Manhattan resident indicted for violating Iran Trade Embargo by operating an unlicensed money transfer business
Mahmoud Reza Banki, a 33 year old management consultant at a major New York consulting firm -- was arrested last Thursday on an Indictment charging him with violating the Iran Trade Embargo 
and with operating an unlicensed money transfer business between the United States and Iran.
According to the Indictment Banki, a United States citizen and resident of New York, allegedly provided money transmitting services to residents of Iran by operating a "hawala," a type of informal value transfer system in which money does not physically cross international boundaries through the banking system. In the hawala system, funds are transferred by customers to a hawala operator, or "hawaladar," in one country, and corresponding funds, less any fees, are disbursed to recipients in another country by hawaladar associates on that end. Banki allegedly received wire transfers totaling approximately $4.7 million from companies and individuals --located in, among other places, Saudi Arabia, Kuwait, Latvia, Slovenia, Russia, Sweden, the Philippines, and the United States-- in a personal bank account he maintained for this purpose at Bank of America in Manhattan.
Generally, Banki did not know the wire originators personally. He received the funds with the understanding that an equivalent amount of Iranian currency would, in turn, be disbursed to intended recipients residing in Iran. Banki informed an Iran-based co-conspirator when funds had been received, and the co-conspirator then disbursed the funds, less any fees, in Iran. Banki allegedly used certain of the funds transferred into his Bank of America account to make joint investments in the United States with the Iran-based co-conspirator. Among other things, Banki used the funds to purchase a $2.4 million condominium in Manhattan; to invest in securities for his own benefit and that of the co-conspirator; and to make payments on his credit card accounts, including approximately $55,000 in one month alone in the summer of 2007.
BANKI is charged with violating the International Emergency Economic Powers Act( IEEPA), together with Executive Orders and United States Department of Treasury regulations; conducting an unlicensed money transmitting business; and conspiracy to commit those two crimes. If convicted, BANKI faces a maximum sentence of five years in prison on each of the conspiracy and unlicensed money transmitting counts, and 20 years in prison on the IEEPA violation count.
This case is being handled by the Office's Complex Frauds and Asset Forfeiture Units. Assistant United States Attorneys E. Danya Perry and Jason Hernandez are in charge of the prosecution. The charges and allegations contained in the Indictment are merely accusations, and the defendant Mahmoud Reza Banki is presumed innocent.
Earlier today theNew York Post reported that Mr. Banki was denied bail.
