A placard with a Maltese idiom that roughly translates as “The truth will always out” is seen outside the headquarters of the Maltese-registered Pilatus Bank in the town of Ta’ Xbiex. (Reuters)

March 22, 2018

Malta’s financial regulator has ordered the Iranian chairman of a bank investigated by slain journalist Daphne Caruana Galizia to step down following his arrest in the United States on charges of evading U.S. sanctions on Iran.

The Malta Financial Services Authority said in a statement on March 21 that it was ordering the removal of Ali Sadr Hashemi Nejad, 38, as Pilatus Bank director and suspend his voting rights as a shareholder.

The regulator’s decision came after charges were filed in a U.S. court in Manhattan on March 19 saying Sadr “allegedly funneled more than $115 million of a nearly $500 million Venezuelan construction contract through the U.S. banking system for the ultimate benefit of Iranians,” in violation of U.S. sanctions.

U.S. Attorney Geoffrey Berman said that Sadr “created a network of front companies and foreign bank accounts to mask Iranian business dealings in Venezuela and evade U.S. sanctions.”

Caruana Galizia’s sons Matthew, Andrew, and Paul said on March 21 that Sadr’s arrest as he was visiting the United States on March 19 ended the impunity with which he had operated and vindicated their mother’s work.

Caruana Galizia was killed in a car bombing in October.

Pilatus Bank had filed a defamation lawsuit against the investigative journalist over articles in which she accused Sadr and the bank of facilitating corrupt activities and money laundering. The bank said her reports were false.

Her sons said Malta’s actions against Sadr “vindicate our mother’s work, but it has come at a terrible cost.”

For months, “Malta’s authorities failed to hold Ali Sadr Hashemi Nejad to account, leaving our mother to do so alone. Hashemi Nejad threatened our mother relentlessly,” they said.

The move against Sadr came one day after Maria Yefimova, a Russian employee at the bank and whistle-blower who helped Caruana Galizia expose alleged corruption in the highest circles in Malta, handed herself over to authorities in Greece, saying she feared for her life.

In the U.S. sanctions case against Sadr, prosecutors said his family controlled an Iranian conglomerate called Stratus Group, which had international business operations and that led a project to construct thousands of housing units in Venezuela.

The project stemmed from agreements that Iran and Venezuela entered into in 2004 and 2005 calling for cooperation between the two governments in constructing housing in the South American country.

The indictment said an Iranian company that Stratus incorporated called Iranian International Housing Corporation entered into a $476 million deal in 2006 with a Venezuelan state-owned energy company to build 7,000 housing units.

Sadr belonged to a committee overseeing the project’s execution, prosecutors said.

They said Sadr took steps as part of the project to evade U.S. economic sanctions by concealing the role of Iran and Iranian parties in payments sent through the U.S. banking system.

AFP/Reuters/RF

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Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.