As the court case against Pilatus Bank owner, Ali Sadr Hasheminejad, came to an unexpected halt just before sentencing, a prominent US financial advisor is questioning whether he will try to flee justice or cooperate with the authorities.
Financial crime blogger and consultant Kenneth Rijock also highlighted the lack of legal action by the Maltese authorities, which never investigated or charged any of the directors of Pilatus Bank, saying that Malta was quickly getting a reputation as a “banana republic” for corruption and crime.
The Iranian national is currently in the US awaiting sentencing after a jury in New York found him guilty of breaching US sanctions against his home country by moving millions of dollars through a housing project in Venezuela.
In the meanwhile, Sadr has been placed under house arrest and ordered to wear a GPS tracking device to monitor his movements. Meanwhile, COVID-19 has started to spread in the US and, in an attempt to curb the numbers, the US authorities suspended all court sessions.
“Unfortunately, a number of high-profile defendants encumbered with GPS equipment have disconnected the device and fled the US, and given Ali Sadr’s reputed wealth, and probable sentence (up to 85 years potentially), he might decide not to wait around to receive his sentence,” he wrote.
The owner of the now-defunct Pilatus Bank in Malta, set up soon after the Labour Party came to power, was also found guilty of fraud conspiracy and of defrauding the US government. He was not found guilty of money laundering charges.
Rijock goes on to ask whether Sadr has a plea agreement in the works, considering the number of sealed documents related to the case. Only time would tell whether Ali Sadr will cooperate or not, he said.
Malta is Europe’s emerging ‘banana republic’
In a separate post, Rijock reiterated his question about the lack of legal action taken against the other directors and board members of Pilatus Bank by the Maltese authorities.
“In the aftermath of the guilty verdict against Pilatus Bank owner and director in the US, we have been wondering why the Republic of Malta has neither investigated nor charged any of the principal Officers and Directors of the bank with criminal conduct, especially regarding money laundering and corruption.”
The Maltese authorities lack of action created a situation where its reputation as a jurisdiction within the EU will further deteriorate.
“Malta is fast acquiring status as Europe’s emerging ‘banana republic’, where corruption and disrespect for the rule of law have become commonplace.”
He then lists the directors who were involved in the bank, for the “benefit of compliance officers at financial institutions in the EU that will want to consider whether to label them as high-risk, due to their potential exposure to civil, as well as criminal liability for Pilatus Bank’s actions”.
These include Chief Executive Officer Hamid Reza Ghanbari, COO, secretary and director Luis Felipe Rivera, director Mustafa Cetinel, director and ex-CEO Robert Lewis Klngensmith and former directors Johannes Helmut Bauer, Armin Eckermann, and Joseph Jerry Liow-Yune-Joy.
There are two Maltese citizens mentioned in the list: Claude-Anne Sant Fournier, who is a director, and former director Philip Mercieca.
The infamous bank became a subject of controversy after revelations made by murdered journalist Daphne Caruana Galizia regarding kickbacks to politicians and money laundering.
The European Banking Authority had expressed “significant concerns” over the Malta Financial Services Authority’s (MFSA) handling and supervision of the bank.
It also found that the Financial Intelligence Analysis Unit (FIAU) breached EU law in relation to the supervision of the bank.