Published November 17, 2014
Facing mounting sanctions around the world, Iran's government-owned shipping company has been criminally charged with adopting aliases to con New York-based banks into processing $60 million in banned transactions, prosecutors said Monday.
The Islamic Republic of Iran Shipping Lines and 15 associated companies and agents created an international web of corporate cloaks to send and receive payments through major New York-based banks, Manhattan District Attorney Cyrus R. Vance Jr. said.
"IRISL and others have used alter egos to mask their misuse of the New York banking system, and nothing brings to clarity, in terms of dealing with sanctions, like the fact of a criminal indictment," Vance said in a conference call with reporters. "Entities outside the United States need to understand that the American government and the state government will take this seriously."
If the indictment aims to send a message, it's unclear when the defendants will appear in court to answer the charges.
The five people indicted are believed to be in the United Kingdom, the United Arab Emirates and Singapore. Prosecutors said they were working to have the defendants brought here, but Vance acknowledged they weren't certain they could.
Officials at IRISL (the acronym is pronounced ehr-IH'-suhl) didn't immediately respond to emails about the indictment, first reported Monday by The New York Times.
The shipping industry does business primarily in U.S. dollars, so companies need access to American banks, authorities said. But the Iranian company couldn't bank in its own name because the U.S. government barred it from the American financial system in 2008, saying it provided logistical services to Iran's ballistic missile programs. The shipping company also has been accused of violating United Nations Security Council resolutions by chartering vessels to transport weapons from Iran to countries linked to terrorism, Vance noted.
All the defendants face a misdemeanor conspiracy charge punishable by up to a year in jail for the individuals. Many also face a felony charge of falsifying business records, which carries the possibility of up to four years in prison. The companies, if convicted, could face fines.
The U.S., U.N. and European Union have imposed various sanctions on IRISL, but the criminal charges mark a new level of action against the company, according to prosecutors and the U.S. Treasury Department's Office of Foreign Asset Control.
Altogether, the U.S. has sanctioned 121 companies and individuals affiliated with IRISL, including 10 companies and three people added to the list on Monday, asset control office Director Adam Szubin said. Some of those added Monday also are defendants in the criminal case.
The added sanctions and criminal case are "going to make it that much harder for IRISL to sustain itself," Szubin told reporters on the conference call.
The criminal case focuses on the company's alleged banking shenanigans, not any allegations that it has been involved in transporting weapons.
While the Manhattan DA's office has at times reached multimillion-dollar settlements with banks it said were knowingly conducting forbidden business for Iranian entities, authorities said banks weren't complicit in IRISL's alleged scheme.
"The banks were deceived into processing these wire payments — that's the entire point of the conspiracy," said Adam Kaufmann, who heads the DA's investigative division.
Associated Press writer Karen Matthews contributed to this report.
Jennifer Peltz can be reached at http://twitter.com/jennpeltz