and ordered a new trial on charges that he ran an unlicensed money transfer business or hawala. But it upheld his conviction of lying to federal agents who were investigating his conduct.
The appeals court ruled that Banki was only involved in family remittances, which are allowed by the sanctions on Iran, and should never have been convicted of violating the sanctions law.
Mahmoud Reza Banki has already served 20 months of his 30-month sentence imposed after his conviction in June 2010. The two false-statement charges that were upheld most likely would have brought a sentence of less than six months in prison.
Lawyer Kathleen M. Sullivan, who argued the appeal on Banki’s behalf, told The Associated Press the ruling by the 2nd Circuit Court of Appeals in Manhattan was a “major vindication” for her client.
“We think it’s also a major vindication of the rule of law as applied to transactions on which the Iranian-American community depends,” she said.
Sullivan said the case against Banki was the first prosecution in the country of a person for violating the Iran trade embargo when he or she did not run a business.
The appeals court said it threw out his conviction for violating the Iran trade embargo—which was initiated in 1995 and prohibits US citizens from supplying goods, services or technology to Iran—because the law clearly states that family remittances are exempt. It also said the law is confusing on family remittances and that the legal standard requires that when a law is confusing the decision must go to the defendant.
The court ordered a new trial on charges accusing Banki of participating in an illegal money transfer business known as a hawala, in which funds don’t move across international borders though the formal banking system where records are available.
Defense lawyers had argued that Banki only knew he was receiving money from relatives in Iran and that he did not manage the hawala system that moved the money.
Over several years, Banki received about $3.4 million deposited in his bank account from his family in Iran.
Banki is currently serving his term at a federal prison camp in California. A hearing has been scheduled for November 9, when defense lawyers will request that Banki be released on bail.
Banki, 35, does not fit the profile of most Iranian-Americans who have been convicted of sanctions violations. And he was extremely apologetic at the New York court hearing where he was sentenced in 2010.
US District Judge John Keenan also seemed sympathetic. Federal sentencing guidelines called for a prison term of 5 years to 6 1/2 years, but Keenan assessed only 2 1/2 years.
The judge noted that the US sanctions on Iran are a response to the Islamic Republic’s support of terrorism and its nuclear program. The prosecution never suggested that Banki’s violations had anything to do with supporting the Iranian government or any terrorist actions. In other words, he was charged with violating the letter but not the spirit of the law. The appeals court said he didn’t violate the letter either.
Banki said then that the seven months he had spent in prison prior to sentencing had given him plenty of time to think. “I’ve agonized over and over what could I have done differently.” He said he was now “older, wiser and more distraught than ever before.” He said, “I deeply regret everything that has happened. I will learn from it and be a better man.”
Born in Tehran, Banki came to the United States for college. He received undergraduate degrees from Purdue University in Indiana and the University of California at Berkeley, then a doctorate in chemical engineering from Princeton University. He became a citizen in 1996.
