits the export of services ‘to Iran’… But the Iran sanctions regime does not prohibit the export of services to recipients with an ‘Iranian connection’. To the extent Sadr has been able to locate the documents underlying the incompletely identified transactions involving unnamed countries, none of them involve a receiving bank account in Iran.”