Bloomberg News

Iran Arrests Nine More People in $2.6 Billion Bank-Fraud Case

October 25, 2011

Oct. 25 (Bloomberg) -- Iran’s judiciary said it has arrested nine more people in connection with a $2.6 billion banking fraud, the biggest in the country’s history.

With the latest arrests, the authorities have detained 31 of 67 suspects in the case, Prosecutor General Golamhossien Mohseni-Ejei told state television in an interview aired late yesterday. Asked whether any “prominent” person was among the suspects, he said the positions held by anyone linked to the case won’t impede the investigation.

Seven state and private banks are alleged to be connected to the fraud, which involved forging letters of credit from Bank Saderat, which is partly state-owned, to secure loans used to buy state-owned companies, Iranian state media have said.

Amir Mansour Aria Development Co. and affiliated companies linked to the family of businessman Amir Mansour Khosravi are the main entities suspected of roles in the scam, Mohseni-Ejei said on Oct. 3. President Mahmoud Ahmadinejad, who campaigned against corruption before taking office in 2005, has come under pressure as critics accuse his close aide and relative, Esfandiar Rahim Mashaei, of having ties to Khosravi. The government has denied any connection to the alleged fraud.

Eleven members of parliament called this month on the parliament’s speaker, Ali Larijani, to look into “transgressions” of the law by top officials, including Ahmadinejad, Central Bank Governor Mahmoud Bahmani and Economy and Finance Minister Shamseddin Hosseini.

Lawmakers summoned Hosseini on Oct. 23 for questioning, giving him 10 days to appear before parliament, according to the state-run Mehr news agency.

--Editors: Heather Langan, Digby Lidstone

To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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