Zandian - Evidence - Part 1 - Bank Melli              With my Commentary     Jed Margolin

 

 

Summary

 

A.  In the French Court’s decision of April 3, 1998 concerning the insolvency of Computer World Zandian was ordered to personally assume Computer World’s debts of up to 20M francs.

            [Click for Details]

 

B.  Canet failed to state the names of Computer World’s creditors and the amounts owned but through our own efforts we discovered that one of Computer World’s creditors was Bank Melli and that the amount owed to Bank Melli was 19M francs. This is 95% of the judgment.

            [Click for Details]

 

C.  Bank Melli is owned and operated by the Government of Iran.

 

1.  Although most of the sanctions against Iran that were put in place by 31 CFR §560 and Executive Order 13599 have been lifted, it is still illegal to pay money to the Government of Iran and, therefore, Bank Melli (either directly or through Canet) because Bank Melli is owned by the Government of Iran. Since 95% of the judgment against Zandian is for the benefit of Bank Melli/The Government of Iran Canet’s Petition may be considered an attempt to circumvent the law and is forbidden under §560.212.

 

2.  In 1993 Zandian and his American partner Charles Reeger were arrested for trying to illegally export a high-performance IBM computer to Iran through France. Zandian somehow beat the rap but he and his companies were banned from exporting equipment for ten years. (Charles Reeger beat the rap by apparently dying.)

 

The buyer of the IBM computer was the Iran Ministry of Agriculture so the inescapable conclusion is that Bank Melli’s loan to Zandian was for the purpose of committing the illegal act of buying the high-performance IBM computer and sending it to Iran (through France).

 

While the act was probably not illegal in Iran or France, it was illegal in the U.S. In the U.S. contracts for illegal acts are not enforceable. It follows that loans to commit illegal acts are not collectible. It is a matter of Public Policy.

            [Click for Details]

 

D.   At some point the French Court must have restated the judgment in Euros but Canet has produced no evidence of this and his Petition is stated in French francs, which is no longer a legal currency. However, the judgment against Zandian was stated as 3,048,980 Euros in a document dated April 3, 2001.

 

1.  In 2002 the value of the euro (averaged over the year) was 1.071653 euros for one US Dollar ($1.00).  Therefore, in 2002, 19 Million French francs would be worth 2,896,531 euros, which would be worth  $2,702,864 US Dollars. If we subtract 2,896,542 euros (the amount claimed by Bank Melli) from 3,048,980 euros (the total amount)  we are left with 152,449 euros. At the 2002 conversion rate that would be $142,256 US Dollars.

 

2.  Canet has already collected more than the 152,449 euros from Zandian. In French Court Document 2011L00791 we learn that:

 

a.   Canet had sold a property belonging to Zandian at 23 Louis Poney Street, in Puteaux, France for 300,000 Euros;

 

b.   Zandian had also paid Canet 150,000 Euros;

 

c.  The debt to Bank Melli had not been definitely approved, at least not then in 2011.

 

Therefore, we know that as of 2011 Canet had already collected at least 450,000 euros from Zandian and that because the claim by Bank Melli/The Government of Iran had not (at least by that point in time) been definitely approved, that all of Zandian’s other creditors (whose claims had apparently been approved) should have already been paid. 

 

In addition, it appears that Zandian’s apartment at 6 Fournier Street, Paris (the address that Zandian still uses) had been sold for 1.6M francs. (If this is correct then where is Zandian living?) Therefore, Canet may have already collected as much as 2,050,000 euros from Zandian. 

 

In any event the above discussion and evidence means that all of Zandian’s remaining debt is owed to Bank Melli/The Government of Iran (assuming it has since been approved by the French Court) and that all of Canet’s fees and costs since then have been incurred in trying to collect the debt owed to Bank Melli/The Government of Iran.

            [Click for Details]

 

 

E.  The above information had to be pieced together from translations of documents from the French Court. That is because Canet/Hartman failed to disclose it to the Court and to us. Canet/Hartman’s failure to disclose this to the Court is a serious act of omission constituting inequitable conduct and should be sanctioned.

 

It is reasonable to believe that the reason Canet/Hartman failed to disclose the information is because they were aware it shows that they are conspiring to commit an act that is illegal under 31 CFR §560 and Executive Order 13599.

 

There are civil and criminal penalties for violating 31 CFR §560 and Executive Order 13599.

 

Hartman also represents Zandian. Canet, Hartman, and Zandian should be sanctioned for attempting to use USBC to violate 31 CFR §560 and Executive Order 13599.

 

            [Click for Details]

 


Details

 

A.  In the French Court’s decision of April 3, 1998 concerning the insolvency of Computer World Zandian was ordered to personally assume Computer World’s debts of up to 20M francs.

 

Following a judgement rendered by the 6th Chamber of this Court on 13 JUNE 1997, Mr. CANET, Esq.’s claim was allowed. Mr. ZANDIAN was ordered to personally assume the debts of the company up to the amount of 20,000,000 francs.

 

File: USBC Document 1, Canet Chapter 15 Petition for Recognition of a Foreign Proceeding

         usbc_doc001_Chapter_15_Petn.pdf   PDF Page 8 (Translation provided by Canet).

 

There is the matter that France officially went on the Euro in February 2002. The Bank of France stopped exchanging any and all French francs for Euros on February 17, 2012. See File: FrenchFranc.pdf .

 

The first part of the file is an article from Economy (Radio France International at http://en.rfi.fr/economy/20120216-france-says-final-farewell-franc).

 

The second part of the file is the Google translation of the notice from the Bank of France:

https://www.banque-france.fr/la-banque-de-france/communiques-et-discours-des-autorites-de-la-banque/communiques-de-presse/un-mois-pour-echanger-vos-billets-en-francs-contre-des-euros.html

 

The title is: A month to exchange your tickets francs against euro.

 

The third part of the file is the notice from the Bank of France (in French). https://www.banque-france.fr/la-banque-de-france/communiques-et-discours-des-autorites-de-la-banque/communiques-de-presse/un-mois-pour-echanger-vos-billets-en-francs-contre-des-euros.html

 

The title is: Un mois pour échanger vos billets en francs contre des euros. Google has translated billets as tickets. It should have been translated as banknotes and said:

 

“One month to exchange your banknotes in francs against euro.” (This translation is from: http://www.collinsdictionary.com/translator)

 

Even if Zandian could find 20,000,000 French francs they would have no value.

 

At some point the French Court must have restated the judgment in Euros but Canet has produced no evidence of this and his Petition is stated in French francs, which is no longer a legal currency. However. the judgment against Zandian was stated as 3,048,980 Euros in a document dated April 3, 2001. See File: frdoc004.pdf

 


 

B.  Canet failed to state the names of Zandian’s/Computer World’s creditors and the amounts owned.

 

1.  It was only through our own efforts that we discovered that Zandian’s/Computer World’s creditors are:

 

SCP CANET-MORAND

Lloyds Bank (France)

Lloyds Bank (Paris)

Bank Melli (Iran)

 

{Files: 2002L00751.pdf (French), 2002L00751_vanan.pdf (Translated), vanan-certification_122760.pdf (Vanan Certificate)}

 

There is a document in the French Court’s files dated April 3, 2001 that states the total amount of the judgment against Zandian is 3,048,980.34 Euros [3 048 980,34 EUR]. {File: frdoc004.pdf} However it does not apportion the amount among the creditors (it states 0 creditors) and does not state how much is principal and how much is accrued interest.

 

But we do know how much of the 20M francs is owed to Bank Melli. The amount is 19M francs which is 95% of the judgment. From the translation of the French Court Document 2002L00750_vanan.pdf where Zandian objected to the Judgment against him:

 

STATEMENT AND CONCLUSIONS OF THE APPLICANT TO THE OPPOSITION

 

Mr. ZANDIAN JAZY Gholam, represented by SCP HYEST & ASSOCIATES exposes in its pleadings that it is not justified that it is necessary to proceed with the ppublic {sic} auction of the property in question, in the state of the active/passive position of its liquidation,

 

It states in this regard that the MELLI IRAN Bank's debt of an alleged 19 millions francs is without basis,

 

The applicant also explains that the LLOYD'S bank must justify the deduction of interest on its established claims, calculation is likely to significantly reduce the amount of the liability to be charged,

 

He added that the debt statement of the company S.A. COMPUTER WORLD is not justified;

 

Mr. ZANDIAN JAZY Gholam sollicits the court to declare that it is not justified to sell the apartment at 23 rue Louis Pouey in PUTEAUX (92800), belonging to him, accordingly reverse the order that authorized Master CANET ex-officio to proceed with the sale;

 

{Emphasis added}

 

{Files: 2002L00750.pdf (French), 2002L00750_vanan.pdf (Translated), 2002L00750_vanan_certificate.pdf  (Vanan Certificate)}

 


 

C.   Bank Melli is owned and operated by the Government of Iran.

 

1.  Although most of the sanctions against Iran that were put in place by 31 CFR §560 and Executive Order 13599 have been lifted, it is still illegal to pay money to the Government of Iran and, therefore, Bank Melli (either directly or through Canet) because Bank Melli is owned by the Government of Iran. Since 95% of the judgment against Zandian is for the benefit of Bank Melli/The Government of Iran Canet’s Petition may be considered an attempt to circumvent the law and is forbidden under §560.212 .

 

a.   We have this statement from Bank Melli on its English version Website (under Domestic Banking): http://www.bmi.ir/En/BMIHistory.aspx?smnuid=10011

 

By continuous reliance on the popular confidence and adherence to monetary and credit policy of the country, Bank Melli Iran has emerged as a powerful arm of the government in assisting the pace of economic development.

 

See file: BankMelli_website.pdf

 

b.   As per 31 CFR §560.304 Subpart C—GENERAL DEFINITIONS:

http://www.ecfr.gov/cgi-bin/text-idx?SID=b0de8d8ebf900ce32769018e4e8110c1&mc=true&node=pt31.3.560&rgn=div5#se31.3.560_1304

§560.304   Government of Iran.

The term Government of Iran includes:

(a) The state and the Government of Iran, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Iran;

(b) Any person owned or controlled, directly or indirectly, by the foregoing;

(c) Any person to the extent that such person is, or has been, since the effective date, acting or purporting to act, directly or indirectly, for or on behalf of the foregoing; and

(d) Any other person determined by the Office of Foreign Assets Control to be included within paragraphs (a) through (c) of this section.

Note 1 to §560.304: The names of persons that the Office of Foreign Assets Control (OFAC) has determined fall within this definition are published in the Federal Register and incorporated into one of two lists maintained by OFAC. First, the names of persons identified as blocked solely pursuant to Executive Order 13599 of February 5, 2012 (“Blocking Property of the Government Iran and Iranian Financial Institutions”) (E.O. 13599) and §560.211 because they meet the definition of the term “Government of Iran” are incorporated into the “List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599”) (E.O. 13599 List). The E.O. 13599 List is accessible through the following page on OFAC's Web site: www.treasury.gov/resource-center/sanctions/Programs/Pages/13599_list.aspx. Second, the names of persons identified as blocked pursuant to E.O. 13599 and §560.211 who are also blocked pursuant to one or more other parts of this chapter are incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the identifier “[IRAN]” as well as the relevant identifier(s) for the other sanctions program(s) pursuant to which the persons' property and interests in property are blocked. The SDN List is accessible through the following page on the OFAC's Web site: www.treasury.gov/sdn. However, the property and interests in property of persons falling within the definition of the term Government of Iran are blocked pursuant to §560.211 regardless of whether the names of such persons are published in the Federal Register or incorporated into the E.O. 13599 List or the SDN List.

Note 2 to §560.304: Section 501.807 of this chapter describes the procedures to be followed by persons seeking administrative reconsideration of OFAC's determination that they fall within the definition of the term Government of Iran.

[77 FR 64666, Oct. 22, 2012, as amended at 81 FR 3331, Jan. 21, 2016]

The above section says that the E.O. 13599 List is accessible through the following page on OFAC's Web site: www.treasury.gov/resource-center/sanctions/Programs/Pages/13599_list.aspx

 

The PDF version (https://www.treasury.gov/ofac/downloads/13599/13599list.pdf) contains the entry:

 

BANK MELLI (a.k.a. BANK MELLI IRAN; a.k.a. NATIONAL BANK OF IRAN), PO Box 11365-171, Ferdowsi Avenue, Tehran, Iran; 43 Avenue Montaigne, Paris 75008, France; Room 704-6, Wheelock Hse, 20 Pedder St, Central, Hong Kong; Bank Melli Iran Bldg, 111 St 24, 929 Arasat, Baghdad, Iraq; PO Box 2643, Ruwi, Muscat 112, Oman; PO Box 2656, Liva Street, Abu Dhabi, United Arab Emirates; PO Box 248, Hamad Bin Abdulla St, Fujairah, United Arab Emirates; PO Box 1888, Clock Tower, Industrial Rd, Al Ain Club Bldg, Al Ain, Abu Dhabi, United Arab Emirates; PO Box 1894, Baniyas St, Deira, Dubai City, United Arab Emirates; PO Box 5270, Oman Street Al Nakheel, Ras Al-Khaimah, United Arab Emirates; PO Box 459, Al Borj St, Sharjah, United Arab Emirates; PO Box 3093, Ahmed Seddiqui Bldg, Khalid Bin El-Walid St, Bur-Dubai, Dubai City 3093, United Arab Emirates; PO Box 1894, Al Wasl Rd, Jumeirah, Dubai, United Arab Emirates; Postfach 112 129, Holzbruecke 2, D-20459, Hamburg, Germany; Nobel Ave. 14, Baku, Azerbaijan; Unit 1703-4, 17th Floor, Hong Kong Club Building, 3 A Chater Road Central, Hong Kong; Esteghlal St., Opposite to Otbeh Ibn Ghazvan Hall , Basrah, Iraq; Additional Sanctions Information - Not on the SDN List and Not Subject to Secondary Sanctions; U.S. Persons Must Continue to Block the Property and Interests in Property of this Person Pursuant to Executive Order 13599; For more information, please see: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf ;all offices worldwide [IRAN].

 

{Emphasis added} 

 

I have created a file with the first page of the document and the page that contains the Bank Melli entry. See File: ofac_bank-melli_13599list.pdf   Note that the entry is duplicated immediately afterwards. This is the complete file: 13599list.pdf .

 

There is an especially interesting statement at the end of the Bank Melli entry (“Person” means any of the entities named):

 

U.S. Persons Must Continue to Block the Property and Interests in Property of this Person Pursuant to Executive Order 13599; For more information, please see: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf; all offices worldwide [IRAN].

 

Since Canet’s Chapter 15 Petition is primarily for the benefit of the Government of Iran, by filing Canet’s Petition his attorney, Mr. Hartman, is violating this regulation.

 

The document in the above link is also interesting in the section:

 

A. 3. Broadly, what U.S. sanctions against Iran remain in place after Implementation Day? What activities involving Iran trigger sanctions after Implementation Day?

 

A number of U.S. sanctions authorities with respect to Iran remain in place after Implementation Day, including those set out below.

 

i. Primary U.S. Sanctions. The U.S. domestic trade embargo on Iran remains in place. Even after Implementation Day, with limited exceptions, U.S. persons4 – including U.S. companies – continue to be broadly prohibited from engaging in transactions or dealings with Iran or its government. In addition, the Government of Iran and Iranian financial institutions remain persons whose property and interests in property are blocked under Executive Order 13599 and section 560.211 of the ITSR, and U.S. persons continue to be broadly prohibited from engaging in transactions or dealings with the Government of Iran and Iranian financial institutions, with the exception of transactions that are exempt from regulation or authorized by OFAC. Unless an exemption or express OFAC authorization applies, U.S. persons continue to have an obligation to block the property and interests in property of all individuals and entities that meet the definition of the Government of Iran or an Iranian financial institution, regardless of whether or not the individual or entity has been identified by OFAC on the E.O. 13599 List (see FAQ I.2). In addition, non-U.S. persons continue to be prohibited from knowingly5 engaging in conduct that seeks to evade U.S. restrictions on transactions or dealings with Iran or that causes the export of goods or services from the United States to Iran.

 

Unless Mr. Hartman has received authorization from OFAC he is violating the regulation:

 

Unless an exemption or express OFAC authorization applies, U.S. persons continue to have an obligation to block the property and interests in property of all individuals and entities that meet the definition of the Government of Iran or an Iranian financial institution, regardless of whether or not the individual or entity has been identified by OFAC on the E.O. 13599 List (see FAQ I.2).

 

So is Canet.

 

In addition, non-U.S. persons continue to be prohibited from knowingly5 engaging in conduct that seeks to evade U.S. restrictions on transactions or dealings with Iran or that causes the export of goods or services from the United States to Iran.

 

See File: jcpoa_faqs.pdf

 

Finally, there is §560.212(a).

 

§560.212   Effect of transfers violating the provisions of this part.

(a) Any transfer after the effective date that is in violation of any provision of this part or of any regulation, order, directive, ruling, instruction, or license issued pursuant to this part, and that involves any property or interest in property blocked pursuant to §560.211, is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power, or privilege with respect to such property or property interests.

 

Note that if the Bankruptcy Trustee were to seize Zandian’s property, sell it, and send the money to Hartman to send to Canet the Bankruptcy Trustee would be in violation of 31 CFR §560 and Executive Order 13599.

 

It is also unlikely that any U.S. financial institution, after being made aware of the facts, would send Canet any money.

 

As an Article III Court the U.S. Bankruptcy Court for the District of Nevada should respect the express wishes of Congress (31 CFR §560) and the Executive Branch (Executive Order 13599) unless it finds a Constitutional reason for setting them aside.  

___________

 

2.    The money that Zandian owes to Bank Melli was to illegally send a high-performance IBM computer to the Government of Iran.

 

In 1993 Zandian and his American partner Charles Reger were arrested for trying to illegally export a high-performance IBM computer to Iran through France. Zandian somehow beat the rap but he and his companies were banned from exporting equipment for ten years. (Charles Reeger beat the rap by apparently dying.) This was criminal case #: 2:93-cr-00055-ER-1 in U.S. District Court for the Central District of California. For the Docket Report click here.

 

The buyer was the Iran Ministry of Agriculture so the inescapable conclusion is that Bank Melli’s loan to Zandian was for the purpose of committing the illegal act of buying the high-performance IBM computer and sending it to Iran (through France).

 

a.   After Zandian was arrested for illegally attempting to export a high-performance computer to Iran the LA Times reported {from http://articles.latimes.com/print/1993-01-05/local/me-967_1_export-enforcement}:

 

January 05, 1993|MICHAEL FLAGG | TIMES STAFF WRITER

 

COSTA MESA — Federal agents arrested an Orange County man and an Iranian citizen late Monday and charged them with trying to illegally export a sophisticated computer to Iran.

 

The two are Reza Zandian, 41, who gave his address to federal agents as Paris, France, and Tehran, Iran; and Charles Reeger, 57, of Huntington Beach. They were arrested by agents on a Costa Mesa side street just off the San Diego Freeway after returning from an air-freight terminal at Los Angeles International Airport.

 

The $2-million computer--an IBM ES 9000, the most powerful computer IBM makes--was seized by agents of the Commerce Department's Office of Export Enforcement at the freight terminal Monday afternoon, moments before it was to leave the country. Selling such computers--which can be used for military purposes--to Iran or other countries unfriendly to the United States is against federal law.

. . . . . . .

 

{File: LA_Times_1993_0105.pdf}

 

And from the report Ballistic, Cruise Missile, and Missile Defense Systems: Trade and Significant Developments, November 1992-April 1993 that appeared in The Nonproliferation Review/Winter 1994

(https://www.nonproliferation.org/wp-content/uploads/npr/mis12.pdf) PDF page 16 (document page 159):

 

1/5/93

Reza Zandian and Charles Reeger are arrested in San Diego by the Office of Export Enforcement for attempting to ship two IBM RISC supercomputers to Iran via France after authorities seized ES-9000 computers valued at $2 million the previous day. Zandian set up companies (Lucash Corporation and Iran Business Machines) in Irvine, California for the procurement of computers through a third company that he controlled, Computer World (or CEPAT), located in Argenteuil, France. The two men are indicted on 1/22/93.

 

Mednews, 4/19/93, p. 4 (3487).

 

{File: mis12.pdf}

 

From this we know that at least $2M was for the IBM computers that Zandian attempted to illegally export to Iran through France. No doubt Zandian would have also charged the Government of Iran a commission.

 

From the LA Times January 10, 1993:

http://articles.latimes.com/print/1993-01-10/business/fi-1698_1_big-computer

The Story Behind the O.C.-to-Iran Export Case : Probe: How U.S. agents tracked the purchase of a large computer, arresting the buyer and an aide before it could be shipped.

January 10, 1993|MICHAEL FLAGG | TIMES STAFF WRITER

Last August, Charles Reger showed up at the Export Enforcement offices and told Flashner and Special Agent in Charge Brooks Ohlson that he had applied to the Commerce Department for permission to export two computers to Iran.

Reger, 57, of Huntington Beach, managed a Costa Mesa company called Iran Business Machines for the owner, a wealthy, 41-year-old Iranian businessman named Reza Zandian, who lives in Tehran and Paris.

Through their lawyers, the two men--who have since been arrested--deny any wrongdoing. Reger's lawyer says it's a misunderstanding that's been "blown out of proportion" in a gust of publicity generated by federal agents.

The two men had already had a brush with the local export cops in 1991, according to the search warrant affidavit: They had shipped a smaller computer to Iran that year--illegally, the affidavit alleges. They told Flashner later that they didn't think they had needed an export license.

That $20,000 computer's size was "just on the threshold" of being illegal, said Ohlson. So nothing came of it. But that was when the agents began keeping an eye on Iran Business Machines.

This time, though, the big computer that Zandian's company was buying--an ES 9000--was sophisticated enough for advanced military uses. With all its accompanying equipment, it was large enough to fill a good-size conference room. "The disk drives are the size of a fridge. And there are four of them," Ohlson said.

The buyer, according to the export license Zandian's company had applied for, was the Iranian Ministry of Agriculture.

{File: la-times_1993_0110.pdf}

 

The money the Government of Iran (Bank Melli) gave to Zandian was to buy the high performance IBM computer that Zandian tried to illegally export to Iran. Zandian was caught and the computer was confiscated. Now the Government of Iran (Bank Melli) wants its money back because its criminal act failed. Canet comes to this Court with Bank Melli’s unclean hands.

 

While the act was probably not illegal in Iran or France, it was illegal in the U.S. In the U.S. contracts for illegal acts are not enforceable. It follows that loans to commit illegal acts are not collectible. It is a matter of Public Policy.

 

Therefore, the amounts assigned  to Bank Melli (and accrued interest) should be disallowed.

 

We do not know how much equipment Zandian was able to successfully (and illegally) export from the United States before he was caught.

 

We do know that Zandian and his companies were denied all export privileges from the U.S. for a period of ten years. File: FedReg_95-18696.pdf  is from: Federal Register Volume 60, Number 146 (Monday, July 31, 1995); Notices; Pages 38985-38987; https://www.gpo.gov/fdsys/pkg/FR-1995-07-31/html/95-18696.htm

 

We also know that according to Fact Sheet: Designation of Iranian Entities and Individuals for Proliferation Activities and Support for Terrorism issued 10/25/2007 by the U.S. Department of the Treasury:

Bank Melli, its branches, and subsidiaries: Bank Melli is Iran's largest bank. Bank Melli provides banking services to entities involved in Iran's nuclear and ballistic missile programs, including entities listed by the U.N. for their involvement in those programs. This includes handling transactions in recent months for Bank Sepah, Defense Industries Organization, and Shahid Hemmat Industrial Group. Following the designation of Bank Sepah under UNSCR 1747, Bank Melli took precautions not to identify Sepah in transactions. Through its role as a financial conduit, Bank Melli has facilitated numerous purchases of sensitive materials for Iran's nuclear and missile programs. In doing so, Bank Melli has provided a range of financial services on behalf of Iran's nuclear and missile industries, including opening letters of credit and maintaining accounts.

 

{Emphasis added}

 

This came from: https://www.treasury.gov/press-center/press-releases/Pages/hp644.aspx

For a mirrored copy click here.

 


 

D.   At some point the French Court must have restated the judgment in Euros. How much money are we talking about here?

 

According to this Web site: http://europe-cities.com/destinations/france/money/

            “At the time of the introduction of the euro one euro was exchanged for 6.55957 French Francs.”

 

Therefore, in 2002, 19 Million French francs would have been worth 2,896,531 euros.

 

This Web site has a file of the historical value of the euro: http://ageconsearch.umn.edu/bitstream/26228/1/dp050321.pdf

[File: dollar_euro_exchange.pdf]

 

In 2002 the value of the euro (averaged over the year) was 1.071653 euros for one US Dollar ($1.00).  Therefore, in 2002, 19 Million French francs would be worth 2,896,531 euros, which would be worth  $2,702,864 US Dollars. (I have truncated the cents.]

 

As discussed above there is a document in the French Court’s files that states the total amount of the judgment against Zandian is 3,048,980 euros [3 048 980,34 EUR]. {File: frdoc004.pdf}

 

If we subtract 2,896,542 euros (the amount claimed by Bank Melli) from 3,048,980 euros (the total amount)  we are left with 152,449 euros. At the 2002 conversion rate that would be $142,256 US Dollars.

 

2.   Zandian has already paid Canet more than 152,449 euros. In French Court Document 2011L00791 we learn that:

a.   Canet had sold a property belonging to Zandian at 23 Louis Poney Street, in Puteaux, France for 300,000 euros;

b.   Zandian had also paid Canet 150,000 euros;

c.  The debt to Bank Melli had not been definitely approved, at least not then in 2011.

 

{Files: 2011L00791.pdf (French), 2011L00791_vanan.pdf (Translated), vanan-certification_122760.pdf (Vanan Certificate)}

 

From the translated document PDF Page 5:

That this Court has known about the sale of another property belonging to Mr. Gholam ZANDIAN JAZI as part of his legal liquidation for an amount of 300 000 euros and that Mr. Gholam ZANDIAN JAZI contested in the High Court of PANTOISE the schedule of claims established on August 5, 2011 by Me CANET;

 

That the debt of the BANK MELLI IRAN in the liability of Mr. Gholam Reza ZANDIAN JAZI is not definitively approved;

 

That Mr. Gholam Reza ZANDIAN JAZI provided the amount of 150 000 000 {sic} euros on a CARPA account of the SCP HYEST AND ASSOCIATED dated on May 6, 2011;

 

There is a typo in the document translation where it says 150 000 000 euros. The original French document says 150 000 euros.

Que monsieur Gholam Reza ZANDIAN JAZI a apporte la somme de 150 000 euros sur un compte CARPA de la SCP HYEST ET ASSOCIES en date du 6 mai 2011.

 

Later, the translated document says:

 

But that the product of this first sale and the deposit of the sum of EUR 150 000 mentioned above cannot be sufficient to fully pay off the creditors, the parties agreeing to estimate the insufficiency of this residual liabilities over 300 000 euros,

 

The property that was sold is described in French Court Document 2007L01292:

By ordinance delivered on May 4, 2007, Mr. Alain ISRAEL, Commissioner Judge to the liquidation of Mr. Gholam ZANDIAN JAZI authorized Maître Patrick CANET as liquidator, to proceed before the High Court of Pontoise the public auction sale of a building; dependent to the active; representing an apartment, a cellar and a double parking. Located 23, Louis Poney Street, in Puteaux (92800), forming the Lots n° 1316, 1593 and 1738 of the co-property, of a whole cadastral section M n° 216 of 30 acres 71 centiares, M n° 218 of 97 centiares and M n° 219 of 29 centiares, the initial price was set at the amount of 45.000,00 euros, without possibility of decrease.

 

{Files: 2007L01292.pdf (French), 2007L01292_vanan.pdf (Translated), vanan-certification_122760.pdf (Vanan Certificate)} 

 

(Although the minimum price was set at 45,000 euros we saw in Document 2011L00791 that it sold for 300,000 euros.)

 

Therefore, we know that as of 2011 Canet had already collected at least 450,000 euros from Zandian and that because the claim by Bank Melli/The Government of Iran had not (at least by that point in time) been definitely approved, that all of Zandian’s other creditors (whose claims had apparently been approved) should have been paid. 

 

However, there is something odd in French Document 2011L00791.

 


1.  This was a motion filed by Zandian.

 

2.  Zandian’s apartment at 6 Fournier Street, Paris had been ordered sold.

 

3.  It was sold to Mr. and Mrs. Jerome Benhamou for 1.6M euros.

 

4.  Zandian’s legal maneuvering had prevented the Benhamous from getting possession of the apartment and they wanted compensation.

 

5.  The French Court found that:

 

THE FACTS

 

By judgment dated on April 3, 1998, a legal liquidation procedure has been opened toward Mr. Gholam Reza ZANDIAN JAZI; Me CANET was nominated as liquidator, By ordinance dated on April 8, 2011, Mr. the Commissioner Judge to the legal liquidation of Mr. Gholam Reza ZANDIAN JAZI authorized the sale by agreement of a property located at 75016 PARIS, 6 FOURNIER Street, for the benefit of Mr. and Mrs. Jerome BENHAMOU residing in Paris (75116), 22-24 Raymond POINCARE Avenue for the main price of 1 600 000 euros, Mr. Gholam Reza ZANDIAN JAZI opposed to this ordinance.

 

After giving its reasons the French Court decided:

 

FOR THESE REASONS

 

The Court after deliberation according to the law, acting publicly, by judgment deemed contradictory and in first instance. States Mr. Gholam Reza ZANDIAN JAZI unfounded in his opposition to the ordinance of the commissioner judge, dismiss him.

 

Confirms the ordinance issued on April 8, 2011 in all its provisions;

 

States Mr. and Mrs. Jerome BENHAMOU unfounded on their application for damage and interests, dismiss them.

 

States Mr. and Mrs. Jerome BENHAMOU unfounded on their application pursuant to Article 700 of the Code of Civil Procedure, dismiss them.

 

Orders the use of costs in privileged expenses of the collective proceedings;

 

The minutes of this judgement is signed by the President and by the Registrar.

 

{Files: 2011L00791.pdf (French), 2011L00791_vanan.pdf (Translated), vanan-certification_122760.pdf (Vanan Certificate)}

 

Zandian’s motion was denied.

 

It appears from this that Zandian’s apartment at 6 Fournier Street (the address that he still uses) was sold. If that is correct then Canet has collected an additional 1.6M euros from Zandian. Therefore, Canet may have already collected as much as 2,050,000 euros from Zandian. 

 

And if this is correct then where is Zandian living? Is he renting the apartment from the Benhamous? (Why would they rent the apartment to Zandian who defrauded them?)

 

 

 

E.   In any event the above discussion and evidence means that all of Zandian’s remaining debt is owed to Bank Melli/The Government of Iran (assuming it has since been approved by the French Court) and that all of Canet’s fees and costs since then have been incurred in trying to collect the debt owed to Bank Melli/The Government of Iran.

 

Thus it is reasonable to assume that if Canet is successful in seizing Zandian’s assets in Nevada all of the money will go to Bank Melli/The Government of Iran (which is illegal under U.S. law) and to Canet and Hartman for fees and costs incurred in collecting the money for Bank Melli/The Government of Iran (which is also illegal under U.S. law).

 

Canet/Hartman could say that they have intended, all along, that any money they get from seizing Zandian’s assets in Nevada would go into an escrow fund to pay U.S. creditors of the Government of Iran. But because they failed to disclose this information upfront they should not be allowed this defense. They would be saying it only because they were caught.

 

The above numbers might be off by a little. The above information had to be pieced together from translations of documents from the French Court. That is because Canet/Hartmant failed to disclose it to the Court and to us.

 

It is reasonable to believe that the reason they failed to disclose the information is because they were aware it shows that they are conspiring to commit an act that is illegal under 31 CFR §560 and Executive Order 13599.

 

There are civil and criminal penalties for violating 31 CFR §560 and Executive Order 13599.

 

31 CFR 560.701 - Penalties.

 

§ 560.701 Penalties.

 

Link to an amendment published at 81 FR 43076, July 1, 2016.

 

(a) Attention is directed to section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) (“IEEPA”), which is applicable to violations of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under IEEPA.

 

(1) A civil penalty not to exceed the amount set forth in section 206 of IEEPA may be imposed on any person who violates, attempts to violate, conspires to violate, or causes a violation of any license, order, regulation, or prohibition issued under IEEPA.

 

 

Note to paragraph (a)(1) of § 560.701:

 

As of the date of publication in the Federal Register of the final rule amending and reissuing this part (October 22, 2012), IEEPA provides for a maximum civil penalty not to exceed the greater of $250,000 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.

 

(2) A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of a violation of any license, order, regulation, or prohibition may, upon conviction, be fined not more than $1,000,000, or if a natural person, be imprisoned for not more than 20 years, or both.

.....

 

The amendment referenced to the Federal Register (81 FR 43076) July 1, 2016, states:

 

§ 561.701 Penalties.

 

(a) * * *

 

Note to paragraph (a): As of August 1, 2016, the applicable maximum civil penalty per violation of IEEPA is the greater of $284,582 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.

 

Apparently the penalties are indexed to the rate of inflation.

 

 

Canet should be sanctioned for attempting to use USBC to commit this crime.

 

Hartman should also be sanctioned. He cannot claim ignorance because:

 

1.  Ignorance of the law is no excuse, especially for an attorney.

 

2.  Hartman also represents Zandian in this case.  See the list of attorneys for this case from Pacer.{File: hartman-zandian.pdf}

 

There is a good summary of Zandian’s bad faith in our Motion to Void Deeds in the First Judicial District Court of Nevada. It was discussed in our OBJECTION TO PETITION FOR RECOGNITION AND CHAPTER 15 RELIEF (USBC Document 13). A shorter summary was presented at the June 23, 2016 hearing in USBC. Zandian’s bad faith includes an attempt to bribe my attorney Adam McMillen. {Files: 2016_0503_MoTV-McMillen_decl.pdf and 2016_0503_MoTV-Zandian-Bribe.pdf}

 

At the very least Hartman, knowing that he had agreed to represent such a disreputable person, should have been alert to the possibility that he was being used to commit nefarious acts.

 

However, Hartman’s lack of cooperation in providing us with the material we requested shows an awareness that he was involved with something shady. He might have known that he had been duped into committing a crime and was trying to finesse his way out of it.

 

Further, there is In Re Parokh, 508 B.R. 572 (2014).

 

From the American Bankruptcy Institure (http://www.abi.org/member-resources/blog/bankruptcy-attorneys-potentially-face-sanctions-for-failure-to-reasonably#_ednref)

 

Recently, in In re Parikh,[i] a bankruptcy court imposed sanctions pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure against a debtor’s attorney who signed a chapter 7 petition that contained incomplete and incorrect information that was clearly refuted by the debtor’s previous chapter 13 petition.

 

and

 

Rule 9011(b)(3) provides that by signing a bankruptcy petition, an attorney certifies “to the best of [his] knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.”[xvii]  While the attorney’s investigation does not have to be to the point of certainty, he “must explore readily available avenues of factual inquiry.”[xviii]  The attorney must also independently verify publicly available information to ensure the client representations are objectively reasonable and consistent.[xix]  If the attorney fails to live up to this duty, courts must exercise discretion to determine which sanction is appropriate.[xx]  Possible sanctions range from an award of attorney's fees, to reprimand or even disbarment.[xxi]  Generally, courts should award the minimum sanction necessary to deter future sanctionable conduct.[xxii]  However, courts may also consider factors including the reasonableness of costs and expenses incurred by the party seeking sanctions, prejudice suffered by the party seeking sanctions, the relative culpability of client and counsel, the degree to which the party seeking sanctions caused the expenses for which recovery is sought, whether the sanctionable conduct was a conscious disregard of duty, and the general reputation of the individual to be sanctioned.[xxiii]

 

For Rule 9011 see https://www.law.cornell.edu/rules/frbp/rule_9011 . For a mirrored copy click here.

 

Canet, Hartman, and Zandian should all be sanctioned for their conspiracy to use USBC to violate 31 CFR §560 and Executive Order 13599.

 

1.  Canet, Hartman, and Zandian should be sanctioned by being required to jointly and severally pay my reasonable attorneys fees and costs incurred as a result of their conspiracy. Because this was a criminal conspiracy the amount should be trebled because of the damage his delay has caused me and to serve as a warning to other bankruptcy attorneys.

2.  Canet’s Petition should be dismissed with prejudice.

3.  Zandian should be barred from filing any additional petitions with USBC for a period of ten years.

4.  The Court should send its findings to DOJ for prosecution.

 

 

Jed Margolin

Virginia City Highlands, Nevada

November 18, 2016

 

(Revised 1/7/2017 to include Rule 9011.)

 

.end