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By Matthew Russell Lee, Thread, Patreon Song

SDNY COURTHOUSE, March 8 – Iranian banker Ali Sadr Hashemi Nejad is on trial, charged with money laundering and violating US sanctions including through a Venezuelan infrastructure project. He is represented by lawyer Reid Weingarten of Steptoe & Johnson and, on November 25 as reported by Inner City Press by Brian M. Heberlig before U.S. District Court for the Southern District of New York Judge Alison J. Nathan.

  On Sunday, March 8 [alongside this song] the US Attorney Office which is slated to close its case on March 9 filed this mea culpa: "This weekend, AUSA Lake came upon GX 411 in Outlook while organizing emails related to this case and others. At the time, AUSA Lake concluded that the Government may wish to offer GX 411 in its case in chief, consulted the other members of the prosecution team, marked GX 411 as an exhibit, and emailed it to defense counsel.  It was only in the context of this process that the Government realized that GX 411 was not part of Bank-1’s subpoena production, which had been provided to the defense in discovery. Government Exhibit 411 is a voluntary disclosure that Bank-1 made to OFAC after clearing a payment from an entity affiliated with PDVSA in Venezuela to Stratus International Contracting (the “Payment”), which was one of the entities the defendant used to receive payments on behalf of IIHC. In the voluntary disclosure, dated June 16, 2011, Bank-1 noted that it had processed the Payment on April 4, 2011, but flagged it for potential money laundering after the fact, on April 20, 2011. The disclosure goes on to note that, after the Payment was alerted, Bank-1 investigated Stratus and learned that “Stratus was founded in 1978 in Tehran, Iran; Stratus International specializes in providing contracting services to infrastructure projects such as roads, railways, dams, tunnels, airports and buildings; Stratus is presently working on a 7000 Apartment Unit ‘New Ojeda’ Housing Development Project in Venezuela.”  It further reported that, on May 12, 2011, Bank-1 received a response to its inquiry to the remitter bank, stating, in sum and substance, that Stratus’s address is in Turkey, it is registered in Turkey, it does construction in, among other places, Venezuela, and the payment was for the “construction of a 7000 apartment unit project” in Venezuela.  Bank-1 concluded that “Although Stratus is not listed as an SDN, and the payment does not indicate any direct involvement of Iran or with Iran, due to conflicting information between the website and the response forwarded by the bank in Caracas, [Bank-1] believes it appropriate to share this information with OFAC since Stratus may be an Iranian Company. We have added Stratus into our sanctions filter to monitor any future payments.”  GX 2032 and 2034 show that Bank-1 sent a series of questions to the remitter bank on April 27, 2011 related to the Payment. Those questions were ultimately forwarded to the defendant. The defendant responded with misleading information, including by failing to answer one of the questions posed about the identity of the beneficial owners and Citizenship of the owners of Stratus International Contracting. II. The Defendant’s Brady Claim Based on conversations the Government has had with defense counsel this weekend, the Government now understands how GX 411 advances the defendant’s claim that any decision by OFAC not to take enforcement action following this disclosure is probative of the risk of harm from OFAC enforcement that banks face when they process transactions in violation of the sanctions laws. The Government is currently seeking to confirm whether OFAC took any action based on Bank-1’s disclosure, and is willing to stipulate that OFAC did not take action against Bank-1, the Stratus entities, or the defendant...  The Government regrets its error and is working to confirm that there is nothing else related to the Bank-1 investigation that has any bearing in this case, and that there have been no other omissions from the materials produced to the defense, both at the U.S. Attorney’s Office and DANY. And, in light of our late disclosure of GX 411, we will not seek to offer it at trial. To the extent the defense wishes to offer GX 411 in its case, the Government has no objection and will stipulate to its admissibility. As a result, the defendant is not prejudiced by the late disclosure, and in light of the fact that they have not begun to present evidence, no curative instruction relating to the timing of the Government’s disclosure is necessary."

  Back on March 4 the defendant's St. Kitts and Nevis "citizenship by investment" passport was inquired into by the US - his lawyers pointed out that Canada has a similar program -- and a material witness testified about the Venezuela project. Inner City Press live tweeted thread here.

  On cross examination he was implicitly accused of having violated Iran sanctions by accepting by wire a $50,000 payment from the defendant's father. Inner City Press earlier in the week reported on this witness getting his own free lawyer, back dated to December 2019 when he began speaking with the US Attorney's Office, here. More on Patreon here.

  After jury selection on March 2, the opening arguments took place on March 3, and Inner City Press live tweeted them, thread here. In sum, while the government said it will show that Ali Sadr intentionally evaded sanctions, Weingarten portrayed Ali Sadr as hating the Mullahs and having a "pure heart," only want to help his father.

  A witness speaking in Farsi was laboriously questioned by Assistant US Attorney Michael Krause about the Venezuela project. More on Patreon here.

   Back on November 25, Heberlig argued at length for the suppression and return of emails seized, saying that looking for emails about money laundering was too broad. He insisted that his clients project in Venezuela was pure business, and that the government should have have been looking into his trips to Iran.

  As a civil libertarian, the arguments were attractive. In a courthouse where less affluent defendants are processed through in much different ways, less so.

  The government has two weeks to go page by page through their May 2018 420 PDFs; the defense got the same two weeks to pick out their seven or so worst examples of overreach. Two senior AUSA who sat through most of the argument left before Heberlig's final barrage. For those keeping score, the government ceded most ground in this hearing. Meanwhile in the Magistrates Court on less fancy crimes they are requesting detention in nearly every case. Inner City Press will have more on this.

   At the earlier Curcio hearing while adding prior Steptoe clients Citibank, UBS and Commerzbank to Steptoe's script, Nathan found the Sadr knowingly waived all conflicts of interest.

  Then a surprise: Assistant US Attorney Michael K. Krouse acknowledged that yet to be turned over are e-mails from seven custodian other than Sadr, somehow lost in the cracks of the case. Judge Nathan gave Krouse a week to provide a status update, with full production to be completed in two weeks and a response by Steptoe a week after that. They will be seeking to exclude these e-mails.

  On the bracelet removal request, Judge Nathan said she saw no reason to do it. Weingarten replied that Pre-Trial favors it, and that he wants to meet with Sadr until midnight. The government's position will be known in a week and more from Steptoe if the government opposes either. It's good to have money, in essence. This is not how lower income defendants are often treated in the SDNY. The case is USA v. Nejad,  18-cr-00224 (Nathan). More on Patreon here

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