US Financial System Facilitates Illegal Iranian Oil Sales: Turkish and Omani Entities Involved

A massive scheme has been uncovered by a sweeping investigation, revealing the use of the US financial system to launder millions of dollars’ worth of illegal Iranian oil sales. The investigation involved key players from Turkey, Oman, and the United States.

How it Worked

According to court documents, Chinese buyers were arranged through electronic communications, while shell corporations in the US were used to launder the proceeds. The defendants also used US companies as a “trust” to hold profits generated by the transactions, which benefited Iran’s Islamic Revolutionary Guard Corps (IRGC).

• Turkish national Al Habsi procured a $16.5 million loan from US financial institutions in June 2020 to purchase an oil tanker, later named M/T Oman Pride.
• The tanker was used to transport Iranian oil, which was then transferred to third-party vessels for sale to Chinese government-owned refineries and companies.

The Players

• Wang, a Chinese national who served as director of a Chinese oil refinery and general manager of a US-based company, worked with a US person and relied on US financial institutions to facilitate the sale.
• A US person was involved in the scheme, which processed millions of dollars’ worth of transactions through US banks.

Investigation and Enforcement

The investigation was led by Homeland Security Investigations (HSI) Washington D.C. and the FBI Minneapolis Field Office, with assistance from the National Security Division’s Counterintelligence and Export Control Section and Counterterrorism Section.

A separate civil forfeiture complaint alleges that over 500,000 barrels of Iranian fuel oil worth $25 million on board the M/T Abyss is forfeitable under terrorism laws as property that provides a source of funds to the IRGC. The document claims that the scheme involved deceptive practices to mask the origin of the oil and falsified documents.

Response from US Attorney

US Attorney for the District of Columbia, Matthew M. Graves, said: “Forfeiture actions like this one disrupt Iran’s efforts to illegally sell oil. The proceeds from these illegal sales are the lifeblood of the Iranian’s efforts to sew war and terror around the globe, disrupting these sales is critical to our national security.”

Prior Cases

The recent enforcement actions build on prior cases brought by the Department of Justice since 2019, including seizures of illicit Iranian oil worth millions of dollars.

“Know Your Cargo” Compliance Note

A joint “Know Your Cargo” compliance note was issued in December, highlighting common tactics deployed by malign actors and recent enforcement actions taken in response to alleged violations. The case serves as a stark reminder of the importance of vigilance in preventing the use of the US financial system for illegal activities, particularly those that support state-sponsored terrorism.