A washing machine left outside Pilatus Bank by protestors following its owner’s arrest in the United States
Ali Sadr Hashemi Nejad used dirty money to set up Pilatus Bank in 2013, US prosecutors have alleged.
In court, district attorney Geoffrey Berman countered Sadr’s recent request for bail by arguing that he cannot use his estimated $12.9 million equity in the Maltese bank as security to get himself out of jail because the money “constitutes criminal proceeds”.
Sadr has been charged in Manhattan with money laundering and evading US sanctions on Iran by setting up complex offshore structures that allowed him to channel funds from a Venezuelan housing project through the US banking system.
Pilatus Bank itself was not previously implicated in these charges, but Berman has now claimed that Sadr had used dirty money from the Venezuelan housing project to set up the Maltese bank.
“Regardless of how much money the defendant ultimately receives, his equity in Pilatus Bank is forfeitable because it constitutes criminal proceeds directly linked to the Venezuela project,” he wrote. “The defendant used money from the project (1 million Swiss francs and €8 million) to establish and capitalise Pilatus Bank in 2013.”
Berman also claimed that money from the housing project was used to purchase Sadr’s apartment in Washington DC, pistachio farms in California, his sister’s vacant land and apartment in California, and his mother’s apartment in Maryland.
Sadr had included all of these assets as part of a $20 million bond package to secure his bail, but Berman is now arguing that the source of their funding makes them subject to forfeiture anyway.
Berman also poked holes in a second $14 million bond package put together by several of Sadr’s relatives and closest friends. This is because a quarter of it comes from Sadr’s family’s property, which is pursuant to forfeiture, while a third of it comes from property outside the United States, which the US government might not be able to seize were Sadr to break his bail conditions.
Berman’s arguments were first flagged on social media by Nationalist MP Karol Aquilina, who used the hashtags ‘shameless’ and ‘fake due diligence’ – a clear jibe at the Malta Financial Services Authority for granting Sadr a banking license in the first place.
I, of course, had no doubt that @PilatusBank got its license thanks to cronyism. But I could not imagine that illegal proceeds have been used to establish it. How could @MFSAComm take such a risk? You don’t need a Russian spy, guys, you are pretty self-destroyable ))) https://t.co/jA92BfIKU4
— Maria Efimova (@MariaEfimova7) May 24, 2018
Maria Efimova, the former Pilatus Bank employee turned whistleblower, also questioned the MFSA’s failure to establish the source of the funds.
“I had no doubt that Pilatus Bank got its license thanks to cronyism, but I could not imagine that illegal proceeds had been used to establish it,” she tweeted. “How could the MFSA take such a risk? You don’t need a Russian spy, guys, you are pretty self-destroyable.”