Lawyer for man on trial in NY over Iran Trade Embargo violations spills family secrets to jury

Defense in Iran embargo case: Dad had mistress

NEW YORK — The lawyer for a man charged with violating the U.S. trade embargo against Iran brought tears to his client’s eyes at the start of a trial Wednesday when he disclosed that the defendant’s family moved several million dollars to the U.S. from Iran to shield it from his father’s mistress.

“This case, as you’ll see, is really a case about a broken family,” attorney Baruch Weiss told jurors in U.S. District Court in Manhattan.

Weiss spoke of the family turmoil as he defended Mahmoud Reza Banki, a 33-year-old management consultant. Banki, born in Tehran, was arrested in January on charges that he broke laws designed to protect the United States by setting up a cash-transfer network known as a hawala so money could be moved between Iran and the United States.

Assistant U.S. Attorney Anirudh Bansal portrayed Banki as a conniving and deceitful man who enabled dozens of companies and people in countries including Saudi Arabia, Kuwait, Russia and the Philippines to move more than $3 million into Iran.

In doing so, Banki was violating the Iran Trade Embargo, which was initiated in 1995 and prohibits U.S. citizens from supplying goods, services or technology to Iran and its government, the prosecutor told jurors.

But Weiss said the government had it all wrong. He said Banki never operated a cash-transfer network but merely used one to get family money moved into his bank account, something the FBI, Internal Revenue Service and other agencies were aware of but never objected to.

Weiss said Banki had no idea that anyone was receiving money in Iran in return for deposits into his bank account because he didn’t really understand the complexities of the financial transfers that were occurring.

“This in many, many ways is a tragic case,” Weiss said. “Mr. Banki is an innocent man standing before you, accused of crimes he didn’t commit.”

Banki, who has been held without bail since his January arrest, became a U.S. citizen in 1996. He attended Purdue University and the University of California, Berkeley before obtaining a doctorate in chemical engineering from Princeton University.

“He loved this country and wanted to make this country his own,” Weiss said.

Then, Weiss spoke of what he called “some pretty private family matters.”

He disclosed that the Banki family for years had been under enormous stress because “his dad was cheating on his mom.” As Weiss spoke, Banki dropped his head in to his hands at the defense table and later began dabbing tears from his eyes with a tissue.

The family decided — against the father’s wishes — to begin sending money to Banki, who could invest it so his mother would have financial stability in the future, the lawyer said.

Weiss said money transfers attracted the attention of the FBI in 2002, causing him to be interviewed three times about them. Over the next eight years, the transfers were explained to Treasury Department employees, accountants, lawyers and even a Homeland Security agent.

“Nobody said it was against the law. Nobody told him to stop,” Weiss said.

The government said Banki, who had worked for McKinsey & Co., a management consulting firm, bought a $2.4 million Manhattan condominium and made payments on his credit card accounts with much of the $3.4 million deposited into his bank account.

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

At pretrial hearings, a defense lawyer had said some members of the Banki family had a strained relationship with the Iranian government and that Banki had recently voted from the United States for an opposition candidate in the Iranian elections.

Prosecutors had said the family had close ties to the Iranian government because it runs a power-generating company that provides power to Iranian cities.

During openings Wednesday, there was no mention of the Banki family’s relationship with the Iranian government.