Iran Billionaire Sentenced to Death in Oil Fund Fraud Case

Babak Zanjani

Babak Zanjani, in blue, in a Tehran court in November 2015.

Photographer: Hemat Khahi/EPA
  • Zanjani guilty of funneling money out of Iran during sanctions
  • Analyst says Iran wants to show that it is tackling corruption

Iranian businessman Babak Zanjani was sentenced to death after being found guilty in a fraud case involving an oil fund, the state-run Iranian Students’ News Agency reported on Sunday, citing a judicial official.

The court found enough evidence to convict Zanjani and two other people, who were also sentenced to death, said Gholam Hossein Mohseni-Ejei, a spokesman for Iran’s judiciary. They were also ordered to repay a quarter of the money they laundered, according to the report. Zanjani can appeal the verdict.

Zanjani, who has denied all wrongdoing, was accused of embezzling $2.7 billion from the state-run National Iranian Oil Co. during transactions intended to circumvent international sanctions on crude exports, according to state media. Oil Minister Bijan Zanganeh said in 2014 that Zanjani used the Tajikistan branch of his own bank, First Islamic Investment Bank, to funnel the money out of Iran.

The embezzlement occurred under the presidency of Mahmoud Ahmadinejad, around the time when international sanctions against Iran peaked in 2012. Zanjani, who previously operated as an informal dealer at the oil ministry, was arrested in December 2013 after the election of President Hassan Rouhani and brought to trial last year.

Zanjani was known to have good contacts with Iran’s Revolutionary Guards, and the decision marks a political and economic “confrontation” within Iran’s political establishment between the legacy of Ahmadinejad and the new era of Rouhani, said Mahjoob Zweiri, a professor of Middle Eastern politics who studies Iran at Qatar University in Doha.

Rouhani’s government wants to show Iranians as well as foreigners that it is committed to tackling corruption as the nation opens up economically, Zweiri said. World powers including the U.S. have lifted sanctions related to Iran’s nuclear program after a landmark accord with the Islamic Republic in July.

Zanjani was blacklisted by the U.S. and the European Union for helping Iran evade sanctions.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE