Stephen Flatow, a grieving father, charged that Iran financed the Gaza bus bombing that killed his 20-year-old daughter in 1995. Buried in court filings, the suit alleged that money from a charity “fronted” financial transfers to terrorists from the Iranian government. In fact, the charity, known as the Alavi Foundation, actually operated and owned a gleaming office tower on Fifth Avenue in Manhattan. In 2006, prosecutors began a complex “house of cards” investigation that ultimately led to illegal dealings with BNP Paribus, a France-based bank group. Credit Suisse and Lloyds, two of the world’s most prestigious banks, acted as Iran’s portals to the United States financial system and disguised the illicit transactions by stripping out the Iranian government bank names from wire transfers that went to the Fifth Avenue charity and affiliated entities.

Questions:

1. The analyst at the district attorney’s office, Eitan Arusy, took a keen interest in the grieving father’s accusations. Why?
2. Explain what the records showed from the Alavi Foundation and how the Iranian funds were disguised.
3. Two investigations into the “front” charity were actually going on at the same time. What two groups were looking at the Alavi Foundation?
4. What type of evidence was beneficial to understanding banking executive strategies in masterminding the illicit transaction schemes?
5. What amount of illicit transactions had actually been funneled to the Alavi Foundation?
6. Would you consider these investigations to be forensic accounting investigations? What types of “red flags” existed?

Source:
Silver-Greenberg, J. and B. Protess. (2014). A Grieving Father Pulls a Thread That Unravels BNP’s Illegal Deals. The New York Times, June 30 (Retrievable online at http://dealbook.nytimes.com/2014/06/30/a-grieving-father-pulls-a-thread-that-unravels-illegal-bank-deals/?_php=true&_type=blogs&hp&action=click&pgtype=Homepage&version=HpSumSmallMediaHigh&module=second-column-region&region=top-news&WT.nav=top-news&_r=0)