Ali Sadr Hashemi Nejad, an Iranian national and former chairman of the Maltese Pilatus Bank, was arrested and charged with six counts of sanctions evasion before a Manhattan court.
His family allegedly controlled an Iranian conglomerate called Stratus Group.
Its purported subsidiary Iranian International Housing Corporation allegedly entered into a USD 476 million contract with a Venezuelan state-owned energy company to build 7,000 new housing units in the South American country. The project was based on cooperation agreements concluded between Iran and Venezuela in 2004 and 2005. Sadr, who sat on a committee supervising the project’s implementation, allegedly used a network of front companies and foreign bank accounts in Switzerland and Turkey to conceal the transfer of USD 115 million of Iranian monies to Venezuela via the US banking system.
Following Sadr’s arrest in the US, the Malta Financial Services Authority seized control of Pilatus Bank and all of the assets belonging to the bank’s customers.
Pilatus Bank lies at the heart of an intense scandal in Malta. The bank was involved in defamation litigation with the Maltese investigative journalists Daphne Caruana Galizia, who was murdered in October 2017. In several articles, she accused the bank and Sadr of facilitating corrupt political activities and money laundering.
Top officials in the Maltese government, including the prime minister Joseph Muscat, and members of Azerbaijan’s ruling family are said to have held accounts at Pilatus Bank. Already in 2016, Pilatus Bank was investigated by Malta’s anti-money laundering agency FIAU, which warned that the bank displayed
· “glaring, possibly deliberate disregard” for money laundering controls.
David Casa, a Maltese member of the European Parliament and fierce critic of Prime Minister Muscat, claims that Pilatus Bank may have been granted a banking licence due to favourable political interference by the Muscat government.
The FIAU reported that dubious transfers from Russian nationals were paid into a Pilatus Bank account in the name of Muscat’s chief of staff, Keith Schembri. The recipient, however, denies any wrongdoing.
US charges against Sadr have spurred Maltese authorities to revisit the controversy around Pilatus Bank and a court is currently considering criminal charges.
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