Iranian fintech exec gets prison time for conspiring to violate US sanctions

October 16, 2020.

The founder and former chief executive of Iranian fintech PAYMENT24 was sentenced to nearly two years in prison for his alleged role in conducting financial transactions that violated U.S. sanctions against the Middle Eastern country.

Seyed Sajjad Shahidian was sentenced Thursday to 23 months in prison, the said, after the 33-year-old pleaded guilty in June 2018. According to the department, Shahidian violated restrictions on trade and exports from the U.S. to Iran by helping clients of the financial services company purchase products online from U.S.-based businesses.

“Mr. Shahidian was the founder and CEO of a financial services firm that employed fraudulent tactics designed to circumvent United States sanctions lawfully imposed on the Government of Iran,” said U.S. Attorney Erica MacDonald. “Such actions are criminal and threaten our national security interests.”

PAYMENT24 was an online company with about 40 employees and offices in Tehran, Shiraz and Isfahan, Iran, that helped citizens there to conduct prohibited financial transactions with U.S.-based businesses, such as illegal purchases and exports of computer software and servers and software licenses, according to Shahidian’s guilty plea and court documents. The Justice Department said the fintech charged a fee to circumvent “American sanctions” and boasted of bringing millions in foreign currency into Iran.

Those records also described how PAYMENT24 sold customers packages with tools including a PayPal account, a remote IP address from the United Arab Emirates and a Visa gift card to help them execute the transactions. The company also provided guidance on creating accounts using foreign identities and avoiding restrictions on foreign websites, the department said, including suggesting that customers “never attempt to log into those sites with an Iranian IP address.”

Shahidian, who department officials noted was “a high-profile executive and a millionaire,” previously admitted to “making material misrepresentations and omissions” to the U.S. businesses regarding where their goods would end up. 

“In order to accomplish the transactions, Shahidian obtained payment processing accounts from United States-based companies like PayPal using fraudulent passports and other false residency documentation to falsely represent that his customers resided outside of Iran,” the department said. “Shahidian admitted to opening hundreds of PayPal accounts on behalf of his PAYMENT24 customers who resided in Iran and to unlawfully bringing millions of U.S. dollars into the economy of Iran.”

Shahidian’s sentence was handed down in U.S. District Court in Minneapolis. He had been arrested in November 2018 in London and was extradited to the U.S. on May 15.

“Shahidian lied to U.S. suppliers, illegally transferred funds from Iran, used fraudulent passports and IDs and established a business whose entire purpose was to circumvent U.S. sanctions and to enable others to do the same,” said Assistant Attorney General for National Security John Demers. “Today’s sentence should discourage other would-be sanctions violators from following in Mr. Shahidian’s footsteps.”