An Iranian entrepreneur is accused of carrying out an enormous fraud scheme, marking the latest controversy over allegations of large-scale corruption in the Islamic country in recent years, a report said.
Iranian media has said that the alleged embezzlement by Mohsen Pahlevan Moghadam amounted to as much as 940 trillion rials ($34.3 billion) although judiciary officials say the value is still under investigation. Pahlevan has been accused of fraud by the prosecutor of the city of Mashhad, but he denies the allegations and has yet to be charged, the Financial Times said.
Pahlevan is one of a generation of young businessmen who were rapidly promoted with the support of senior authorities under Iran’s previous government. The story of the 43-year-old, who rose from a modest background, comes after the country has been rocked by revelations of large-scale corruption by others under the government of Mahmoud Ahmadinejad, the Times said.
In 2009 Pahlevan set up Padide Shandiz Construction Co, a construction arm of his Padide Shandiz Co, which lured investors by promising huge returns on their shares in projects in Shandiz, a suburb of the holy city of Mashhad, and in the island resort of Kish, the report said.
Around 120, 000 bought the company’s stocks and banks gave Padide Shandiz loans on the basis of brochures, some unfinished construction projects and promises that investments would constantly grow, according to the Times.
Now, thousands are trying to sell their shares having heard that the company has huge debts, although a judiciary spokesman said the exact sum was under investigation, the report said.
“The art of this man was not only collecting money from people, but having many officials involved in his projects, ” said Javad Ghodousi-Karimi, a member of parliament from Mashhad, according to the Times.
The controversy follows disclosures of unprecedented corruption. Last Wednesday Mohammad-Reza Rahimi, the former first vice-president, was sentenced to more than five years in jail on charges of fraud, the report said.
Hassan Rouhani, Iran’s centrist president, has warned that the economy, which has inflation of 17 per cent and youth unemployment of 25 percent, cannot move forward if corruption is not curbed, the Times said.
Pahlevan, reportedly a former member of the Revolutionary Guards corps who was disabled during the war with Iraq in the 1980s, declined to comment. But analysts say that he could not have operated at such a scale without strong support from senior politicians. Until six years ago, he ran a small tourism business and a shish-kebab restaurant, according to the Times.
“He enjoyed the support of political and military organisations as well as religious foundations, ” said one reform-minded analyst, according to the report. “But now that 120, 000 shareholders are worried about their money, the judiciary had to intervene as public anger could become a security threat.”
In a recent interview with Etemad, a reformist daily newspaper, Pahlevan said, “When you work three times more than the others and have no day off, you grow three times more than the others.” He also claimed that “I am Iran’s best businessman”, according to the Times.
Pahlevan denies all wrongdoing and brushes off suggestions that he could face arrest or even the death penalty, which has been imposed on some businessmen convicted of charges of disrupting the national economy, the report said.