How did Iran-linked companies manage to channel $9 billion through the US financial system in 2024, while avoiding widespread sanctions? An October 23 Financial Trend Analysis (FTA) released by FinCEN explains. FinCEN published the FTA in support of the “maximum pressure” campaign against the Iranian regime which President Trump announced in February 2025 through the National Security Presidential Memorandum-2.
How Iran’s Shadow Banking System Works
In the recent FTA, using data reported by US financial institutions, FinCEN described how Iran uses front companies, such as foreign oil companies, shipping companies, shell companies, and technology procurement companies to sell its oil, launder the money, and buy export-controlled weapons technology. Many of these companies are based in the United Arab Emirates (predominantly Dubai), Hong Kong, and Singapore.
The analysis illustrates the complex range of transactions at each stage of the shadow banking cycle and supplements a June 6, 2025 FinCEN Advisory which listed red flags for US financial institutions to use to detect oil smuggling, sanctions evasion, and money laundering by Iranian-linked companies.
Since the announcement of the maximum pressure campaign, the US Office of Foreign Asset Control (OFAC) has sanctioned numerous shipping fleets, front companies, and laundering networks linked to Iran’s shadow banking system. OFAC administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, and those engaged in threats to the national security, foreign policy, and the economy of the US.
Whistleblowers Can Report Sanctions Evasion and Money Laundering
The complex and clandestine nature of transactions made through Iran’s shadow banking system and other sanctions evasion and money laundering frauds can make it challenging for regulatory authorities to detect these violations.
Whistleblowers, particularly those with inside information about a fraud, are often an effective tool in detecting and combating sanctions evasion and money laundering. Both the FinCEN Anti-Money Laundering Whistleblower Program and the DOJ Corporate Whistleblower Award Pilot Program allow whistleblowers to confidentially report money laundering or sanctions evasion through an attorney and potentially receive a financial reward. The FTA and FinCEN Advisory demonstrate that the government views pursuing these types of violations as a priority and should serve to encourage whistleblowers with relevant information to come forward.
Phillips & Cohen has extensive experience representing whistleblowers from all over the world in sanctions evasion cases. If you believe you know of fraud involving sanctions evasion and would like to speak to an experienced whistleblower attorney, contact Phillips & Cohen for a free, confidential review of your case.
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