The United States Justice Department is investigating violations of the financial sanctions on Iran by
several global banks. The banks are suspected of transferring some $2 billion to various financial institutions in the Islamic Republic.
Nine major banks are involved in the black-market financial investigation, which is so far spanning from Iran to Sudan, London and Cuba.
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According to the Wall Street Journal, the probe began when Eitan Arusy, an intelligence analyst working in District Attorney's Office in Manhattan came across a lead suggesting suspicious funds were flowing to and from an Iranian nonprofit organization based in Midtown Manhattan.
Arusy's probe later merged with a Justice Department inquiry, widened to include some of Europe's most prominent banks and ultimately expanded into a global inquiry, that the banks in question actively evaded US law in aiding sanctioned countries and moving some $2 billion undetected.
Federal investigators discovered that the banks ran dedicated units to systematically aid the undetected transfer of money through the US banking system, by removing identifying coding on fund transfers so they could evade automated US bank computer systems designed to spot money flowing from a sanctioned state.
Arusy arrived at the district attorney's office in 2005 to help investigate illegal financing operations tied to the Middle East. He was hired by the Manhattan DA's office shortly after he finished his service in the IDF Spokesman's Unit, where his job included giving Arab media better access to Israeli forces.
In New York, Arusy scrutinized documents that detailed the money flows tied to a group called the Alavi Foundation. The group devotes itself to promoting Islamic culture, including the Persian language, according to its Web site; but in the past two years, federal prosecutors have alleged that the foundation is closely tied to the Iranian government.
The investigation continued into 2006 and 2007 and a big break came when the DA's office obtained emails from persons of interest in the case, detailing money transfers from Bank Melli to US banks.
Arusy found that European banks that carried out the transfers avoided US filters meant to screen for illegal or improper transactions by "stripping" wire transfer information that identified that the transfer originated from a sanctioned source.
Credit Suisse, according to court records, removed Iranian names, addresses, telephone numbers and identification codes from payment messages sent to US financial firms.
"You had to scrub your eyes when you saw these incriminating emails," Arusy, who left the DA's office in 2007 in favor of Arcanum, an intelligence firm that specializes in asset-tracing and financial crimes, said. "If you want banks to be caught, you need to have innovative ways to conduct investigations," he added.
In January 2009, Lloyds became the first of the three European banks to agree to a fine and forfeiture. Credit Suisse followed last December, and Barclays settled last month.
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