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US says Iran tycoon launders money for Tehran

A man holds newly issued Iranian 500,000-rials in Tehran on August 21, 2008
A man holds newly issued Iranian 500,000-rial bills in Tehran on August 21, 2008. The United States placed sanctions Thursday on an Iranian tycoon and a Malaysian bank that Washington said traded oil and laundered billions of dollars for Tehran.

The United States placed sanctions Thursday on an Iranian tycoon and a Malaysian bank that Washington said traded oil and laundered billions of dollars for Tehran.

The US Treasury said businessman Babak Zanjani ran a network to move oil and money for the Iranian government to avoid global sanctions aimed at pressing Tehran to halt its alleged nuclear weapons program.

The network involved a Swiss-based company and Malaysia-based First Islamic Investment Bank, and served arms of the Tehran government and state oil company as well as the Revolutionary Guards, the Treasury said.

It placed sanctions freezing their assets on US soil and banning US individuals and businesses doing business with them, under regulations aimed at "proliferators of weapons of mass destruction and their supporters."

"As international sanctions have become increasingly stifling, Iran has resorted to criminal money laundering techniques, moving its oil and money under false names and pretenses," said David Cohen, Treasury under secretary for terrorism and financial intelligence.

The Treasury said Zanjani, chaiman of the Sorinet Group, helped finance and manage oil sales and handling of the proceeds for Swiss-based Iranian oil trader Naftiran Intertrade Company and its parent, the National Iranian Oil Co (NIOC).

Sorinet worked through its own units, International Safe Oil and Dubai-based Sorinet Commercial Trust Bankers, as well as the First Islamic Investment Bank, to support Naftiran and NIOC, the Treasury said.

Also named for sanctions Thursday were Zanjani-controlled Kont Kozmetik, based in Turkey, and its Tajikistan subsidiary Kont Investment Bank.

Zanjani, International Safe Oil, and the Dubai and Malaysia banks were already named for European Union sanctions in December.

In an interview with the BBC last month, he denied trading Iranian oil in contravention of global sanctions on Tehran.

"I didn't buy Iranian crude oil. I was buying low-quality fuel oil to sell to Malaysia," he said.

"The US and the EU have exempted several countries from the sanctions on Iran -- Malaysia is one of them."

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