Iranian company duped U.S. banks: New York indictment

Reuters News
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Posted: Jun 22, 2011 11:39 AM
Iranian company duped U.S. banks: New York indictment

By Noeleen Walder

NEW YORK (Reuters) - U.S. prosecutors took aim at Iran's main state shipping line on Monday, indicting several companies and individuals for helping the blacklisted firm's weapons proliferation activities by allegedly falsifying bank records.

The Manhattan District Attorney's Office said the state-sponsored Islamic Republic of Iran Shipping Lines, known as IRISL, used bogus companies to dupe New York-based banks into processing wire payments totaling more than $60 million.

The indictments are the United States' latest attempts to paralyze the Islamic Republic of Iran Shipping Lines (IRISL), which was slapped with financial sanctions by the U.S. Treasury in 2008 for its role in aiding Iran's ballistic missile development program.

The Treasury said on Monday it had imposed sanctions on many of the same defendants, who it said have ties to IRISL.

The indictment, filed in state court, accused the defendants of illegally moving more than $60 million through correspondent accounts at banks in New York City from September 2008 to January 2011. Fifteen other defendants are named in the 317-count indictment.

The charges capped a 14-month investigation by Manhattan District Attorney Cyrus Vance and the Treasury.

It could be difficult for prosecutors to win convictions on the indictment, given that all those charged are outside the jurisdiction of the United States. But the charges do signal a new U.S. effort to close off loopholes that may allow Iran to evade the sanctions. They also serve as a warning to banks and other international concerns that any Iran-linked activities will come under closer scrutiny.

"The point of this indictment is that sanctions exist and they've been in place for a number of years," Vance said. "To make sanctions work they have to be enforced."

The nine banks the Iranian company used to funnel funds include Deutsche Bank Trust Company Americas, JP Morgan Chase & Co., the Bank of New York Mellon Corporation, Wells Fargo Bank, N.A. and the Royal Bank of Scotland. Vance said none of the banks is accused of any wrongdoing.

The shipping company is Iran's main national carrier and has been "the carrier of choice" for weapon-procurement activities, according to Adam Kaufmann of the district attorney's office. The company engaged in "persistent efforts to deceive and misrepresent its activities in order to evade international and U.S. sanctions," Kaufmann said.

The United States has led international efforts to sanction Iran over its nuclear program, which Tehran says is purely peaceful but which Washington and its allies fear is geared toward producing atomic weapons.

Tehran is subject to a range of United Nations, U.S. and European Union sanctions which seek to shut it out of the global economy by targeting financial services, shipping and energy sector investments.

(Additional reporting by Andrew Quinn and Pedro Nicolaci da Costa in Washington; editing by Christopher Wilson)