Alaska man charged with evading sanctions on Iran, money laundering

Reuters News
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Posted: Dec 15, 2016 3:21 PM

(Reuters) - An Alaska man has been charged with evading U.S. sanctions on Iran and money laundering, the U.S. Justice Department said on Thursday.

Kenneth Zong, 77, of Anchorage, and one American and three Iranian co-conspirators engaged in fraudulent transactions intended to unlawfully convert and remove Iranian-owned funds worth approximately $1 billion from South Korean banks, the department said in a statement.

Zong was named as the sole defendant in a 47-count indictment charging him with conspiracy to violate the International Emergency Economic Powers Act, Iranian Transactions and Sanctions Regulations, and money laundering.

A federal public defender representing Zong, Rich Curtner, said he did not have an immediate comment because he had not yet met with Zong.

For his work, his Iranian associates paid Zong between $10 million to $17 million, the Justice Department said.

"In furtherance of the scheme," prosecutors said, Zong transferred $10 million from South Korea to a co-conspirator in Anchorage who then bought real estate, cars, and an interest in a yacht.

Zong is also charged with 43 counts of money laundering, and one count of money laundering conspiracy, in connection with his $10 million fee.

If convicted on one money laundering charge, Zong faces as long as 10 years in prison and a fine of up to $250,000, the Justice Department said.

An arraignment date had not yet been set, the Justice Department said.

The U.S. embargo against Iran prohibits, with limited exceptions, the export of products and services to Iran, the Justice Department said.

According to the indictment, Zong and his associates used various fake businesses and transactions from 2011 through at least April 2014 to dupe regulators to remove the roughly $1 billion in Iranian-owned funds from South Korean bank accounts.

The funds were converted into more easily traded currencies, such as U.S. dollars and euros by tricking South Korean regulators into thinking the transactions were legitimate, the Justice Department said.

The converted funds were transferred to more than 10 countries around the world, including the United States, the United Arab Emirates, Switzerland, Germany, Austria and Italy, federal prosecutors said.

(Reporting by Eric Beech in Washington and Eric M. Johnson in Seattle; Editing by Sandra Maler and Steve Orlofsky)