Iran’s former central bank chief gets 10-year jail term in $160 million currency fraud case

The former governor of Iran’s central bank was sentenced on Saturday to 10 years’ imprisonment for fraud, corruption and smuggling several million dollars in foreign currency.

Valiollah Seif, 69, headed the monetary authority under former President Hassan Rouhani from 2013 until he was dismissed in 2018, and is the first Iranian central bank governor to be indicted. He remains free pending an appeal.

In 2018, the US Treasury Department placed Seif under sanctions for helping transfer millions of dollars to Hezbollah.

Ahmad Araghchi, who was Seif’s deputy from 2017 to 2018, was sentenced to eight years in jail on the same charges. A third senior figure at the central bank, Rassoul Sajad, received a 13-year sentence for illegal foreign currency trading and taking bribes.

Eight others were also sentenced to prison terms, judiciary spokesman Zabihollah Khodaeian said. All of those convicted have the right to appeal.

Khodaeian said the three central bank officials were involved in violations of the currency market in 2016, a time when the Iranian rial sustained considerable losses in value against major foreign currencies. They illegally injected $160 million and €20 million into the market.

The rial exchange rate was at 39,000 to $1 in 2017 at the beginning of Araghchi’s time in office but it reached more than 110,000 to $1 by the time he was dismissed in 2018.

The change partly coincided with severe US sanctions imposed on Tehran.

The rial has tumbled from a rate of about 32,000 rials to $1 at the time of Iran’s 2015 nuclear deal with world powers to about 27,000 rials to $1 in recent months.

The currency unexpectedly rallied for some time after President Donald Trump’s decision to withdraw the US from the nuclear deal and reimpose crippling trade sanctions on Iran in 2018.

The sanctions have caused Iran’s oil exports, the country’s main source of income, to fall sharply.