FOXNews.com
Manhattan District Attorney Robert M. Morgenthau told the Senate Foreign Relations Committee Wednesday that he has uncovered a pervasive system of fraud designed to let Iran's banks skirt U.S. and international sanctions.
By Micah Morrison
The legendary prosecutor — whose pursuit of white-collar criminals has spanned the globe — told the Senate Foreign Relations Committee that he has uncovered a pervasive system of deceitful practices and fraud designed to let Iran's banks skirt U.S. and international sanctions.
Sources told FOX News that the Morgenthau probe into Iranian money laundering schemes is broad and ongoing. So far, the Manhattan DA has struck a plea deal with a British bank and, separately, indicted a Chinese citizen and his company on charges related to Iran's violations of international sanctions designed to block its acquisition of nuclear weaponry.
In the British case, Lloyds Bank admitted it had engaged in a "stripping" scheme designed to hide the Iranian origin of more than $300 million in wire transfers. Bank coding information indicating an Iran address for the money was "stripped" from wire transfers.
Some of Iran's biggest banks — blacklisted by the U.S. and international agencies for their alleged role in nuclear armament and terror funding — are believed to have played a role in the illegal money movement.
Lloyds paid $350 million in fines and is cooperating with a joint investigation by Morgenthau and federal authorities. The British bank shut down the stripping scheme in 2004, well before law enforcement learned of the activities. According to published reports, Morgenthau is investigating at least nine other banks for similar practices.
In the China case, prosecutors from Morgenthau's office hit Chinese citizen Li Fang Wei and his LIMMT company with 118 counts of conspiracy and falsifying business records in the shipment of banned materials such as special aluminum alloys, graphite cylinders and tungsten to the Iranian military. The material can be used for nuclear weapon and missile production. LIMMT also attempted to ship to Iran sophisticated gyroscopes and accelerometers critical to the development of long-range missiles, according to Morgenthau.
The chief of Iran's Central Bank — akin to the U.S. Federal Reserve — has rejected U.S. charges of money laundering. "[Iran's] banking laws and regulations do not allow that kind of illegal activities," Mahmoud Bahmani told the government-controlled Press TV.
Morgenthau speaks exclusively to the Fox Business Network's "Scoreboard" program at 7:00 p.m. ET Wednesday night.
