On a winding road hugging Dominica’s palm-dotted shores stand a string of partially finished luxury hotels. A few miles north, sits the future home of the Portsmouth Marina — a development seeking to draw superyachts to the island.
They are testament to a bet Dominica made three decades ago on citizenship by investment, or CBI. In essence, the tiny Caribbean nation has dished out passports to foreigners in exchange for significant lump sums. It’s brought billions into the economy, while offering an easy additional nationality to anyone whose origins might raise red flags in the financial community.
Among the willing customers for the six-figure program were a cadre of Iranians that included Hossein Shamkhani — the secretive leader of a business empire that handles strategically significant oil and arms deals for Tehran and Moscow, who also sits atop a hedge fund that’s operated in global finance hubs, according to people with direct knowledge of the matter, who requested anonymity to discuss confidential operations.
The acquisition of the Dominican documents by Shamkhani and his team was among a series of moves that allowed the Iranians to win widespread acceptance, including from Wall Street banks and Western oil majors. Shamkhani, whose father is a senior adviser to Supreme Leader Ayatollah Ali Khamenei, has made concerted efforts to keep his business interests confidential.
This story, based on interviews with more than four dozen people familiar with his network and the result of a year-long investigation, explains how Shamkhani successfully weaved the firms in his empire into the fabric of the Western financial system, even as key entities within his orbit handled Iranian arms deliveries to Russia. It identifies how he came to operate from London to Geneva, Dubai and Singapore — securing relationships with some of the biggest names in global finance.
A lawyer representing Shamkhani, who has consistently contested Bloomberg’s reporting on his business affairs, didn’t respond to specific questions for this story.
It takes in Malta and Cyprus, longstanding locales for getting citizenship in return for investment, and involves senior officials in the United Arab Emirates, a well-known lobbyist firm based a few blocks from the US Treasury Department in Washington and a clandestine logistics network moving billions of dollars of Iranian and Russian oil across the world’s oceans.
Banking Challenges
Step one was Dominica.
Born in Tehran just a few years after the Iranian revolution, Shamkhani grew up in the shadow of the Iran-Iraq War. His father held a range of senior government posts — naval commander for the Islamic Revolutionary Guard Corps and defense minister — before later getting tapped as secretary of Iran’s Supreme National Security Council.
With his father’s encouragement, the younger Shamkhani set out on his own to pursue a career in the private sector. After studying in Moscow and Beirut, he returned to Iran for a Master of Business Administration and then set up the trading firm Admiral Group — a nod to his father’s naval title — with his brother Hassan.
Dubai, just across the Persian Gulf with a large Iranian diaspora and a welcoming approach to business, proved a suitable base. But given his father’s positions and his own nationality, Shamkhani was a politically exposed person with ties to sanctioned entities — red flags for most big banks.
Dominica, roughly the size of New York City and home to some 70,000 people, offered a solution. Operating one of the world’s most flexible CBI programs since the early 1990s, the island had already generated billions of dollars from the initiative.
Better yet, physical presence isn’t required and CBI deals are regularly conducted via private brokers from Dubai, according to Kristin Surak, a professor at the London School of Economics and Political Science and author of The Golden Passport.
For a fee, Shamkhani and several close associates secured Dominican passports, according to people with direct knowledge of the matter, as well as documents and corporate records seen by Bloomberg. Some also changed their names — at the time, a completely legal procedure conducted via the island’s Deed Poll.
‘Red Carpet’
That on its own wasn’t enough.
Many banks asked for a second source of identification in line with basic know-your-customer guidelines. Their Iranian IDs clearly wouldn’t suffice. To alleviate such concerns, Shamkhani and his team used their Dominican documents to get additional passports from European Union nations including Malta and Cyprus.
With multiple foreign travel documents under aliases and alternate nationalities, the Shamkhani network could then pass compliance checks at some of the biggest names in international finance, who would otherwise have likely raised concerns over their place of birth, political exposure and ties to sanctioned entities.
Alongside Shamkhani, the Iranian nationals who secured Dominican passports included ship captain Alireza Derakhshan, nicknamed “Captain D,” who works closely with the trading firm Milavous Group Ltd.; Mahdiyar Zare Mojtahedi, a top executive at the hedge fund Ocean Leonid Investments; and Hossein Ghorbanizahed, a top associate at Golden Nest Group, who has helped Shamkhani cultivate global banking relationships.
Derakhshan obtained Dominican citizenship in 2009, according to data obtained by the Government Accountability Project. He also appears in a Turkish commercial registry as a Dominican national. In the UK, Companies House records list Zare and Ghorbanizahed as Dominican nationals.
In all three instances, no reference to Iran was made in the filings reviewed by Bloomberg.
Details on citizenship have been further obscured in recent years after the Dominican government stopped publishing foreign recipients in its Official Gazette, both past and present.
Transparency about who secured them ended in 2019 amid accusations from opposition politicians that Prime Minister Roosevelt Skerrit — in power since 2004 — personally benefited from the sales. (He has defended the program as “robust and very transparent.”) Some foreign banks subsequently cut ties with Dominica, citing efforts to de-risk, said Lennox Linton, a local lawmaker who’s raised concerns about CBI.
In July 2023, the UK ended visa-free travel for individuals with Dominica passports, setting off alarm bells across the Caribbean CBI industry. Meantime, the European Parliament has been debating whether to end such programs citing fraud and lax oversight.
“This should be banned,” said Sophie In’t Veld, who served as a Dutch member of the European Parliament for 20 years. “It’s a red carpet into Europe.”
Representatives for the governments of Dominica, Cyprus and Malta didn’t respond to requests for comment nor did Ghorbanizahed. Derakhshan and Zare declined to comment.
The Dominican program served as a springboard for Shamkhani and his associates to transform Admiral Group into a sprawling multi-billion dollar business empire spanning dozens of firms.
But it took step two — a cast of Emirati diplomats, Washington lobbyists and Iranian operatives — to keep those companies humming.
Luxury Properties
In the past decade, Shamkhani’s business empire has ballooned into an influential global commodities player. Billions of dollars in oil wealth flow through his network each year, disappearing into a maze of bank accounts, offshore companies and luxury properties.
In Dubai, he could lean into family connections when useful for business while taking on his own persona — under the pseudonym “Hector” — when rubbing shoulders with bankers, models and musicians in the city’s financial district.
But in January 2020, the businesses got a jolt when the US sanctioned his father. It served as a wake-up call for the younger Shamkhani and his associates.
On the one hand, the family had actually benefited from the Trump administration’s maximum pressure strategy against the Tehran regime because it further consolidated Iran’s most strategic industries into the hands of well-connected political elites, according to Ali Vaez, Iran program director at the Washington-based International Crisis Group.
That’s prompted accusations of corruption and mismanagement from some Iranians, who argue the nation’s oil proceeds should support the broader population at a time of significant economic strain and fuel shortages.
“The Shamkhanis are a prime example of merchants of sanctions, who are enriched by them and don’t want to see them lifted,” Vaez said.
At the same time, the younger Shamkhani didn’t want the complications that would arise from individual sanctions or enforcement actions against firms in his network.
Between the start of 2022 and early 2024, business was good.
The market dislocations that arose after Russia’s invasion of Ukraine created an opening for firms like his that had well-placed government connections and a higher risk appetite. But it also brought added scrutiny. A coalition of governments from the US to the UK, European Union and Japan sketched out a price-cap policy to penalize trading firms that supported Vladimir Putin’s war machine.
The Oct. 7, 2023 attacks on Israel and the ensuing Israeli invasion of Gaza also put greater global attention on the financing of Iranian proxies. Chief among them: The oil trading firms that hand the Islamic Republic an annual windfall of some $35 billion.
Shamkhani, with his Tehran roots and Moscow education, had a foot in both worlds.
By April 2024, the pressure on him was building. The US had just sanctioned roughly a dozen vessels in his network. Fearing more actions were coming, he withdrew large sums from his hedge fund, which he plowed into luxury property, primarily in some of Dubai’s most exclusive island developments.
At least two villas on the secluded Jumeirah Bay Island — known locally as Billionaires Island — were bought by members of the Shamkhani network, according to a Dubai real-estate database compiled by the Washington-based investigative nonprofit C4ADS.
Then he found help from several surprising figures.
Emirati Friends
As the Biden administration ramped up its Iran sanctions, Shamkhani had the benefit of support from the UAE, an influential OPEC member and one of Washington’s longstanding defense partners in the Middle East.
In private talks with American counterparts, some Emirati officials — including influential envoy Yousef Al Otaiba in Washington — have voiced their opposition to sanctions targeting him. That’s because of his father’s constructive role in a rapprochement between Tehran and Abu Dhabi, which has been credited with curtailing Houthi attacks on UAE soil, people with direct knowledge of the matter said.
On top of that, some Biden officials have privately conceded that keeping oil prices low and avoiding a trade war with China took precedence over cracking down on the so-called “whales” of the Iranian oil market like Shamkhani.
Even when there has been the political will, policymakers acknowledge that the biggest sanctions successes can often make their jobs more difficult. Taking down giant firms controlled by Shamkhani would inevitably give rise to dozens of new smaller firms that might be even harder to crack, the people said.
In response to questions from Bloomberg News, a UAE official said the country strictly abides by UN sanctions and has clear and robust processes in place to deal with sanctioned entities, which the government has exercised against a number of firms. Al Otaiba said after this story was first published that he had never engaged anyone in the US government about Shamkhani or sanctions against him.
Washington Lobbying
At the same time, Shamkhani organized and paid for an influence campaign to target Western officials with messaging that he hoped would allow some of his trading firms to avoid regulatory repercussions, people with direct knowledge of the matter said.
He turned to firms including Qorvis, a well-known Washington-based government relations company, for guidance as he sought to pressure rival traders while keeping his own entities in business, the people said.
The lobbyist’s Middle East office is based within Dubai’s commodities free zone — one of the world’s most-sanctioned jurisdictions — giving the company a front-row seat to some market players central to the flow of sensitive cargoes.
Qorvis’s market insights have granted the firm face-time with US officials who are keen to hear the latest color from the UAE. Such talks have the potential to influence who’s next in the crosshairs of Treasury’s Office of Foreign Assets Control.
While Qorvis discloses its work on behalf of a bevy of clients, from the Saudi government to commodities giant Mercuria Energy Group Ltd., its relationship with the Shamkhani network hasn’t been divulged under the Foreign Agents Registration Act.
Disclosure requirements aren’t as strict for firms supporting foreign citizens compared with those representing foreign governments, though it depends on the nature of the work.
Qorvis has met with US Treasury officials to compare notes on sanctions evasion in Dubai while downplaying the role of some firms within the Shamkhani network, the people said.
The initiative raises questions about how politically connected Iranians can potentially mask their lobbying by either not disclosing it or layering it through private firms, said Gabriel Noronha, a former State Department official who studies foreign influence.
Spokespeople for the US Treasury Department and the Department of Justice declined to comment. Representatives for Qorvis declined to comment.
Shifting Tide
There are some signs the tide might be turning against Shamkhani.
In recent weeks, Dubai’s international financial free zone suspended multiple companies in the network and the hedge fund emerged as the subject of a probe by the US Treasury Department, Bloomberg News reported.
Late last month, Ocean Leonid told employees that the firm’s London operation will go into liquidation.
The US Treasury Department has also ratcheted up sanctions in recent months on some vessels and firms in Shamkhani’s network, while refraining from individual sanctions, according to people familiar with the matter.
And then, of course, there’s the incoming administration of Donald Trump.
The US president-elect has pledged to clamp down on the Islamic Republic’s oil exports once he returns to office next month, and he tapped Iran hawks Mike Waltz and Senator Marco Rubio for two key cabinet positions.
“Our sanctions aren’t as sweeping at they should be,” said John Bolton, who served as US National Security Advisor in the first Trump administration. “You need sweeping sanctions that say anyone trading Iranian oil is a sanctioned entity.”
Source » bloomberg