DA Vance Announces Indictment of Iranian Shipping Line for the Illegal Use of Banks in Manhattan


June 20, 2011

Manhattan District Attorney Cyrus R. Vance, Jr. today announced a 317-count indictment of 11 corporations and five individuals for their roles in a conspiracy involving one of the world’s largest shipping companies, the Islamic Republic of Iran Shipping Lines (“IRISL”), its regional offices, and its agents.  The defendants evaded U.S. economic sanctions tied to bans on trade with countries that harbor foreign terrorists and proliferators of weapons of mass destruction. In doing so the defendants repeatedly falsified the records of banks located in New York County to access illegally the U.S. financial system. The defendants deceived Manhattan banks into processing more than $60 million worth of payments using aliases or corporate alter egos to hide their conduct.

“Today our office is shining a spotlight on the fraudulent activities of IRISL, which has been sanctioned by the United States, the European Union, and the United Nations for its role in the proliferation of weapons of mass destruction,” said District Attorney Vance. “IRISL and its sanctioned affiliates used a web of aliases or corporate alter egos across the globe to exploit the services of financial institutions located in Manhattan.  For sanctions to be effective, they must be enforced. New York remains the number one target of terrorist organizations around the world, and today’s joint action will make it more difficult for Iran, a state sponsor of terrorism. It falls to both federal and state authorities to work cooperatively in an area vital to all of our security.”

IRISL is the state-sponsored shipping line of the Islamic Republic of Iran and operates throughout the world in major shipping centers, including Singapore, the United Arab Emirates, and the United Kingdom.  IRISL, along with co-defendants HAFIZ DARYA SHIPPING LINES (a.k.a. HDS LINES), SAFIRAN PAYAM DARYA SHIPPING COMPANY (a.k.a. SAPID SHIPPING CO), ASIA MARINE NETWORK PTE. LTD. (a.k.a. ASIAN PERFECT MARINE PTE. LTD., a.k.a. IRISL ASIA PTE. LTD.), SINOSE MARITIME PTE. LTD., LEADING MARITIME PTE. LTD., CHEONG KHENG GUAN, ALIREZA GHEZELAYAGH, OASIS FREIGHT AGENCIES (a.k.a. OASIS FREIGHT AGENCIES LLC), GREAT OCEAN SHIPPING SERVICES LLC, PACIFIC SHIPPING COMPANY, MOGHADDAMI FARD, ALIREZA DAVOUDZADEH, IRINVESTSHIP LTD., FAIRWAY SHIPPING LIMITED, and MOHAMMAD HADI PAJAND, are charged with Conspiracy in the Fifth Degree. Many of the companies and individuals are also charged with multiple counts of Falsification of Business Records in the First Degree.

In September 10, 2008 the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated IRISL and affiliates working on its behalf proliferators of weapons of mass destruction, ASIA MARINE NETWORK PTE. LTD., OASIS FREIGHT AGENCIES, and IRINVESTSHIP LTD, for economic sanctions. IRISL was designated by the United States for providing logistical services to Iran’s ballistic missile programs.  In addition, defendants HAFIZ DARYA SHIPPING LINES (a.k.a. HDS LINES) and SAFIRAN PAYAM DARYA SHIPPING COMPANY (a.k.a. SAPID SHIPPING CO) were subsequently designated by OFAC on June 16, 2010, for working on IRISL’s behalf. These designations prohibit transactions with, and freeze the assets of IRISL and its affiliates, thereby isolating them from the U.S. financial and commercial systems.  Furthermore, IRISL has violated UN Security Council Resolutions by chartering vessels to transport IRISL cargo containers of ammunition and weaponry from Iran to countries linked to international terrorism.  For example, in November 2009, 36 Iranian cargo containers transporting hundreds of tons of weaponry, including rockets, missiles, mortars, and small arms, were interdicted en route to Syria via the intended port of Beirut.  It is alleged that this shipment was intended for Hezbollah.  This activity – the provision of arms to terrorist organizations – occurred during the time period charged in this conspiracy.

The international shipping industry conducts business primarily in U.S. currency and therefore the firms involved in international shipping must have access to the U.S. financial system.  Because IRISL and its sanctioned affiliates were banned from transacting with or through U.S. financial institutions, any use of their real names would have been detected and blocked by U.S. banks, which employ sophisticated anti-fraud and anti-money laundering computer systems to detect prohibited payments from OFAC-sanctioned entities.  The indictment charges that between September 10, 2008 and January 10, 2011, the defendants engaged in a conspiracy to continue their access to U.S. financial institutions to conduct business in U.S. dollars. As part of the conspiracy, IRISL and its sanctioned affiliates sent or received scores of illegal payments through Manhattan banks by using alias names and corporate alter egos in Singapore, the United Arab Emirates, and the United Kingdom.  By substituting their corporate co-defendants’ names, IRISL and its sanctioned affiliates deceived banks in New York into processing financial transactions that would have otherwise been blocked and seized. The result was the falsification of the records of banks located in Manhattan involving over $60 million in illegal payments.

CHEONG KHENG GUAN, ALIREZA GHEZELAYAGH, ALIREZA DAVOUDZADEH, MOGHADDAMI FARD and MOHAMMAD HADI PAJAND were employees of the co-defendant corporations during the relevant time period and actively participated in the conspiracy.

In a coordinated action announced today, OFAC is designating many of the co-defendants named in the indictment for their affiliations with IRISL.  They include: SINOSE MARITIME PTE. LTD., LEADING MARITIME PTE. LTD., GREAT OCEAN SHIPPING SERVICES LLC, PACIFIC SHIPPING COMPANY, FAIRWAY SHIPPING LIMITED, ALIREZA GHEZEL AYAGH, and MOGHADDAMI FARD

OFAC Director Adam Szubin said: “As the private sector around the world increasingly turns its back on Iran’s national shipping line, IRISL’s efforts to evade international sanctions and increased scrutiny have grown more and more desperate. The persistent attempts by IRISL to deceive the world, including through the front companies identified today, attest to the weakness of IRISL as it tries to maintain a semblance of legitimacy while supporting Iran’s proliferation activities.”

This case arose as part of the District Attorney’s ongoing investigations into the misuse of banks in Manhattan by those seeking to evade sanctions to support terrorism and proliferation.  Prior cases have resulted in deferred prosecution agreements with foreign banks, most recently with Barclay’s Bank in the U.K., which last year entered into a deferred prosecution agreement and paid $298 million in fines and forfeiture.  This case, which shifted in focus from financial institutions to a major industry, demonstrates the District Attorney’s continuing resolve to protect the integrity of our financial system, to stop proliferation and terror finance, and to prosecute violations of New York’s criminal laws, wherever the transgressors are found. These investigations are ongoing.

District Attorney Vance thanked the Office of Foreign Assets Control of the United States Department of the Treasury; the Federal Reserve Bank of New York; and the Wisconsin Project on Nuclear Arms Control.

Attorney-in-Charge of International Investigations Aaron Wolfson led the investigation and the Grand Jury presentation, assisted by Assistant District Attorney Dana Irvis, both of the Major Economic Crimes Bureau.  Chief of the Investigation Division Adam Kaufmann and Chief of the Major Economic Crimes Bureau Richard Weber supervised the investigation and the Grand Jury presentation.  Financial Intelligence Analysts Barbara Bruce and Lauren Lichtman, Investigative Analyst Sarah Schoknecht, and Trial Preparation Assistant Marguerite Colson worked on the investigation and the Grand Jury presentation.

Defendant Information:

Iran

  • ISLAMIC REPUBLIC OF IRAN SHIPPING LINES (a.k.a. ARYA SHIPPING COMPANY, a.k.a. IRI SHIPPING LINES, a.k.a. IRISL, a.k.a. IRISL GROUP)
  • HAFIZ DARYA SHIPPING LINES (a.k.a. HDS LINES)
  • SAFIRAN PAYAM DARYA SHIPPING COMPANY (a.k.a. SAPID SHIPPING CO)

Singapore

  • ASIA MARINE NETWORK PTE. LTD. (a.k.a. ASIAN PERFECT MARINE PTE. LTD., a.k.a. IRISL ASIA PTE LTD.)
  • SINOSE MARITIME PTE. LTD.
  • LEADING MARITIME PTE. LTD.
  • CHEONG KHENG GUAN
  • ALIREZA GHEZELAYAGH

United Arab Emirates

  • OASIS FREIGHT AGENCIES (a.k.a. OASIS FREIGHT AGENCIES LLC)
  • GREAT OCEAN SHIPPING SERVICES LLC
  • PACIFIC SHIPPING COMPANY
  • MOGHADDAMI FARD
  • ALIREZA DAVOUDZADEH

United Kingdom

  • IRINVESTSHIP LTD.
  • FAIRWAY SHIPPING LIMITED
  • MOHAMMAD HADI PAJAND

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