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August 16, 2010

Below-guideline (but still significant) prison sentence for scientist convicted of violating a trade embargo with Iran

This AP story headlined "Iran-embargo defendant gets 2 1/2 years in prison"  and this BusinessWeek story headlined "Ex-McKinsey Consultant Gets 2 1/2 Years in Iran Case," both report on an interesting and unusual federal sentencing today in NYC.  Here are the basics frm the BusinessWeek account:

Former McKinsey & Co. consultant Mahmoud Reza Banki was sentenced to 2 1/2 years in prison for violating the Iran trade embargo and running an unlicensed money-transfer business. Banki, a naturalized U.S. citizen born in Iran, was accused of running a “value-transfer” business that essentially moved money to residents of Iran from 2006 to 2009 in violation of the U.S. embargo.

Banki received about $4.7 million as part of the transfer process and used the money to buy a $2.4 million condominium, invest in securities and pay credit-card bills, the government charged.

“I deeply regret everything that has happened,” Banki told U.S. District Judge John Keenan before his sentencing. “I will learn from it and be a better man.” 

Keenan said sentencing guidelines called for 63 to 78 months, which he said was too long. He called Banki “a highly educated young man” who was unlikely to return to criminal activity.  Banki, 35, has a PhD from Princeton in chemical engineering.

A federal jury in New York convicted Banki in June of all five charges against him. Banki has been in custody since his arrest in January.

The AP report add these interesting details:

Mahmoud Reza Banki winced when his sentence was announced, and numerous spectators among his more than 50 supporters cried openly or wiped tears.

Banki, 35, had faced up to 25 years in prison after he was convicted in June, but even federal prosecutors conceded that the unusual aspects of the case meant that Banki deserved a reduction from the more than five years in prison that sentencing guidelines recommended....

Banki's attorney, Baruch Weiss, asked Keenan to let his client go free, saying the seven months he has spent in prison since his arrest were sufficient.  Weiss said Banki wanted to return to his dream of finding ways to finance stem cell research so replacement organs such as kidneys could be produced without the need for donors....

In a presentence letter to the court, the government highlighted the threat to national security that it believes hawalas pose, saying "financial transactions with a country supporting international terrorism implicate national security by definition."

It said funds transferred to Iran are inevitably used to strengthen Iran's economy. "This — the strengthening of the economy of a country that supports international terrorism — is exactly what the embargo was designed to avoid," the government wrote.  The government also accused Banki of using the money sent to him by his father to invest in a home and securities and "to finance a lavish lifestyle."

The judge has signed an order requiring Banki to forfeit the $3.4 million. Weiss said Banki will appeal his conviction and the forfeiture order.

August 16, 2010 at 03:55 PM | Permalink

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