Bahrain Reveals Billion-Dollar Sanctions-Busting Scheme Aided Iran

Investigators have uncovered evidence of a multibillion-dollar corruption scheme by a Persian Gulf bank that secretly helped Iran evade sanctions for more than a decade, according to documents filed in a legal dispute.

Records from a Bahraini government audit reveal that the now-closed Future Bank — a joint venture partly owned by two of Iran’s largest lenders — routinely altered financial documents to mask illicit trade between Iran and dozens of foreign partners, the documents show.

The bank allegedly concealed least $7 billion worth of transactions between 2004 and 2015, a time when many Iranian banks were barred by sanctions from accessing international financial markets, the records show.

Auditors also discovered hundreds of bank accounts tied to individuals convicted of crimes including money laundering and terrorism financing, as well as phantom loans provided to companies that operate as fronts for Iran’s Islamic Revolutionary Guard Corps, according to confidential court filings obtained by The Washington Post.

Bahraini officials likened the bank to a financial “Trojan horse” operating inside the tiny Persian Gulf country, allowing Iran to buy and sell billions of dollars’ worth of goods in defiance of international sanctions intended to punish Tehran over its nuclear program and support for terrorist groups.

Bahrain, in the papers submitted in February before an international arbitration court in the Netherlands, accused Future Bank officials of a “vast range of illicit conduct” with numerous foreign partners, adding that the activities uncovered so far are likely only the “tip of the iceberg,” because many transactions appear to have been cleverly concealed.

Read full article by Souad Makhennet and Joby Warrick on The Washington Post, April 3, 2018.