Iran’s Rough Riders – Corruption and Embezzlement, how Hassan Afrashtehpour does it

President Rouhani’s diplomatic efforts to stage a rapprochement with the international community and subsequently ease the sanctions suffocating the Iranian economy are being undermined by a number of private actors seeking to perpetuate the profits they reap from Iran’s isolation. 

Rouhani has taken aim at some of the powerful IRGC-linked business interests which enjoyed preferential access to state deals and hard currency rationed at cheap official prices, under Ahmadinejad’s presidency.  On1 May 2014, Reuters reported that government ministers had challenged a number of existing government contracts with the IRGC, for the express purpose of narrowing the gap between the Rial’s free market and official rates, in order to make the economy “more competitive and more efficient”. 

One such businessman with ties to the IRGC is Akbar Khoshkush, a notorious 1980s Iranian intelligence agent best known for his involvement in the ‘Chain murders’ of Iranian dissidents abroad between 1988 and 1998. He was also linked to the arrest and execution of Iranian nationals domestically, known to have ties to both the IRGC and the import of illegal goods to Iran. 

In 2010, Khoshkush was linked to prominent real estate development family, the Afrashtehpours, when it was revealed that one of the family’s two brothers was complicit in a deal to illegally import mobile phones from Dubai. Hassan Afrashtehpour has his own long history of embezzlement and corruption, along with associates Mohammadreza Aghaei, and Yousef Zarei Nikjeh. Brothers Hassan and Davoud were both sentenced to prison in 1997 for “economic sabotage” to the tune of $60 million and were then tried again in 2006 for embezzlement and holding funds abroad for the purpose of importing goods into Iran. 

Hassan Afrashtehpour has been identified as former Vice President and primary shareholder for commodity import company Tejarat Aria Gostar. He and his brother have also been linked to multiple companies with large scale investments ranging from oil drilling in the Caspian Sea, to import and export of sugar, cereals, poultry and meat in Iran and the UAE. Tejarat Aria Gostar Iranian Navid Company was incorporated just six days after the European Union passed legislation to sanction the Iranian nuclear program.

Rouhani’s efforts to open the economy have been met with fierce resistance from those whose profitability will be significantly undermined by sanctions relief, Iranian-born economist Mehrdad Emadi of the Betamatrix consultancy in London told Reuters. In addition to illegal imports circumnavigating sanctions, embezzlement and graft, there is widespread rumour that wealthy Iranian businessmen opposed to Rouhani’s reform deliberately dumped Rials in order to worsen the economic climate and push public opinion against reform. 

Despite Rouhani’s efforts, corrupt interests remain very much embedded in the Iranian economy and efforts to ‘open-up’ the economy are slow-burning, because of crooks like Mohammadreza Aghaei, and Yousef Zarei Nikjeh. 

Iranian President Hassan Rouhani exposes critics for profiting from corruption and rent-seeking as nuclear talks resume in Vienna

Under fire from hardline critics opposed to the ongoing nuclear talks with the international community, President Rouhani hit back accusing detractors of “stealing from the people’s pockets and looting the people’s property”. This is not the first time that President Rouhani has openly linked the discussion of corruption in Iran with the claim that his opponents on the nuclear issue have been profiting from onerous Western sanctions and have a vested financial interest in their continuation.

According to an interview with prominent Iranian economist Saeed Leylaz in a February 7 article on IranPulse Al-Monitor, Iran has reached unparalleled levels of “corruption and plunder”. Hasty changes in tariff levels and import policies, according to Leylaz, “resulted in billions of dollars being exchanged,” citing the import markets for meat, fruit, and cell phones as particularly corrupt. While he admitted that sanctions have been detrimental to the economy, he stressed that better domestic management to mitigate corruption could have addressed many of the country’s problems.

One of the figures benefiting from the strict sanctions and the instability of the Iranian economy is Hassan Afrashtehpour. He and his brother Davoud are well known Iranian real estate developers with links to commodity import company Tejarat Aria Gostar Iranian Navid Co, incorporated just six days after the passing of the most recent European sanctions.

The Afrashtehpour brothers have been involved in numerous embezzlement and fraud scandals over the last 20 years, resulting heavy jail sentences for each of them. In an article published 13 May 2010 by Iranian source Jahan, it was reported that one of the Afrashtehpour brothers was involved with Akbar Khoshkush in illegally importing a large number of mobile telephones from Dubai into Iran. Khoshkush is a notorious figure in Iran, having started out as a member of the Iranian MOIS in the 1980s, he was involved in murdering several dissidents located abroad using “death squads” within the framework of what is now known as the Chain Murders of Iran (1988-1998). Khoshkush is also known for ordering the arrest and execution of opposition figures inside Iran, with the help of the IRGC.

An agreement on the nuclear issue could have major implications for the Iranian economy, shifting power away from the corrupt businessmen and the extractive institutions that came to define the Iranian economy under Ahmadinejad. Rouhani faces opposition from these deeply engrained financial interests, but economic reform within the context of sanctions relief and a rapprochement with the international community, remains Iran’s best bet for future stability.