Five of the world’s largest banks have been drawn into allegations that they unwittingly processed payments tied to a sanctions-evasion and money-laundering scheme benefiting Iran, according to The Telegraph. 

A U.S. federal judge has ordered HSBC, Standard Chartered, JPMorgan Chase, Citibank, and Bank of New York Mellon to hand over records for inspection in a case before the federal court for the Southern District of New York, the newspaper said. The institutions have been named as the correspondent banks allegedly used by Kuveyt Turk, the Turkish branch of Kuwait Finance House, to process dollar transactions.

Court documents cited by the newspaper alleged that Kuveyt Turk used front companies to conceal Iranian links and processed a $5.7 million transaction involving the National Iranian Oil Company, which is under U.S., EU, and British sanctions, according to The Telegraph. 

The documents also alleged that Kuveyt Turk handled euro payments for equipment that may relate to nuclear weapons and ballistic missiles for two U.S.-sanctioned companies affiliated with Iran’s Islamic Revolutionary Guard Corps, The Telegraph said. The court filings referred to purchases involving fan blades and a large axial fan allegedly used in underground ballistic missile silos, and described the wider activity as a complex money-laundering scheme designed to disguise sanctioned transactions. 

The newspaper said there was no suggestion that HSBC, Standard Chartered, JPMorgan Chase, Citibank or Bank of New York Mellon knowingly engaged in sanctions evasion, and no suggestion they were involved in the euro-based transactions. 

The allegations emerged in litigation involving Delaram Zavarei, an Iranian businesswoman who says she was targeted in a politically motivated campaign by the Iranian state and whose lawyers allege that Kuwait Finance House and its subsidiaries conspired with Iranian state entities to seize millions of dollars of equipment from her oil and gas company, according to the report.

A sanctions specialist familiar with the matter told the newspaper the correspondent banks appeared to have become involved unwittingly.

“I say unwittingly because some of these banks have already been fined hundreds of millions of dollars for processing Iranian payments and certainly wouldn’t want to continue to do so,” the unnamed expert told The Telegraph. 

Read more at The Telegraph