Back in March, a US jury found Hasheminejad guilty of bypassing US sanctions on Iran by using a complex web of companies to funnel $115 million from a Venezuelan construction project to his father, major Iranian businessman Mohammad Sadr Hashemi. He was due to be sentenced in August. 

However, Manhattan Attorney Geoffrey Berman yesterday asked a judge for permission to drop the case against Hasheminejad, due to the likelihood of continued litigation over the suppression of evidence that arose in his trial.

He said that given the resources that would be required to address the issues, “it would not be in the interests of justice to further prosecute this case”.

Sources involved in fighting financial crime in Malta described the decision by the US authorities as “unfortunate” and an “unusual and extraordinary course of action”, particularly since Hasheminejad had already been found guilty by a jury back in March.

“This is particularly surprising when considering that the case against Mr Sadr was brought forward by the US authorities which have a stellar reputation for high profile investigations and prosecutions,” the source said.

“With this in mind, as well as the US’ capabilities and resources to investigate and prosecute such cases, the failure by the US to see this case through to the end does indeed provide a clear example of the difficulties that are faced by even the most successful, well-resourced and experienced authorities to prosecute complex financial crime cases.”

They said it is hard to tell to what extent the developments in the US will affect the Maltese situation but that the case is a strong reminder how tough the investigation, prosecution and conviction of people in complex money laundering cases is.

“It is therefore no surprise that the vast majority of countries, including Malta, are failing in this respect,” they said.

Meanwhile, US financial crime consultant Kenneth Rijock said the US government’s decision to drop its case against the Pilatus Bank owner could have deeper implications than first meets the eye.

Rijock noted that the day before the US government requested the dropping of the case, Manhattan assistant attorney Emil J Bove III filed a notice of appearance, a sealed file which could indicate that a defendant, perhaps Hasheminejad himself or his co-defendant and colleague Bahram Karini, is cooperating. 

He suggested that this indicates the case involves way more than the evasion of sanctions and could even indicate that the now-closed Pilatus Bank could have shielded terrorist financing and/or the laundering of the proceeds of major international narcotics transactions.

“We need to monitor any future new case filings where Bove is the principal attorney of record, to locate the truth about what evidence Ali Sadr or Karimi disclosed to the US Attorney’s Office,” he wrote. “It wouldn’t let sanctions evaders totally off the hook unless there was a very good reason. You be the judge as to whether that serves the ends of justice.”

Pilatus Bank was thrust into the spotlight in Malta in 2017 when now-assassinated journalist Daphne Caruana Galizia alleged it was used to transfer millions from the ruling family of Azerbaijan to former Prime Minister Joseph Muscat’s wife Michelle.

A magisterial inquiry found no evidence to back up this claim, but the bank ended up losing its license after its owner was indicted in the US.

Leaked FIAU reports found reasonable suspicion of money laundering involving the bank in two cases – namely payments of €100,000 by former OPM chief of staff Keith Schembri to Nexia BT boss Brian Tonna and payments of €650,000 by Schembri to former Allied Newspapers managing director Adrian Hillman.

These two payments are the subject of separate magisterial inquires, which were launched in 2017 but which have not yet been concluded.

In September 2019, the FIAU and the MFSA presented its findings of a “transaction-by-transaction” review at Pilatus Bank to the police.