International Policy Digest

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World News /12 Nov 2019

Has Farhad Azima’s Luck Finally Run Out?

How does one afford a luxury yacht, a mansion, and a prime beachfront apartment on relatively meagre earnings of £71,000 per year?

It’s just one of the many questions now swirling around Farhad Azima, the mysterious Iranian-American businessman whose hacking case returns to the UK High Court this Friday. In his statement of claim, Mr. Azima claims his previously multi-million U.S. dollar annual income has been scythed down to five figures thanks to the hacking, offering an explanation as to why the businessman’s Kansas City mansion and Florida apartment are now on the market for millions of dollars.

A long-time aviation executive with rumoured ties to the United States’ Central Intelligence Agency, Mr. Azima was subject to a hack and release of his personal information sometime in 2015 or 2016. For his part, Mr. Azima – whose connections in both Iran and the United States were critical in exposing a lucrative Iranian sanctions-busting regime in 2013 (elements within the Iranian Revolutionary Guard Corps had previously detained and tortured an Azima employee in Tehran’s notorious Evin Prison following the breakdown of several deals between Azima and three Iranian businessmen at the heart of the sanctions-busting) – blames the Emirate of Ras-al-Khaimah (RAK) for the hack and filed suit against RAK in response to the Emirate pursuing him in the UK High Court for fraud in light of information disclosed in the hacked material (the fraud case is scheduled to go to trial in the High Court in late January 2020). RAK says Mr. Azima misrepresented the amount one of his businesses put into a joint venture and is currently seeking to recoup a $2.6 million settlement it paid out to Mr. Azima in 2016.

The protracted legal fights in the United Kingdom and the United States (where Mr. Azima had previously filed his hacking claim, only to see it overturned on appeal) are undoubtedly putting pressure on Azima’s finances, as evidenced by his property fire sales. The businessman has also been forced to change counsel several times in the UK and has been the subject of an ‘unless order’ by Judge Philip Kramer for his tardiness in filing key court documents. The November 14-15 hearing is expected to see RAK present evidence to rebut Azima’s claim the Emirate was behind the hack and leak, something Azima’s claim does not buttress with much in the way of fact.

Any collapse of the hacking claim would return the focus squarely on the fraud dispute between Azima and the Ras al Khaimah Investment Authority (RAKIA), the investment authority formerly run by Dr. Khater Massaad, the Azima ally currently being detained in Saudi Arabia following his arrest under an Interpol Red Notice issued after RAK successfully convicted Massaad in absentia (Massaad suddenly left RAK in 2012) for a series of fraud-related crimes.

The relatively small amount of money involved in the UK fraud action – $2.6 million – belies the effort both sides have made to resolve the matter. Both sides appear determined to prevail over the other come what may.

The trove of leaked material offers clues as to each side’s motivation. RAK estimates its losses at Massaad’s hands to be north of $1 billion following audits by PWC and KPMG, with some of Massaad’s questionable deals also involving Azima – including the joint venture now before the High Court. What’s more, Azima also put Massaad in touch with his personal attorney Kirby Behre to prepare his defense against RAK, who in turn put together a team of ex-CIA operatives and journalist Chris Cooper to discredit RAK and Neil Gerrard of the law firm Decherts LLP, who were tasked with resolving matters with Massaad.

And while the Emirate surely has $2.6 million to spare, it’s not clear that Azima does. While Azima retains (for now) his property and his luxury yacht in the south of France, it’s not clear how much income remains to fund either his legal defence or lavish lifestyle.

Indeed, the trove of leaked information catalogues decades’ worth of high-wire banking practices by Azima, involving RBS and NatWest in the United Kingdom and the American Bank & Trust Co. (AB&T) based in Tulsa, Oklahoma. It seems that every time a bank is ready to call in a loan or wrap Azima’s knuckles for a late payment, the businessman is able to wriggle off the hook. It reads like an endless tale of robbing Peter to pay Paul.

The email evidence also shows an AB&T employee named Marsha Knaust (an assistant to bank CEO Frazier ‘Frank’ Henke) warning Azima – on numerous occasions – to settle his accounts before either an upcoming bank examination or board meeting, acts which Azima at one point jokingly replies is a violation of United States law. Azima also jokes to potential AB&T clients that Henke asks few questions about his business lines in return for somewhat higher lending rates.

Meanwhile, here in the UK, Azima’s banking relationship managers at RBS and NatWest appear to be always at their wits’ end figuring out how to get their client to repay. The email records even appear to show Azima offering a bribe to RBS employee John McWilliam in return for a lending favour.

And yet, somehow, Farhad Azima always manages to stay one step ahead of his critics and accusers. The question now is whether that run of luck will continue in the UK High Court.