Iranian of the Day

AP: A management consultant is accused of setting up a system for Iranians to move money internationally in violation of a U.S. embargo, and federal prosecutors used his arrest to show they are trying to stop money from flowing to Iran.

Mahmoud Reza Banki, 33, of Manhattan, ignored the dangers of breaking laws designed to protect the United States when he set up a cash-transfer network known as a hawala, U.S. Attorney Preet Bharara said. "Our laws recognize a national emergency based upon the threat Iran poses to the security of the United States," Mr. Bharara said in a Thursday statement announcing the arrest. A 2008 State Department report found that only 20% of money remitters in the United States had registered with the government even though it is a criminal offense to operate an unlicensed money-transfer business.

The Iran Trade Embargo, initiated in 1995, prohibits U.S. citizens from supplying goods, services or technology to Iran or the government of Iran. Mr. Banki was charged with violating the embargo, operating an unlicensed money-transmitting business and conspiracy to do both.

A lawyer for Mr. Banki did not immediately return a telephone call for comment.

Prosecutors said Mr. Banki operated the money-transfer business for the last four years, receiving about $4.7 million from companies and individuals in Slovenia, Russia, Sweden, the Philippines and the United States. The government said he received the funds with the understanding that an equivalent amount of Iranian currency would be sent to Iranian residents.

Meanwhile, Mr. Banki used some of the funds to make joint investments in the United States with an Iran-based co-conspirator, prosecutors said. The government said Mr. Banki bought a $2.4 million Manhattan condominium and made payments on his credit card accounts, including about $55,000 for a single month in the summer of 2007.

If convicted, Mr. Banki could face up to 25 years in prison.