Spain’s ‘La Liga’ Soccer League Received Iranian Money Through Shell Company Set Up With Purchased Dominican Passport

Spain’s major soccer league signed a sponsorship contract with Iranian telecom company MTN Irancell. But getting money out of the sanctioned country isn’t easy. Here’s how a “citizenship-by-investment” program made it possible.

Key Findings

  • La Liga’s deal with MTN Irancell entitled it to a cut of the profits the Iranian telecom company made from Iranian fans watching Spanish soccer.
  • MTN Irancell has entities in its ownership chain linked to the defense ministry and the Revolutionary Guards.
  • Documents show an intermediary with a so-called “golden passport” from the Caribbean island nation of Dominica set up a shell company in Hong Kong.
  • This company transferred at least one payment from Iran to La Liga in an apparent bid to evade financial oversight.
  • Reporters found other unusual transactions received by the Spanish league, including some received through an ATM in Dubai.

Fernando Morientes, the former top Real Madrid striker, stood in a packed conference room in Tehran, Iran. In front of a picture of Ayatollah Khamenei, the country’s supreme leader, Morientes punted an autographed soccer ball to a cheering crowd.

It was December 2017, and Spain’s major soccer league, La Liga, had just publicly partnered with MTN Irancell, Iran’s state-owned telecoms giant. And Morientes, a brand ambassador for La Liga, was happy to lend his stardust to the proceedings.

By that point, it had been widely reported for years that MTN Irancell’s Iranian majority owner was itself owned by entities linked to the country’s defense ministry and to the Islamic Revolutionary Guard Corps (IRGC).

Dignitaries at the Tehran ceremony included Mostafa Ajorlu, an IRGC commander who has retaliated against Iranian players who backed anti-government protests.

From La Liga’s perspective, partnering with MTN Irancell offered access to a lucrative Iranian market. Contracts seen by reporters show MTN Irancell committed to pay La Liga 10 percent of any profit it earned from subscribers who watched Spanish soccer on its online channel, plus about $900,000 over roughly three years.

But because of longstanding sanctions imposed by the U.S. on Iran’s banking sector, getting money out of the country could be problematic: Even South Africa’s MTN Group, a minority shareholder in MTN Irancell, noted in its 2021 annual report that it had trouble “repatriating cash” from its Iranian partners.

In an apparent bid to get around this issue, La Liga took at least one MTN Irancell payment from a Hong Kong-based shell company that was owned by an Iranian intermediary, leaked documents seen by OCCRP show.

This intermediary had purchased a passport from Dominica, a small Caribbean country with a flourishing money-for-citizenship scheme. This passport was used to set up the front company that routed the Iranian payment to La Liga.

The U.S. government would later sanction a similar company owned by the same intermediary — and also set up with a Dominica passport — for facilitating the sale of tens of millions of dollars of Iranian petrochemicals.

🔗Passports of the Caribbean

This report is part of Dominica: Passports of the Caribbean, a collaborative cross-border investigation into Dominica’s citizenship-by-investment program. The project is a joint effort by OCCRP, the Washington D.C.-based nonprofit the Government Accountability Project, and more than a dozen media partners.

In a response to questions, a lawyer representing La Liga said the league is “unaware of any link between the contractual relationship it maintained in the past with MTN Irancell, and the creation of any companies by ‘Dominica passport holders’ to which you refer.”

The representative described the league’s relationship with MTN Irancell as a “sponsorship contract” that enabled “numerous promotions of Spanish football [to be] carried out in Iran, where there is a great love of football among its young population.”

He wrote that the deal fell under a pre-existing relationship with MTN Group in Africa, that it had ended years ago, and that “currently, there is no relationship with MTN or MTN Irancell.”

The Spanish league “complied with EU sanctions regulations in connection with the MTN Irancell contract,” he added, noting that MTN Irancell “was not, and never has been, a sanctioned entity.”

At the time the relationship began in 2017, he wrote, “the Iranian nuclear agreement signed in 2015 was in full force and effect, resulting in the lifting of international economic sanctions. Furthermore, there were no sanctions on professional sport, on the sponsorship contracts linked to the promotion of professional sport.”

🔗How is MTN Irancell Linked to Iran’s Military Complex?

MTN Irancell is a joint venture between South Africa’s MTN Group, a major telecommunications company with a 49 percent stake, and an Iranian company with a 51 percent stake. The Iranian company is owned by entities linked to the defense ministry and to the Islamic Revolutionary Guard Corps.

Though Iranian corporate ownership records are not available to verify these arrangements, they are attested to in Western and Iranian media reports, expert commentary, U.S. Treasury sanctions notices, and legal filings that stretch over many years.

According to the U.S. Treasury and legal filings brought by U.S. plaintiffs, the Iranian stakeholder in MTN Irancell is the Iran Electronic Development Company.

The same sources describe this company as a joint venture between:

  • Iran Electronic Industries (also known as Sairan), a company controlled by Iran’s defense ministry, and
  • the Mostazafan Foundation (also known as Bonyad Mostazafan).

These shareholdings are confirmed by a 2015 report from the research arm of Iran’s central bank, which lists the Mostazafan Foundation as owning 23.25 percent of MTN Irancell and the defense ministry as owning 27.75 percent (for a total Iranian shareholding of 51 percent).

In its 2020 sanctions notice for the Mostazafan Foundation, the U.S. Treasury described it as “an immense conglomerate of some 160 holdings in key sectors of Iran’s economy, including finance, energy, construction, and mining” that is “presided over by former Islamic Revolutionary Guard Corps (IRGC) official Parviz Fattah.”

“While Bonyad Mostazafan is ostensibly a charitable organization charged with providing benefits to the poor and oppressed,” the notice reads, “its holdings are expropriated from the Iranian people and are used by the Supreme Leader Ali Khamenei to enrich his office, reward his political allies, and persecute the regime’s enemies.”

In April 2019, about a year and a half after that first Tehran MTN Irancell event, the United States designated the IRGC a terror group, putting it in the company of ISIS and Boko Haram. Nevertheless, the La Liga-MTN Irancell deal was renewed several months later.

In a response to reporters’ questions, a lawyer for La Liga wrote that the deal had been renewed “taking into account that at that time the European Union, where La Liga is located, together with the rest of the signatory countries of the 2015 nuclear agreement (except for the new Trump administration in the U.S.), upheld the validity of the aforementioned nuclear agreement, stating that Iran was fully complying with its commitments.”

The Dominican Route

U.S. sanctions would have made it difficult for Iranian institutions to move money through much of the international financial system, experts said.

“You simply cannot execute any normal, conventional international transaction if it is an Iranian party on the other side,” said Mahdi Ghodsi, an economist specializing in Iran and sanctions at the Vienna Institute for International Economic Studies.

“Anything that is illegal in the U.S. is de facto illegal for the rest of the international banking system because the U.S. is the major governor of the international banking system.”

Rather than going through U.S.-dominated financial routes, MTN Irancell used intermediaries with so-called “golden passports” from Dominica to transfer at least one payment from Iran into Spain, documents show.

These men, Hossein Mohammadrezaei and Pedram Pirouzan, ran a money exchange business called Pedram Pirouzan and Partners in Damavand, a small city near Tehran. Mohammadrezaei bought into Dominica’s citizenship-by-investment program, purchasing a Dominica passport in 2017, and his partner Pirouzan also obtained a passport at an unknown date. Using these documents, they then set up apparent shell companies around the world.

One of these companies facilitated tens of millions of dollars worth of Iranian petrochemical sales to China and was sanctioned by the U.S. in 2022.

🔗Petro Plans

The Hong-Kong based ML Holding Group Ltd. was incorporated by Hossein Mohammadrezaei in September 2020. It was sanctioned last year for helping to “facilitate tens of millions of dollars’ worth of ... Iranian petrochemical sales to China,” according to the U.S. Treasury.

The company allegedly shipped crude for the Persian Gulf Petrochemical Industry Company (PGPICC), one of Iran’s biggest oil companies. PGPICC was itself sanctioned in 2019 for being owned or controlled by a company that provided financial support to an Iranian engineering firm controlled by the IRGC called Khatam al-Anbiya.

Another was used to enable a payment of 65,000 euros by MTN Irancell to La Liga.

A receipt issued by MTN Irancell and obtained by reporters shows that Pedram Pirouzan and Partners transferred the funds in either March or May of 2019 The day listed in the receipt could be read as March 5 or May 3, depending on the date format used. , around the time the IRGC was labeled a terror group by the U.S.

But though the payment was arranged by an Iranian money changing house, a wire transfer slip obtained by reporters shows that it was sent from another corner of the globe.

On March 18, it shows, La Liga received a payment for the same amount of 65,000 euros from a Hong Kong company, Lonking Industrial, which had been set up by Mohammadrezaei using his Dominica passport.

The firm — which, like many Hong Kong companies associated with Iran, had an address in the mainland Chinese city of Yiwu — sent the money to La Liga’s account at Spain’s Banco Santander from an account at China’s Huaxia bank. The bottom of the wire transfer slip includes an informational stamp written not in Chinese but in Farsi, the primary language spoken in Iran.

In response to reporters’ questions, the La Liga representative wrote that the organization had not heard of Mohammadrezaei and Pirouzan or their money transfer business.

Mohammadrezaei and Pirouzan did not respond to requests for comment. Banco Santander declined to comment. Hua Xia bank could not be reached for comment.

🔗Hong Kong Shell Games

Previous reporting by OCCRP showed how Hong Kong shell companies, controlled by individuals operating from the eastern Chinese city of Yiwu, have moved hundreds of millions for a wide range of interests, including the convicted Iranian money launderer Reza Zarrab.

Yiwu is geographically linked to Iran, housing the start of the railway that connects Iran and China, and is a major hub for Iranian commerce.

In one scheme, shell and trading companies controlled by people from the city were involved in moving $130 million for HMEA Co Ltd, a Hong Kong-based company that appeared to be part of a coordinated Iranian attempt to evade U.S. sanctions and held multiple accounts at some of the world’s biggest banks.

Although HMEA Co Ltd was run by a Swedish-Iranian businessman, he told a court that the company’s true owner was Ehsan Azarnekou, an Iranian who held a Dominican passport and used it to establish at least one company.

Reporting by OCCRP found Azarnekou had significant connections to Iranian oil interests, and also operated several money exchange businesses in Iran. Azarnekou could not be reached for comment.

Unusual Payments

OCCRP’s reporting shows that La Liga also received several other unusual payments while doing business with MTN Irancell.

Though the source of the funds cannot be established, three former La Liga employees familiar with the MTN Irancell agreement said that the transactions were part of the broadcast deal.

One route involved dropping cash into a La Liga account at an ATM in Dubai. Five receipts obtained by reporters show that a single machine was used on two different days in November 2019 to deposit a total of about $76,000 in Emirati dirham, in multiple transactions just minutes apart.

Money laundering experts consulted by OCCRP said the deposits resemble a common laundering practice called “smurfing” which is used to avoid raising attention with regulators.

“Smurfing means chopping a large amount of money into small pieces so that you stay under the limits where financial institutions such as banks or trusts are required to report them,” said Brendan Newitt, crime defense attorney with the Dutch law firm De Roos & Pen.

The La Liga representative said the league had never made use of ATM transfers, “neither directly nor indirectly.”

Other payments also raise red flags.

Over the previous several years, leaked documents show, La Liga received the equivalent of hundreds of thousands of dollars from companies based in the United Arab Emirates and Turkey. Several of these companies were liquidated shortly after making the payments. Some had no apparent connection to soccer, but appeared to be jewelry and electronics firms.

Newitt said that such activity is highly unusual for a major soccer league.

“You would think that when a party uses an offshore entity, a loan or payment is made in only one or a few transactions. Why use offshore companies, cash and checks to make smaller deposits?” added Newitt. “It could have completely legal economic reasons, but it remains highly unusual.”

In response to reporters’ questions about these transactions, the La Liga representative did not explain the use of these companies, but wrote that the league “conducted business due diligence, including sanctions screening using specialized, subscription-based databases, and did not return any sanctions alerts regarding MTN Irancell or any other related third party.”

A letter obtained by reporters shows that, in October 2019, about half-a-year after the IRGC had been designated a terror group, La Liga executives informed MTN Irancell that it had “transferred in full all its rights and obligations under the Sponsorship Agreement” to a subsidiary based in the United Arab Emirates.

All subsequent payments, the letter said, should be made there. The La Liga representative said the move was made “for commercial reasons.”

Jens Sejer Andersen is International Director at Play the Game, an initiative that promotes democracy and transparency and freedom of expression in the world of sport. Having reviewed reporters’ findings, he said:

“I think the whole matter shows how desperately European football needs financial oversight and regulation … It seems La Liga cannot have been completely unaware about how problematic it is to work with dictatorships far from Europe, but has thrown all considerations aside in the insatiable appetite for money.”

“This story should be one of many that convince European politicians to step up and start regulating an industry that, under the shield of sports autonomy … allows for all kinds of financial and political malpractices to flourish.”

Fact-checking was provided by the OCCRP Fact-Checking Desk.

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