General · January 5, 2021 0

U.S. Government Collects $7 Million in Iranian Assets

U.S. Government Collects $7 Million in Iranian Assets for Victims of Terrorism Fund

Anchorage, AK (STL.News) U.S. Attorney Bryan Schroder announced today that the United States has collected $7 million dollars of Iranian funds that will be allocated to provide compensation to American victims of international state-sponsored terrorism.

According to U.S. Attorney Schroder, the funds are the United States’ share of a civil forfeiture investigation that is part of the Government’s pursuit of a complex international conspiracy which spanned the globe.  The conspiracy’s purpose was to violate the U.S. imposed international economic sanctions regime on Iran and included several Iranian nationals and others, who fraudulently transferred approximately one billion dollars-worth of Iranian-owned funds to accounts around the world.

Beginning in 2011 and continuing up to 2014, the conspirators, including three Iranian nationals and, allegedly, one U.S. citizen, defrauded South Korean banks by submitting false documents purporting to show that Iranian companies were doing legitimate business with Korean companies.  Based on these false documents, the conspirators succeeded in unlawfully transferring approximately one billion dollars-worth of Iranian-owned funds out of South Korea and into the world’s financial markets.

The American who is an alleged conspirator, Kenneth Zong, was indicted in December 2016 in the District of Alaska, for 47 counts of violating the International Emergency Economic Powers Act (IEEPA) and the Iranian Transaction and Sanctions Regulations (ITSR), Providing Unlawful Services to the Government of Iran, Conspiracy to Commit Money Laundering, and Money Laundering.  Kenneth Zong remains in South Korea, where he recently completed serving a sentence of longer than five years for violating Korean law as part of the same scheme.

The conspirators transferred the Iranian-owned funds to accounts worldwide, including to Anchorage, Alaska. In 2018, a federal judge sentenced Mitchell Zong (i.e.  Kenneth Zong’s son) to two and a half years imprisonment for his role in laundering approximately $968,000 of Iranian-derived funds, knowing the funds came from his father’s illegal transactions with Iranian nationals.  In a separate forfeiture civil action, Mitchell Zong and other members of his family were ordered to forfeit to the United States approximately $10 million in assets, which were purchased with funds traceable to Kenneth Zong’s 2011 illegal IEEPA activity in Seoul, South Korea.

In addition to the prosecutions of Kenneth Zong and Mitchell Zong, the U.S. Attorney’s Office filed a forfeiture complaint seeking to seize money held in a sovereign wealth fund in the United Arab Emirates. These funds, which are also traceable to the scheme, were part of a down-payment made by the Iranian co-conspirators for the purchase of a Sheraton Hotel in Tbilisi, Georgia in 2011 and 2012.  The agreement announced today resolves that forfeiture case with a proposed order that $7 million be forfeited to the United States. The forfeiture case, Civil No. 3:20-cv-00126-JMK, was filed and remains pending in the U.S. District Court for the District of Alaska.

The $7 million dollars will be allocated to the U.S. Victims of State Sponsored Terrorism Fund, which Congress established to provide compensation to certain individuals who were injured in acts of international state-sponsored terrorism, including victims of the 1979 U.S. embassy hostage situation in Iran, among others.

The United States acknowledged and expressed appreciation for the cooperation of UAE authorities, the Dubai Police Department’s Anti-money Laundering and Financial Crimes Division and the Government of Ras al Khaimah, the Office of the Prosecutor General of Georgia, and the Supreme Prosecutor’s Office and Ministry of Justice of the Republic of Korea, without whom this resolution would not have been possible.

U.S. Attorney Schroder commended the Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS-CI) for the successful investigation.  “I thank our law enforcement partners for their long-term and dedicated diligence in securing these funds for victims of state-sponsored terrorism.”

“The FBI will aggressively pursue those who aid terrorist financiers and those who abuse the U.S. financial system in the process,” said Robert Britt, Special Agent in Charge of the FBI Anchorage Field Office.  “Due to the collaborative effort put forth by the FBI and our partners, it is with great satisfaction that a portion of these successfully forfeited funds will go to American victims of international state-sponsored terrorism.”

“IRS-Criminal Investigation (IRS-CI) special agents are experts at tracing the flow of funds and throughout this investigation their skills were on display,” said IRS-CI Special Agent in Charge Justin Campbell.  “We are pleased that victims of state sponsored terror will receive these funds, and we will continue working with our partners to unravel financial transactions that promote terrorism.”

The forfeiture case and the case against Mitchell and Kenneth Zong were litigated by Assistant U.S. Attorneys Steven Skrocki and Jonas Walker. Former Deputy Chief Woo S. Lee and Senior Trial Attorney Michael Olmsted of the Criminal Division’s Money Laundering and Asset Recovery Section litigated the forfeiture cases with Assistant U.S. Attorneys Steven Skrocki and Jonas Walker.  The Justice Department’s Office of International Affairs provided valuable assistance in this matter.

An indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

SOURCE: USDOJ.Today

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