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World News /07 Nov 2019
11.07.19

The Lost Yachting Weekend at the Heart of the Azima-RAK Fraud Case

An August 2013 long weekend aboard a luxury yacht off the south of France appears to be at the heart of a fraud case winding its way through a UK High Court.

On the weekend of August 23-25, 2013, the Conquistador II was overflowing with champagne and stocked with wealthy businessmen. One visitor, however, didn’t fit the mould: He was Jay Solomon, a foreign correspondent for the Wall Street Journal. Solomon was dipping into the glitzy surroundings in search of news, something the yacht’s owner – a secretive Iranian-American aviation executive named Farhad Azima – had been able to provide in the past.

In fact, Solomon and Azima had collaborated earlier that summer on a blockbuster report that would eventually lead to the United States government’s sanctioning of three Iranian businessmen – Houshang Hosseinpour, Pourya Nayebi, and Houshang Farsoudeh –integral to the Iranian Revolutionary Guard’s sanctions-evading activities in Georgia. It was the latest reporting feather in Solomon’s cap and he was clearly hungry for more.

Emails found in a leak of Azima’s personal information show the businessman lured Solomon to his yacht with the promise of yet another cracking story, this time involving the Emirate of Ras-al-Khaimah (RAK). Azima at the time had extensive business dealings with RAK, the majority of them via Dr. Khater Massaad, a former head of RAKIA, the Emirate’s investment vehicle. What’s more, some of Azima and Massaad’s deals – including one to acquire a Sheraton hotel in Georgia – also involved the three Iranians (whom Azima referred to as the ‘Three Amigos’). And so it was no surprise that Azima invited Massaad to be present on the Conquistador that weekend to meet Solomon.

“I’m trying to sell this trip to France as a work trip,” Solomon wrote to Azima in an email a few weeks ahead of his Conquistador visit. “Basically, I’ve told my editors that I can do a similar story about Ras al-Khaima as I did about Georgia. I’m just trying to make sure I’m not overselling. I can’t tell if Dr. Massad [sic] has the same type of documents as those we gathered on the Three Amigos?” The following week Massaad’s assistant booked Solomon’s travel to the south of France (it appears Massaad also paid for the trip).

It’s not the kind of weekend that escapes a memory. And yet it appears to have completely escaped Solomon’s, despite the devastating impact Azima would go on to have on Solomon’s life and career. Solomon would eventually be fired from the Wall Street Journal over his relationship with Azima (which included talk of a potential business deal). The sacking prompted Solomon to eventually write a long mea culpa in the Columbia Journalism Review about his sourcing relationship with Azima, whose businesses are rumoured to have had ties to the 1980’s Iran-Contra Affair. But nowhere in Solomon’s 6,200-word explanation is there mention of the 2013 meeting with Azima and Massaad. In the CJR piece, Solomon inexplicably sources his first Conquistador visit to 2014, not 2013.

The August 2013 Conquistador weekend would also shift the fortunes of Massaad and Azima. According to the leaked material, the two men finally executed a Joint Venture Agreement over the weekend that had originally been agreed in 2007 between Ras-al-Khaimah and HeavyLift International – an Azima company – to provide a training academy for pilots in RAK. There was just one problem: Massaad was no longer a RAKIA employee by August 2013, having departed Ras-al-Khaimah in mid-2012 after the Emirate found evidence of a massive fraud at RAKIA under Massaad’s watch (he was later convicted in absentia by RAK and detained by Saudi Arabia following the issuance of an Interpol Red Notice). Massaad simply had no authority to execute the deal at the time he signed it. What’s more, it appears Massaad was executing the agreement to help Azima recoup money from the Emirate.

It is the fallout from the two men’s efforts that is now before a UK High Court. The Emirate is looking to reclaim money it paid to Azima in a settlement as part of the winding down of the joint venture, something the Emirate is now arguing Azima negotiated in bad faith. For his part, Azima is blaming the Emirate for the hack of his personal information and is pursuing RAK for his business losses incurred after the August 2016 leak.

In court documents, Azima claims the leak reduced his earnings to $71,000 (all figures USD) in 2017, down from a figure of $5.9 million in 2015. The lack of funds could explain why Azima earlier this year sold his beloved Concorde nose cone for $300,000. Also for sale? Azima’s $4 million mansion in Kansas City.

One thing Azima hasn’t sold, however, is the Conquistador. Despite attempting to flog the yacht to the three sanctioned Iranians in autumn 2011, Azima retains possession of his floating palace. It must remind him of a better time, when the champagne flowed and the deals were easy.

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