Millions of dollars paid by the Venezuelan government to an obscure Iranian company for the construction of a popular housing complex that was left unfinished, were partly used to purchase property in California in violation of the trade embargo on Iran, according to a criminal indictment in New York federal court.
The accusation in the Southern District of New York last month against Ali Sadr Hashemi Nejad, a 38-year-old Iranian businessman, details a complex network of diversion and concealment "in which more than $115 in payments for a Venezuelan housing complex were illegally funneled through the U.S. financial system for the benefit of Iranian individuals and entities."
At the center of cash movements between New York, Turkey, Switzerland and Iran, is an Iranian conglomerate - Stratus Group - dedicated to construction, banking and the oil industry. One of the subsidiaries of the conglomerate won a Venezuelan government contract worth $476 million that was supervised by Ali Sadr, who faces charges of bank fraud and money laundering. He was arrested March 19 in Dulles, Virginia and faces up to 30 years in jail.
Ali Sadr, chairman of Maltese-registered Pilatus Bank, pleaded not guilty March 29. A judge denied bail, saying his wealth and connections around the world pointed to a high risk that he would flee.
Ali Sadr's name has been mentioned in connection to the death in Malta last year of the journalist Daphne Caruana Galizia who was investigating Pilatus. Caruana was sued by Pilatus over several articles she wrote that accused the bank and Ali Sadr of facilitating corrupt political activities and money laundering.
Although the company tried to hide the movement of the money to get around the embargo, according to the accusation at least $2 million were transferred to the United States for the purchase of lots in California, five in Fresno and another in an exclusive neighborhood of mansions in Malibu.
The land in Malibu was purchased for $920,000 in April 2012, according to a search of public documents by Univision Investiga. The property is listed in the name of Pegah S. Nejad in an area of luxury homes. On the same street, Winding Way, as the property, one mansion is on sale for almost $30 million, according to the real estate site Zillow. One of the lots in Fresno is valued at $806,000, while three others are valued at between $401,000 and $542,000.
The properties were seized by authorities for violation of rules that prohibit U.S. persons or entities from doing business with Iran, according to the indictment.
The New York indictment does not identify the housing project in Venezuela where the funds came from, but indicates that construction was led by Stratus Group as part of an agreement between Iran and Venezuela in December 2005. It was identified as the Ciudad Socialista Fabricio Ojeda project in the state of Zulia, according to the website Armando.info, which described it as a large development with more than 7,000 apartments that has been inaugurated several times, though never completed.
Venezuelan state media in 2015 reported the completion of 1,760 apartments in the first phase of the development of 40 buildings.
The New York case against Ali Sadr states that Stratus Group was controlled by a person identified in the indictment as CC-1 and his family, including a child whose name was not disclosed.
Using passports from the tiny Caribbean island of St Kitts and Nevis and the United Arab Emirates, Ali Sadr and CC-1 formed two companies in 2010, one in Switzerland (Clarity Trade and Finance) and another in Turkey (Stratus International Contracting).
These firms channeled about 15 payments from the Venezuelan government for about $115 million between 2011 and 2013. The funds were then sent to an offshore company in the Virgin Islands.
U.S. public records show Ali Sadr is the owner of a house located in a residential area in southern Maryland (Natelli Woods Ln) Bethesda, valued at $2 million. He also appears as residing at an apartment in Washington, DC. He is registered as president of Altitude Capital in Texas, and is a partner of Verterre, an agricultural firm in California that produces pistachio nuts. The Bethesda residence is also listed for a company, A & R, which has a branch on the island of Malta.
Ali Sadr sits on the board of Altitude Capital with Luis Felipe Rivera, the head of operations at Pilatus Bank.
Financial authorities in Malta ordered the freezing of the transactions of clients, executives and shareholders of the bank as a result of the criminal accusation against Ali Sadr in New York.
In April last year, Maltese authorities opened an investigation of Pilatus after videos of Ali Sadr came out of the bank with two briefcases. Ali Sadr and Rivera gave testimony about these facts before a local magistrate.
On March 22, he took over as Ali Sadr's lawyer in New York, Baruch Weiss, who was deputy director in charge of legal affairs at the Department of Homeland Security from 2003 to 2006.