By JOSEPH GOLDSTEIN
Staff Reporter of the Sun
The Justice Department’s investigation has been ongoing for at least six months and appears to focus on possible violations of the Iran Sanctions Act, one source said. The targets of the federal probe or a separate investigation being conducted by the Manhattan district attorney, Robert Morgenthau, have not been disclosed, though two sources say several financial institutions have received informal requests for cooperation from the investigative offices. The federal investigation does not appear to be limited to European banks, which have chafed at times under American regulations on transactions involving Iran.
At a minimum, the federal probe focuses on whether New York bank branches failed to record or were deceived about the fact that transfers handled here were going to or coming from Iran. One source said some of the transactions under suspicion include purchases of oil from Iran that originated outside America. Another source said the federal investigation is also examining the flow of money from Iran.
American regulations detailing the role banks here can play in transactions in Iran are complex and change frequently. Under certain circumstances, banks here can still process “U-turn transactions,” in which money is briefly routed through America before returning to European banks as part of larger transactions involving Iran.
In 2005 a federal inquiry involving transfers with an Iranian bank resulted in a fine against a Dutch bank, ABN AMRO. Among other violations of anti-money laundering regulations, the bank’s Dubai office had hid the fact that it was doing business with Bank Melli of Iran.
Spokesmen for the Treasury Department and Justice Department did not respond to calls for comment.
