How Hossein Shamkhani, Iran’s Oil King, Entered the Western Financial System
How Hossein Shamkhani, Iran’s Oil King, Entered the Western Financial System Bloomberg On the winding roads that stretch along the palm-covered coasts of Dominica, a chain of luxury hotels under construction can be seen. A few miles north is the future site of Portsmouth harbor, a project aimed at attracting luxury cruise ships to this island.
These projects are a testament to a decision Dominica made three decades ago regarding the Citizenship by Investment (CBI) program. In short, this small Caribbean country has offered its passports to foreigners in exchange for large sums of money. This program has injected billions of dollars into the country’s economy and provided an easy nationality to individuals whose source of wealth might raise concerns in the economic community.
Among the eager clients of this hundred-thousand-dollar program were a group of Iranians, including Hossein Shamkhani, the enigmatic leader of a business empire managing significant oil and arms deals for Tehran and Moscow. He also oversees a hedge fund operating in global financial centers.
This information was provided to Bloomberg by individuals who wished to remain anonymous for security reasons. The Dominican documents received by Shamkhani and his team were part of a series of actions that allowed Iranians to be accepted by Wall Street banks and major Western oil companies for transactions. Shamkhani, whose father is a senior advisor to the Supreme Leader of the Islamic Revolution, has made significant efforts to keep his business interests confidential.
The following report, based on interviews with over 40 people familiar with Shamkhani’s network and the result of a year-long investigation, explains how Shamkhani successfully integrated his companies into the Western financial system while key entities associated with him managed Iran’s arms attacks on Russia. The report will further detail how he managed to operate from London to Geneva, Dubai, and Singapore, maintaining relationships with some of the biggest names in the global financial world. A lawyer representing Shamkhani, who has consistently challenged Bloomberg’s reports on his business affairs, did not respond to specific questions in this report.
Malta and Cyprus, among the countries that sell their citizenship in exchange for investment, play a role in this story. Additionally, senior officials from the United Arab Emirates, a well-known lobbying firm located a few blocks from the U.S. Treasury Department in Washington, and a covert logistical network that moves billions of dollars of Iranian and Russian oil across the world’s oceans are part of these relationships. The banking challenges were Dominica’s first phase.
The banking challenges were Dominica’s first phase.
Shamkhani, born in Tehran a few years after the Iranian Revolution, grew up in the shadow of the Iran-Iraq war. His father held senior government positions at various times, including commander of the Islamic Revolutionary Guard Corps Navy and Minister of Defense, and was later appointed as the Secretary of the Supreme National Security Council of Iran.
Encouraged by his father, young Shamkhani decided to pursue an independent path in the private sector. After studying in Moscow and Beirut, he returned to Iran, obtained a master’s degree in business administration (MBA), and then, with his brother Hassan, founded the Admiral Group trading company, a nod to his father’s naval rank.
Dubai, a city across the Persian Gulf with a large Iranian expatriate population and a welcoming business approach, was recognized as a suitable base. However, given his father’s positions and his own nationality, Shamkhani was seen as a political figure with ties to sanctioned entities, which were red flags for most major banks.
Dominica, an island roughly the size of New York City and home to about 70,000 people, offered a solution. This island, which has offered one of the most flexible Citizenship by Investment (CBI) programs since the early 1990s, had earned billions of dollars from this program. Moreover, physical presence in the country is not required, and CBI transactions are usually conducted through private intermediaries in Dubai, according to Kristin Surak, a professor at the London School of Economics and Political Science and author of the book ‘Golden Passport’.
According to individuals with direct knowledge of the matter and company records observed by Bloomberg, Shamkhani and several of his associates obtained Dominican passports by paying a fee. Some of them even changed their names, a process that was entirely legal at the time and carried out through the island’s official documentation.
The red carpet alone wasn’t enough.
Many banks, to comply with basic ‘know your customer’ principles, required a secondary identification source. Their Iranian passports were clearly unsuitable. To alleviate these concerns, Shamkhani and his team used their Dominican documents to obtain additional passports from European Union member states, including Malta and Cyprus.
With multiple travel documents under pseudonyms and alternative nationalities, Shamkhani’s network was able to pass compliance checks at some of the biggest names in international finance, which otherwise might have raised concerns due to their place of birth, political status, and connections to sanctioned entities.
In addition to Shamkhani, other Iranian nationals who obtained Dominican passports included ship captain Alireza Derakhshan, known as Captain D, who closely collaborates with Milos Group Ltd, Mahdiar Zare Mojtahedi, a senior manager at Ocean Leonid Investments hedge fund, and Hossein Ghorbani-Zadeh, a senior associate at Golden Nest Group, who has assisted Shamkhani in establishing global banking relations.
Derakhshan received Dominican citizenship in 2009, according to data obtained from the Government Accountability Project. He also appears in Turkey’s commercial registry as a Dominican national. In the UK, Companies House documents show Zare and Ghorbani-Zadeh as Dominican citizens. In all three cases, there was no mention of Iran in the documents reviewed by Bloomberg.
Details regarding citizenship have become more concealed in recent years, as the Dominican government has refrained from publishing the names of foreign recipients in its official gazette, past or present. Transparency in this area ended in 2019 when opposition politicians accused Prime Minister Roosevelt Skerrit’s government, in power since 2004, of personally profiting from the sale of these passports. He has defended the program as strong and very transparent.
Some foreign banks have severed ties with Dominica to reduce their risk, according to Lennox Linton, a local lawmaker who has raised concerns about CBI. In July 2023, the UK revoked visa-free travel for those holding Dominican passports, which sounded alarm bells in the Caribbean CBI industry. Meanwhile, the European Parliament is debating ending such programs, citing reasons like fraud and poor oversight.
This program should be banned, said Sophie in ‘t Veld, who was a member of the European Parliament from the Netherlands for 20 years. It’s a red carpet to Europe.
Representatives of the governments of Dominica, Cyprus, and Malta did not respond to requests for comment, nor did Ghorbani-Zadeh. Derakhshan and Zare also declined to comment. Dominica’s program served as a launchpad for Shamkhani and his associates to turn Admiral Group into a vast multi-billion-dollar business empire with dozens of companies.
However, the second phase involved Emirati diplomats, Washington lobbyists, and Iranian agents to maintain the operation of these companies.
Iran’s oil kingpin and the secretive trade networks. The secretive trader Hector is known as the global oil kingpin of Iran.
The UK seeks to shut down a company linked to Iran’s oil network in London.
Oil prices indicate traders’ indifference to US sanctions.
Iran’s oil kingpin’s hedge fund manages millions from London.
Dubai’s DIFC financial center suspended activities of companies linked to Iran’s oil kingpin.
A covert transportation hub delivering Iranian crude to China.
US investigations into JPMorgan’s ties with Iran’s oil kingpin’s hedge fund.
Iran’s oil kingpin’s hedge fund is preparing to close its London office.
Iranian oil trader Hector plays a key role in arms sales to Russia.
Luxury Real Estate
Over the past decade, Shamkhani’s business empire has become an influential player in global commodity markets. Each year, billions of dollars of oil wealth flow through his network and disappear into a maze of offshore bank accounts and luxury real estate.
In Dubai, he could leverage his family connections for business when needed, while interacting under the alias Hector with bankers, models, and musicians in the city’s financial districts.
However, in January 2020, his business activities were jolted when the United States sanctioned his father. This event served as a wake-up call for young Shamkhani and his associates.
On one hand, his family had practically benefited from the Trump administration’s maximum pressure strategy against the Tehran regime, as this strategy placed Iran’s strategic industries more firmly under the control of politically connected elites. According to Ali Vaez, director of the Iran program at the International Crisis Group in Washington, this has led to accusations of corruption and mismanagement from some Iranians who believe the country’s oil revenues should support a broader population, especially during economic crises and fuel shortages.
Vaez said the Shamkhanis are a prime example of sanctions profiteers who have become wealthy from this situation and do not want these sanctions lifted.
At the same time, young Shamkhani did not want to face problems arising from individual sanctions or enforcement actions against his network companies.
Between 2022 and early 2024, business was going well for him.
Market disruptions following Russia’s invasion of Ukraine created an opportunity for companies like those managed by Shamkhani, which had strong government connections and a higher risk tolerance. However, these conditions also brought increased scrutiny. A coalition of governments, including the US, UK, EU, and Japan, designed a price cap policy to penalize trading companies supporting Vladimir Putin’s war machine.
The October 7, 2023, attacks on Israel and Israel’s subsequent invasion of Gaza also drew global attention to the financing of Iran’s proxy groups, with oil trading companies at the forefront, generating about $35 billion annually for the Islamic Republic. With his intertwined roots in Tehran and education in Moscow, Shamkhani held a position in both worlds. By April 2024, pressure on him had increased. The United States had sanctioned nearly a dozen ships linked to his network. Fearing further actions, he withdrew large sums from his hedge fund and invested it in luxury real estate, primarily in some of Dubai’s most exclusive island projects.
According to a Dubai real estate database compiled by the Washington-based nonprofit research organization C4ADS, at least two villas on the private Jumeirah Bay Island, locally known as Billionaires’ Island, have been purchased by members of Shamkhani’s network.
Emirati Friends
While the Biden administration increased sanctions on Iran, Shamkhani benefited from the support of the United Arab Emirates, an influential OPEC member and a long-standing defense partner of Washington in the Middle East. In private conversations with American counterparts, some Emirati officials, including influential envoy Yousef Al Otaiba in Washington, have expressed opposition to sanctions targeting Shamkhani, citing the constructive role of Shamkhani’s father in improving relations between Tehran and Abu Dhabi, which has helped reduce Houthi attacks on Emirati soil, according to individuals with direct knowledge of the matter.
Additionally, some Biden administration officials have privately acknowledged that keeping oil prices low and avoiding a trade war with China takes precedence over dealing with Iranian oil market whales like Shamkhani. Even when there is political will, policymakers acknowledge that major successes in imposing sanctions can make their job harder. Bringing down the massive companies controlled by Shamkhani would inevitably lead to the rise of dozens of smaller companies that might be even harder to control, according to informed sources.
In response to questions from Bloomberg News, an Emirati official said the country fully complies with UN sanctions and has clear and robust processes for dealing with sanctioned entities, which the government has applied to a number of companies.
Lobbying in Washington
Simultaneously, Shamkhani orchestrated and funded a campaign to be effective, hoping to avoid regulatory consequences for some of his trading companies by messaging Western officials, according to individuals with direct knowledge of the matter.
He turned to companies like Corvis, a well-known government relations firm based in Washington, to receive guidance on applying pressure on rival traders while preserving his own companies, according to individuals with direct knowledge of the matter.
The lobbyist’s Middle East office is located in Dubai’s Jebel Ali Free Zone, one of the most sanctioned jurisdictions in the world, allowing the company to closely interact with some market players involved in sensitive shipments.
Corvis’ market insights have enabled the company to hold meetings with US officials seeking fresh information from the UAE. Such discussions have the potential to influence decisions by the Office of Foreign Assets Control at the Treasury, while Corvis discloses its work on behalf of a range of clients, from the Saudi government to commodity giant Mercuria Energy Group Ltd. Its connection to Shamkhani’s network has not been disclosed under the Foreign Agents Registration Act.
Disclosure requirements for companies supporting foreign citizens are generally less stringent than those representing foreign governments, although this depends on the nature of the work. According to informed sources, Corvis has met with US Treasury officials to discuss sanctions evasion in Dubai while downplaying the role of some Shamkhani network companies.
This raises questions about how lobbying by politically connected Iranians might be concealed by not disclosing it or layering it through private companies, according to Gabriel Noronha, a former State Department official studying foreign influence. Spokespersons for the US Treasury and Justice Department declined to comment, and Corvis representatives also provided no comment.
Changing Currents There are signs that the tide is turning against Shamkhani. In recent weeks, Dubai’s International Financial Centre has suspended several companies in his network, and his hedge fund is under investigation by the US Treasury, according to Bloomberg.
Late last month, Ocean Leonid informed its staff that its London operations would enter the liquidation process.
The US Treasury has also increased its sanctions on some ships and companies within Shamkhani’s network in recent months, while refraining from imposing individual sanctions, according to informed individuals.
And, of course, there is the prospect of a future Donald Trump administration. The US president-elect has promised to completely halt the Islamic Republic’s oil exports and has chosen Mike Waltz and Senator Marco Rubio, known hardliners against Iran, for two key cabinet positions. ‘Our sanctions are not as extensive as they should be,’ said John Bolton, former US National Security Advisor in Trump’s first administration. ‘You need comprehensive sanctions that say anyone trading with Iranian oil is a sanctioned entity.’
A joint work by Jim Wyss, Erkan Erci, Jack Wittles, Yongchang Chin, and Tiwa Adebayo
