Credit: Svetlana Tiourina

by OCCRP and SVT

24 August 2020

By all outward appearances, Hatam Khatoun Nema was a small-time money changer working from a nondescript office in
Järfälla, a workaday Stockholm suburb.

In reality, the Swedish-Iranian businessman ran an obscure Hong Kong company, H M E A CO., LIMITED, that laundered
hundreds of millions of dollars through a web of shell companies and businesses stretching from Singapore to Panama.

A major customer of Nema’s operation was the Islamic Republic of Iran. Between 2012 and 2014, he helped move payments
for the oil that Iran sold to China, its most important trading partner and geopolitical ally.

The network allowed Chinese energy companies to hide the oil payments, which could bring U.S. scrutiny and possible
sanctions for violating restrictions on dollar-based trading with Iran.

Credit: SVTHatam Khatoun Nema in a 2013 interview.

To circumvent crippling international economic sanctions aimed at stifling its nuclear program, Iran has long engaged in
subterfuge to continue oil exports. Iran’s efforts to access the proceeds of its oil exports have pushed large swathes of its trade
and foreign exchange market underground, entrusting enormous wealth to international criminal networks.

The illicit money flows have made massive fortunes for those willing to take risks.

Reza Zarrab, a Turkish-Iranian money launderer who became infamous after his 2016 arrest in Miami, pleaded guilty to bank
fraud and money laundering in moving money for Iran. For years Zarrab rubbed shoulders with Turkey’s elite, including
President Recep Tayyip Erdoğan, and flaunted outrageous wealth and an excessive lifestyle around the world.

But while Zarrab and his wife, a famous Turkish pop star, lived in the limelight, no one noticed the likes of Nema, whose low-
key operation from a gray bungalow on the outskirts of Stockholm did much the same work for the same client.

Unlike Zarrab, Nema has faced no charges for helping Iran evade sanctions. He remains at large.

Covert Networks
OCCRP, Sweden’s Sveriges Television (SVT), the U.S. Courthouse News Service, NBC News, and other media partners spent
months examining financial records, including bank transactions from the U.S. investigation of Zarrab, of Turkey’s state-
owned Halkbank, and of the bank’s former director, Mehmet Hakan Atilla, who helped Zarrab move billions of dollars for
Iran. It’s unclear if U.S. officials were even aware of Nema’s network. Prosecutors declined comment for this story.

The records reveal multiple covert financial networks, including Hong Kong-based groups centered on Nema’s HMEA.

He incorporated the company in March 2012, less than a month after President Barack Obama signed an executive order
prohibiting U.S.-linked banks from handling most transactions involving Iran.

The pressure was meant to bring Iran to the negotiating table — and it did. In July 2015, the U.S., Iran, China, Russia, the UK,
and the European Union announced the Joint Comprehensive Plan of Action, popularly known as the Iran deal, which
envisaged an end to Iran’s nuclear activities in exchange for the lifting of economic sanctions.

But even while participating in the negotiations, China continued its dollar trade with Iran through underground networks and
proxy companies.
�Halkbank’s High-Level Allies

Following the 2016 arrest of Reza Zarrab in Miami, Turkish officials reportedly attempted to
persuade the administrations of both former U.S. President Barack Obama and current
President Donald Trump to halt federal investigations into Halkbank for its role in the
multibillion-dollar Iran sanctions busting scheme.

SHOW
Claiming only HK$10,000 (less than US$1,300) in registered capital, and with no stated business purpose, HMEA moved at
least $450 million between 2012 and 2014, the period covered by transaction records obtained by OCCRP.

The money, which flowed through accounts at seven international banks, included at least $100 million in transactions with
oil industry-related companies, and at least $130 million in transfers through obscure entities linked to criminal networks and
sanction-busting schemes.

Created by company services provider Richful Deyong International Business (China) Limited, HMEA had a prestigious
address in Lippo Centre, an iconic skyscraper in Hong Kong’s central business district.

Credit: OCCRPLippo Centre in Hong Kong’s Central District.

But at least one major bank sent account statements directly to Nema’s home in Stockholm.

Credit: OCCRPOffice of Richful Deyong International Business (China) Limited in Lippo Centre, a company services provider and registered
address of H M E A Co Ltd.
“What we’re looking at appears to have the characteristics both of money laundering and sanctions evasion,’’ said Ross S.
Delston, an attorney and anti-money laundering expert based in Washington, D.C. “It’s difficult to say without a lot more facts,
and would require an investigation by law enforcement agencies in multiple countries that might take months or years.”

Sanctions Evasion
Strangled by years of U.S. and UN sanctions, the Iranian economy was firmly in the doldrums by 2012. The country’s GDP
shrank 7.4 percent that year as a result of a slump in oil exports, a crucial source of government revenue. The Iranian rial
collapsed and has never recovered.

To beat the sanctions and move money internationally, Iran turned to various underground networks, including those run by
organized crime syndicates. Financial experts say that even the Iranian government may not know where all of its money
ended up.

“There is no singular government agency coordinating such sanction-evasion schemes,” said Ali Dadpay, a University of Dallas
associate professor of finance who studies China-Iran economic relations. “Different organizations and bodies are involved in
different types of schemes in different countries…”

�Art Shows, Tropical Fish, and Diaper Pulp

HMEA’s work wasn’t limited to money from oil.

SHOW
The two countries are now finalizing a multi-billion economic and security deal, which could reportedly see massive Chinese
infrastructure investment in exchange for discounted Iranian oil.

In many ways, the agreement would simply formalize a longstanding geopolitical alliance.

China takes advantage of Iran’s economic isolation. With little competition, the world’s largest petroleum importer is able to
buy Iranian oil at favorable prices and has filled the financial vacuum left by sanctions.

Operations like HMEA’s allow the system to work.

“While the rest of the world shunned dealing with Iran, in China entrepreneurs from the private sector were willing to offer
services to move money through China,” Dadpay said.

“Government officials in different sectors are often involved in these efforts. Some of them have been charged by personally
benefiting from opportunities offered by the opaque movement of funds,’’ Dadpay said. “But the smuggling networks
themselves are often established by small business networks, whose services are used by state actors to move money across
borders.”

In July 2013 alone, HMEA transferred at least $100 million between major Iranian and Chinese oil interests.
Credit: Edin Pašović/OCCRPHMEA moved over $100 million between Chinese and Iranian oil entities in July 2013.

This includes at least $60 million that HMEA received in a single day from China Best International (HK) Limited, a four-
month-old Hong Kong company then controlled by Chinese national Liu Qianting.

The businessman is the current CEO of Zhoushan Jinrun Petroleum Transfer Co Ltd, a company that operates bonded oil
storage terminals in China’s Zhejiang province, where cargos are not required to clear customs. Last year, Reuters reported
that Zhoushan Jinrun was offloading Iranian crude oil that had been transferred between cargo ships before entering Chinese
waters to disguise its origin.

Credit: JunRun Terminal.Oil terminals belonging to Zhoushan Jinrun Petroleum Transfer Co Ltd.

The connections lead to major players. Zhoushan Jinrun is a subsidiary of Herun Group, a private conglomerate controlled by
Yu Songbo, who in 2014 made the Forbes “China Rich List” with an estimated net worth of $1.3 billion.
Liu Qianting, Zhoushan Jinrun’s CEO, is also a shareholder in several energy and logistics firms affiliated with Herun Group.
Moreover, China Best International, the company that sent HMEA the $60 million, shares an address with a Herun Group
Hong Kong subsidiary. China Best was subsequently transferred to a new owner with no known connection to oil. Herun
Group did not respond to a request for comment.

At the other end of the oil money pipeline, HMEA made cumulative payments of at least $46 million in July 2013 to
International Oil and Design Construction Labuan Ltd., a company registered on Labuan, a Malaysian island known for tight
corporate secrecy where Iranian oil shipments destined for Asian markets are disguised.

Credit: Simplyoffshore.comLabuan, a Malaysian offshore corporate center and tax haven off the coast of Borneo.

That company’s ultimate owner, through a company registered in Kuala Lumpur, is Oil Design and Construction Corp, an
Iranian state-owned oil and gas company. Two principal directors of an ODCC subsidiary, Maziar Modarres Sadeghi and Majid
Malek, also established a Hong Kong subsidiary in March 2012, just four days after HMEA’s incorporation. Both have strong
ties to Iranian state energy and shipping interests. ODCC did not respond to a request for comment.

The Swedish Rainmaker

Despite HMEA’s immersion in global intrigue, its Swedish-based controlling shareholder, Hatam Khatoun Nema, attracted
little notice outside Sweden and Lithuania.

Records show the Baghdad-born Nema lived in a small bungalow in Järfälla, a North Stockholm suburb best known for its
large immigrant population and an outlet shopping mall. He also owns an apartment in central Dubai and has Iraqi
citizenship.
Credit: Eniro.seHatam Khatoun Nema’s modest home on the outskirts of Stockholm, where H M E A Co Ltd’s bank statements were mailed.

Nema has run more than a dozen small businesses in Sweden, Iran, Hong Kong, the United Arab Emirates (UAE), Lithuania,
and Estonia over the past 20 years, often working with siblings who live in Stockholm.

Credit: Ekobrottsmyndigheten (Swedish Economic Crime Authority).Swedish Economic Authority’s chart detailing H M E A Co Limited’s role in
Tenrent’s tax evasion scheme.
His first Swedish company, H.M Import and Export Handelsbolag, was incorporated in 2000. It provided money exchange
services for a wide range of clients, including the Iranian embassy in Stockholm. In 2006, he co-founded H.M. International
Travel AB, a major ticketing agent in Sweden for state-owned Iran Air.

Swedish tax authorities began to suspect bookkeeping irregularities at H.M. Import and Export in 2005, but Nema’s
operations escaped serious scrutiny until late 2012, when he was ensnared in a criminal investigation of a business partner, a
man named German Frank Kaur. Kaur did not respond to a request for comment.

Kaur’s Estonian construction firm, Tenrent OU, which also had operations in Sweden but was not officially registered there,
was suspected of creating a tax evasion scheme for Swedish construction companies. As part of the scheme, HMEA and other
Nema companies generated false invoices that were used to launder proceeds through Hong Kong banks.
Credit: Lithuania Prosecutor General.Translated copy of a European arrest warrant for Hatam Khatoun Nema, issued by the Prosecutor General’s
office of the Republic of Lithuania.
Swedish authorities who searched Nema’s home in November 2013 found bank statements suggesting HMEA links to Iran — a
lead they never pursued. Nema was convicted of serious accounting fraud, however, and went to prison for about 10 months.
The Swedish Economic Crimes Authority did not respond to requests for comment.

While Swedish investigators focused solely on tax evasion, authorities in Lithuania cast a wider net. In May 2013, before the
raid in Sweden, Nema had established a company called UAB Hameja in Vilnius. A few months later, Lithuanian investigators
were alerted to suspicious bank transactions involving fake shipments of Iranian pistachio nuts.
�The Pistachio Pipeline

A few weeks after it was incorporated, UAB Hameja opened an account with Siauliu Bank in
Lithuania. Over two months, the company received $1.48 million, including $1 million from
CAP Industries, a French trader of fruits and nuts.

SHOW
In December 2015, Nema was charged with money laundering, false accounting, conducting illegal business activities, and
using forged documents. Following his release from prison in Sweden, he was extradited to Lithuania in May 2018. He pleaded
not guilty, posted bail, and never went back for further questioning. Lithuania’s prosecutor general did not respond to requests
for comment.

HMEA was dissolved by September 2017, but Hong Kong company records show that in May 2018 Nema assumed
directorship of another Lippo Centre-based company, Electra Trade Co Ltd, which was incorporated in 2017 by a UAE national
of likely Iranian origin.

Nema never returned to Lithuania to face prosecution, and an EU arrest warrant was issued in 2019. His whereabouts are
unknown. Attempts to reach him for comment through his family were unsuccessful.

�On Nema’s Trail

All of Nema’s Swedish companies were liquidated between 2017 and 2019. Electra Trade Co Ltd in Hong Kong was dissolved in
2019.

SVT reporters who visited the former H.M. Import and Export office in Järfälla found it rebranded as Baradaran Exchange, an
entity not listed in Swedish public records. One of Nema’s brothers, Samer Khatoun Yaghma, was running the office.

Iranian corporate registries indicate Nema remains an active director of several companies there. Some have names similar to his
old Swedish entities, such as the HM Arian International Company.

He appears to be increasingly active in servicing Iran’s oil industry. Records show he is a vice chairman of at least two oil services
companies, including one established in 2019, and a board member of a port and oil services company based in the Anzali Free
Trade Zone on the Caspian Sea. The zone is part of a new trade corridor connecting Iran with China via Central Asia.
Credit: SVTThe
former office of H.M. Import & Export, since rebranded Baradaran Exchange. Site visits to the office found Samer
Khatoun Yaghma, Nema’s brother, in charge.

Who’s the Boss?

Credit: Company profile - Sarv Graphic Studio.Logo for Pars Petroleum Black Line Oil Co., a recently established company in Iran, in which Hatam
Nema is vice-chairman.
In addition to his own business links to Tehran, Nema has acknowledged a close partnership with a businessman with
multiple operations in Iran.

“A scheme that involves hundreds of millions of dollars is beyond the ability of one person to manage,’’ Delston said. “So there
would need to be lots of people with lots of specialties and technical skills involved.”

In a statement to a Swedish court, Nema identified HMEA’s “real owner” as his friend and business partner, Ehsan Azarnekou,
39, an Iranian who also holds citizenship in the tiny Caribbean island nation of Dominica. His LinkedIn profile indicates a
base in Iran and identifies HMEA as his principal business. Azarnekou co-founded Red Lantern, a Tehran-based trading and
banking company, in 2008. Similar to Nema’s fondness for the letters “HM” in naming his companies, Azernekou often used
the word “Lantern.”

He incorporated Red Lantern Co Ltd in Hong Kong on June 9, 2010 — the day the UN Security Council voted to crack down on
Iranian financial and shipping enterprises — at Lippo Centre, also using formation agent Richful Deyong.

Credit: LinkedIn.Ehsan Azarnekou’s Linkedin profile (here, his name is spelled “Azarnekoo”).
�The Red Lantern Network
Bank records suggest Red Lantern and HMEA were part of an extensive web of Lippo Centre-based companies that did business
with each other, but were controlled by a widely dispersed network of low-key, expatriate Iranian proxies with no clear connection
to one another. Most hold European citizenships, which invites less scrutiny from bank compliance departments. Azernekou’s
Dominica passport likely served the same purpose.
The company’s co-founders were Shahrzad Arabinarei (or Arabi for short), an Iranian residing in China, and Zhang Xiaopeng,
a Chinese national. Incorporation papers list an address for all three in a North Beijing apartment block adjacent to the
Sinopec Management Institute, a training facility for China’s largest state-owned oil refiner. Neither Deyong nor Arabinarei
responded to requests for comment.

Financial records indicate Red Lantern did business with other obscure oil-related entities even before HMEA was formed.
Credit: Hong Kong Company Registry.The Hong Kong company registry shows that 1001 Group Limited was incorporated in January 2015 by Ehsan
Azarnekou, using a passport from the Caribbean island nation of Dominica.
According to Chinese company registries, in March 2011, the Red Lantern founders established a subsidiary in the
Zhangjiagang Free Trade Zone, which is known for petrochemical imports. Azarnekou was the controlling shareholder.

Nema’s Swedish citizenship made it easy to act as Azarnekou’s proxy in creating HMEA, Swedish officials noted in court
papers, and HMEA’s Gmail account betrays their relationship: It conflates their names as “Ehsan Hatam.”

Cash was regularly transferred between their companies. Bank records show that Nema’s H.M. Import and Export paid
439,000 euros ($566,000) to Azarnekou’s Red Lantern Co Ltd, two months before HMEA’s incorporation.

Both Red Lantern entities were dissolved by August 2014, but four months later Azarnekou established 1001 Group Limited at
Lippo Centre, and in 2017 he set up the Qeshm Partners (1001 Exchange), a money exchange near Bandar Abbas, Iran’s most
important seaport.

Credit: TehranTimesQeshm Free Zone in Iran.

Like Nema, Azarnekou is a hard man to find. Both list residential addresses in Dubai and their current locations are unknown.

Underworld Connections
Illustrating the truly global reach of the criminal world’s financial networks beyond the China-Iranian oil money pipeline,
HMEA conducted transactions with entities headquartered across a wide range of jurisdictions, from Switzerland to Dubai,
which were subsequently fined or blacklisted by the U.S. for violating sanctions. HMEA also made payments to Chinese and
Indian companies accused of economic espionage and theft of trade secrets.

The true origins of the money that flowed through HMEA’s Asia-based shell companies remains unclear. However these
networks had strong and proven links to major international money laundering operations and sanctions evasion.
Credit: Edin Pašović/OCCRPHMEA moved money through financial networks linked to international money laundering and sanctions evasion.

HMEA received at least $130 million from a network of Hong Kong, Singapore, and British Virgin Islands-based shell and
trading companies.

These obscure entities moved money predominantly through bank accounts in China, Thailand and Singapore, and involved
interconnected networks of shareholders operating mainly from Yiwu City, a light manufacturing hub in eastern China.

WHAT’S A LAUNDROMAT?

Laundromats are all-purpose financial fraud networks of banks and offshore shell companies designed to move large amounts of money across
different jurisdictions. They tumble and wash together money from legal businesses, private wealth, and organized crime to obscure its origins,
avoid capital controls, bribe officials, embezzle money or evade taxes.

These same networks also moved hundreds of millions of dollars for a wide variety of interests, including companies
implicated in the Azerbaijani Laundromat and other money laundering schemes uncovered by OCCRP; on behalf of OFAC-
sanctioned entities; and on behalf of companies directly associated with admitted money launderer Reza Zarrab.

The Azerbaijani Laundromat was a complex money laundering operation involving U.K.-registered shell companies that
moved at least $2.9 billion between 2012 and 2014.

Many of the businesses were linked to high-level government officials and members of the Azerbaijani first family, and some
of the money went to EU parliamentary officials who worked in Azerbaijan’s interest.
Credit: Attunda District Court, case number B8839-13.One of many receipts showing money transferred into H M E A Co Ltd’s Standard Chartered Hong
Kong bank account from the British Virgin Islands shell company Swalk Walk Group, via ANZ Bank Singapore.
HMEA also sent at least $45 million to obscure Turkish and UAE firms that were controlled by Zarrab associates and linked to
Dubai companies in Zarrab’s money-laundering scheme: Atlantis Capital General Trading, which transferred more than $1
billion to Iranian banks, and Hanedan General Trading, which moved $250 million through U.S. bank accounts.
Credit: OCCRPInternational banks have cumulatively been fined over $20 billion since 2009 for sanctions-related violations that involved
Iranian transactions.

�Banking on a Low Profile

HMEA had accounts with at least seven Hong Kong branches of major banks.

SHOW

Tehran’s Fingerprints
Credit: Attunda District Court, case number B8839-13.Receipt of payments by H M E A Co Ltd from Vassa Impex LLP, a UK entity connected to the
“Azerbaijani Laundromat”.
According to Swedish court records, Nema acknowledged that he provided money exchange services to the Iranian embassy in
Stockholm, and that his major clients included Viewnet Enterprise AB, a Swedish safety and security company once hired by
Iran’s Ministry of Road and Transportation in Tehran to install surveillance equipment.

Neither the embassy nor Viewnet responded to requests for comment.

The Iranian government’s exact relationship with HMEA is unclear.

The timing of the company’s formation, plus the scale of transactions, suggest that HMEA was part of a coordinated response
to the increasing U.S. sanctions. Bank transaction records show that Chinese and Iranian oil companies used a number of
other underground networks besides HMEA to move oil money during this period.
After the Obama administration suspended U.S. sanctions in stages in 2016, some of Iran’s underground financial networks
went dormant. But the sanctions relief was short-lived. The Trump administration officially withdrew from the
denuclearization deal in 2018, re-imposed sanctions, and placed even tighter restrictions on Iran’s oil trade.

Last year, the U.S. blacklisted a Chinese state-owned oil trading company and its CEO for buying Iranian oil. Two tanker
operators belonging to China’s largest shipping company were also sanctioned.

The Lippo Centre-based network of companies uncovered by this investigation, as well as Red Lantern in Tehran, had all been
dissolved by February of this year.

Credit: Attunda District Court.H M E A Co Ltd’s bank statement with Standard Chartered Hong Kong.
But that doesn’t mean these networks are gone.
“It’s impossible to tell whether, on balance, sanctions evasion transactions through the global banking system have increased
or decreased in recent years,” said Jessie Liu, a former U.S. Attorney involved in the 2019 prosecution of Standard Chartered
bank for Iran sanction violations.

“On the one hand, banks are implementing more stringent know-your-customer and compliance programs,’’ she said. “On the
other, sanctions evasion schemes have become even more sophisticated, aided by the growth of virtual currencies, which are
increasingly being embraced by large banks.”

Continuing deterioration of Tehran’s relations with the West means that use of such schemes will likely increase, as will its
reliance on China.

The Financial Action Task Force, an international anti-money laundering watchdog, accused Iran of failing to counter
“terrorist financing risks” and reimposed countermeasures that effectively blacklist the country earlier this year.

�Hong Kong’s Historic Sanctions-Busting Role

Hong Kong is a popular jurisdiction for sanctions evasion schemes – particularly those involving North Korea – due to the
city’s liberal company registration laws, abundance of formation agents, access to global banking, and proximity to China.

SHOW

Reporting by Martin Young, Kelly Bloss, Šarūnas Černiauskas, Jason Papakheli, Aparna Surendra, Eric
Barrett, and Roshanak Taghavi (OCCRP) and Joachim Dyfvermark and Linda Larsson Kakuli (SVT).