By Duncan Gardham and Thomas Harding
Corporal Daniel James also used to help run a nightclub owned by the son of the controversial property tycoon Nicholas Hoogstraten.
James is a fitness fanatic who has been a member of the Princess of Wales Royal Regiment Territorial Army unit for 17 years, friends have told The Daily Telegraph.
James, who is of Iranian descent, was recruited as a translator for Lt-Gen David Richards, commander of Nato forces in Afghanistan, to act as a translator in the Dari dialect of Farsi, one of the main languages in the country.
The 44-year-old Shia Muslim, who changed his name 10 years ago, was charged this week with passing secrets to a foreign power under the 1911 Official Secrets Act.
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He is thought to have arrived in Britain from Teheran aged 17 after the overthrow of the Shah. He married an English woman and had a son, but the couple divorced 16 years ago. His mother still lives in Iran.
He owns five houses, including an £800,000 property, which are converted into flats and rented. Yesterday his silver Lexus car was parked in the drive of one of them. James served in 6 Company, the Princess of Wales’ Royal Regiment based at Quebec barracks in Brighton, not far from Club New York, which he helped to run.
The PWRR is regarded as a leading infantry battalion after winning several medals for gallantry, including Pte Johnson Beharry’s Victoria Cross, during tours of Iraq.
As a qualified physical training instructor, Cpl James was responsible for the men’s fitness and would have earned around £29,000 plus allowances while on operations.
He joined the TA under his Iranian name but changed it for personal rather than military reasons, friends said.
Saeed Boostani, a fellow Iranian who took over the running of the nightclub, said yesterday: “He was very proud of being in the Army. I was surprised when I heard that he had been charged with spying. I never heard him utter a word that was anti-British or anti-American. He was a friend of the British.”
As a salsa teacher, James was known as Danny J and boasted of “unique dance classes which combine keep fit aerobics with salsa dancing”. He taught at leisure centres and other clubs, including The Paradox and Ocean Rooms, before taking over Club New York six years ago.
The club, now known as The Church, features a bondage night with an improvised dungeon. The session in the former church is called Debauchery and is run by a group which says it is “a collective of creative professionals with a specific interest in fetish affiliated arts”.
James was involved in running the nightclub and his name remains above the door although he resigned as a director of the company which runs it last year.
Hoogstraten, whose family holding company Tombstone Ltd is the registered owner of the club, was cleared on appeal of ordering two men to kill a former business associate. He is now being sued by the man’s family.
The Ministry of Defence has refused to comment on whether James had been subjected to Developed Vetting, a thorough form of background checks. It is thought he began working full time for the military after selling his interest in the club last February.
At Nato headquarters in Kabul yesterday a news blackout was imposed on the alleged spy case, which is delicate because it impinges on the sensitivities of tribal leaders on the Afghan-Iran border. James is likely to have translated Farsi for them so that they could speak to Gen Richards.
