US government seizes millions from Iran sanctions scam and thanks UAE for help

Prosecutors describe ‘elaborate scheme’ to move frozen Iranian funds around the world

Iranian President Hassan Rouhani speaking during a cabinet meeting in Tehran, Iran, December 23, 2020. EPA/PRESIDENT OFFICE HANDOUT

The US government on Tuesday said it collected $7 million in Iranian assets after unveiling a complex conspiracy that included fraudulent money transfers across the US, South Korea, the Emirates and Georgia.

A senior official thanked the UAE for its assistance in putting an end to the scam.

The recovered money was the US share of a civil forfeiture after the discovery of attempts to breach sanctions on Tehran by wiring Iranian funds to accounts overseas, the Justice Department said in a statement.

The forfeited money will be used to compensate victims of terrorist attacks.

“The funds forfeited today had been destined to benefit criminal actors who engaged in an elaborate scheme to violate US sanctions against Iran, one of the world’s leading state sponsors of terrorism,” acting assistant attorney general David Burns said.

US prosecutors say three Iranians and an American used false documents to defraud South Korean banks by transferring about $1 billion in Iranian-owned funds out of the country between 2011 and 2014.

The Iranian co-conspirators were also involved in a fraudulent scheme to place a downpayment on a Sheraton hotel in Tbilisi, Georgia, using money held in a UAE fund, US prosecutors said.

Bryan Schroder, US attorney for the district of Alaska, where some of the funds were routed, said the investigation was only possible thanks to co-operation from officials in the UAE, South Korea and Georgia.

Mr Schroder thanked “UAE authorities, the Dubai Police Department’s Anti-Money Laundering and Financial Crimes Division and the government of Ras Al Khaimah".

He also thanked the office of the prosecutor general in Georgia and the Supreme Prosecutor’s office and Ministry of Justice in South Korea.

US prosecutors identified Kenneth Zong as the American conspirator.

Zong was indicted in Alaska in December 2016 for breaching sanctions rules, but is in a South Korean prison serving time for his role in the scheme.