The Malta Independent 16 August 2022, Tuesday

Updated: US Justice Department says Pilatus Bank set up using ‘criminal proceeds’

Helena Grech Thursday, 24 May 2018, 10:30 Last update: about 5 years ago

The US Justice Department has accused Pilatus Bank owner, Seyed Ali Sadr Hasheminejad, of using “criminal proceeds” to set up the now infamous bank.

Ali Sadr, an Iranian banker, was detained in the USA last March and accused of circumventing US sanctions on Iran when he brokered a development deal for thousands of housing units in Venezuela. He is accused of having used American and Swiss banking systems to effect transactions $115 million, and using complicated structures to conceal that the money was ultimately to be deposited in Iran.

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He was also accused of money laundering and defrauding the United States. Sadr has been detained in a Manhattan jail since March. His first request for bail was denied on the grounds that his significant international connections and vast wealth render him to be a flight risk.

Since then, forty of his friends agreed to put up bonds totally $14 million, secured by assets worth $6 million for his release. In addition to this, Sadr has co-signed, together with his mother and two sisters a $20 million bond secured by $33 million in assets.

In the US prosecution’s objections to bail, it was argued that the assets and bonds secured by Sadr are encumbered or forfeitable, either by being frozen or stemming from criminal proceeds.

Nationalist Party MP Karol Aquilina published an extract from the document on the prosecutor’s objections this morning on social media.

The prosecution made reference to Sadr’s equity in Pilatus Bank, allegedly worth $12.9 million.

“First, the defendant concedes that this money currently is frozen, and that whatever assets remain after the bank is unwound by the Maltese authorities will be “significantly” less than $12.9 million.

“But, more significantly, regardless of how much money the defendant ultimately receives, his equity in Pilatus Bank is forfeitable because it constitutes criminal proceedings directly linked to the Venezuela project – the defendant used money from the project (CHF 1 million (Swiss Francs) and €8 million) to establish and capitalize Pilatus Bank in 2013).”

Sadr became a household name in Malta when slain journalist Daphne Caruana Galizia had alleged that the Prime Minister’s wife, Michelle Muscat, is the owner of a Panama registered company called Egrant. All involved vociferously deny wrongdoing and magisterial inquiries are currently underway.

 US Prosecutor objections to bail

 

‘Worst case scenario on Pilatus Bank appears to be unfolding’ – David Casa

In a reaction, Nationalist MEP David Casa said: “Not only do we have overwhelming evidence that Pilatus Bank was involved in criminal activity, in particular through the laundering of funds for Keith Schembri, the Prime Minister’s Chief of Staff, and his associates, as well as the Azeri regime, but it has now also been revealed that the proceeds of crime were used to set up Pilatus Bank."

Casa said he has drawn attention to strong suspicions concerning the legitimacy of the capital used to set up the bank in multiple letters to the ECB, the EBA, Moneyval and the MFSA. During a meeting with MEPs at the TAX3 Committee, MFSA representatives informed MEPs that during the due diligence process they had commissioned an ‘intelligence report’ by a foreign independent firm that cleared Pilatus Bank. The MFSA would not divulge the identity or further elaborate on the contents of this document.

“That this whole affair has been a train wreck for the MFSA is not in question. The MFSA should have protected Malta’s financial sector. Instead, it allowed Keith Schembri’s banker to set-up shop and conduct criminal activity with complete impunity. If the ‘intelligence report’ that the MFSA claims was commissioned exists,c it should be published immediately. It might slightly mitigate the huge damage this whole affair is doing to the MFSA’s reputation and for establishing whether this is a case of gross negligence or complicity. What is certain at this point is that it is either one or the other”.

 

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