How Iran sanctions nearly sank Phoenix woman's condo deal

A Phoenix woman's home purchase nearly was derailed after Wells Fargo froze her checking account and stopped her down payment from being delivered to an escrow account.

The reason for Wells Fargo's actions last month? U.S. trade sanctions with Iran.

Neda Tavassoli, born and raised in the United States, is among dozens of Iranian-Americans whose finances have been frozen and whose accounts recently have been closed without warning or explanation by U.S. banks in response to federal rules prohibiting financial transactions with Iran.

"It has created a pervasive sense of discrimination. ... We've seen countless cases where accounts are closed or restricted without advance warning," said Tyler Cullis, a legal fellow and policy associate for the National Iranian-American Council. "The Treasury Department is asking banks to police regulations themselves."

Regulations are confusing and contradictory, he said.

Tavassoli's trouble began in June, when her ex-husband, who is also a U.S. citizen, checked the balance of a joint Wells Fargo checking account from Iran, where he had traveled to help care for his ailing father.

That triggered a series of actions by Wells Fargo, which first froze the checking account and then last month seized several thousand dollars that Tavassoli's parents had wired to an escrow account for her down payment. Neither the escrow account nor the money from Tavassoli's parents had any connection to the frozen joint checking account.

Wells Fargo officials would not discuss the specifics of Tavassoli's case with a Call 12 for Action reporter. In e-mailed statements, Wells Fargo spokeswoman Lori Brown said the bank is required to follow regulations that restrict it from providing services within sanctioned countries.

"While our risk assessment process, results and reporting are confidential, we can assure you that neither ethnicity nor any other factors that could be considered discriminatory are included as part of that process," Brown wrote.

On Monday, after multiple inquiries from Call 12 for Action, a Wells Fargo official contacted Tavassoli and told her they were investigating the seizure of the escrow account.

"She said she was surprised. That's the word she used, and she said she would investigate," Tavasolli said of the bank's representative. "She said she had a lot of questions as to why (the frozen checking account) affected the escrow account. ... Nothing was resolved."

Seized money

Tavassoli, 37, an academic adviser at Arizona State University, said Wells Fargo seized the down payment without notice or explanation. She said she was preparing to sign closing documents when the title agent told her the wire from her parents had not been received and could not be located.

"I freaked out," Tavassoli said. "The mortgage company didn't have it, the title company didn't have it, the bank couldn't tell us anything."

The down payment had been wired from her parent's account at Bank of America to the escrow account, which the title company had set up at Wells Fargo. Tavassoli said even after Wells Fargo seized the money, officials didn't tell her what had happened. The money just seemed to vanish, she said.

It wasn't until her parents, who also are U.S. citizens, contacted Bank of America, that they discovered the money had been seized.

The condominium was the first home Tavassoli would purchase by herself, in her own name, after her divorce. But excitement turned to dismay when the down payment wasn't delivered and the closing had to be rescheduled.

Tavassoli said she spent a sleepless night. The next morning, she went to her Wells Fargo bank branch near East Cactus Road and North Tatum Boulevard. Answers weren't forthcoming. Branch officials told her she had to call the Wells Fargo executive in charge of frozen accounts in Washington, D.C.

She said the executive told her the down payment had been put on hold because of the frozen checking account, although he did not explain why.

"I cry when I get upset," she said. "But I didn't cry. I just yelled. I never felt so vilified."

Iranian heritage

Tavassoli's parents are Iranian-born. She was born in New York and grew up in Scottsdale. She said she struggled as a child to explain her background and fit in with other children.

Even as an adult, she has sought to help people understand her background. She even did an online presentation for an Ignite Phoenix event debunking myths about Iranians.

Tavassoli has a master's degree in counseling from ASU and another in public relations from Boston University.

She married Ali Jalili in 2006, and he became a U.S. citizen four years later. They opened a joint checking account in Phoenix, primarily to handle rental payments from properties Jalili owns in the Valley. Tavassoli said no overseas money was deposited into the account, and it was not used for international transactions. The only activity was from local deposits.

Tavassoli did not close the account after she and Jalili divorced in 2012. When he flew to Iran this year to be with his father, Tavassoli didn't think twice about the account until Wells Fargo notified her that it had been frozen.

"They told me it had been frozen due to sanctions," Tavassoli said. "I knew I had been 'flagged,' that's the term they used at the bank. It was because of activity from Iran, which is a sanctioned country."

Tavassoli said the account may have her name on it, but wasn't hers. She decided to let Jalili deal with the bank whenever he returned to the states.

But she said when Wells Fargo seized her down payment last month, bank officials told her she would need to close the checking account before they would release the funds to the escrow account. Tavassoli said she questioned Wells Fargo's authority to intercept the down payment.

"The banker said, 'You don't understand how banking regulations work,'" she said.

Financial sanctions

U.S. banks are prohibited from providing any financial services or allowing transactions that occur in Iran. That includes account holders accessing their accounts from Iran.

The U.S. has imposed economic sanctions against Iran and several other countries, including Cuba, Libya, North Korea, Sudan and Syria, primarily for human-rights violations and military actions.

The U.S. Treasury's Office of Foreign Assets Control enforces sanctions, which have increased significantly since the 1980s in response to Iran's nuclear-weapons program and its ongoing support for terrorist groups.

But officials at the National Iranian-American Council say some banks have overreached based on misinterpretations of the regulations, resulting in unethical and, in some cases, illegal account closures.

Cullis said Iranians and Iranian-Americans have walked into stores only to find their debit cards won't work or withdraw money from an ATM to discover their funds have been frozen.

"We've had cases where people are in a grocery store paying with a debit card and the debit card is canceled," he said.

He said Iranian students who have been granted visas by the U.S. government have received notices from banks that their accounts have been closed, leaving them without access to money for food, rent, clothes or bills.

Banks under fire

Banks across the U.S. and Canada have taken action against Iranian account holders, sparking claims of discrimination.

In 2012, Minnesota-based TCF Bank sent letters to about two dozen Iranian students at the University of Minnesota saying their accounts had been closed or were marked for closing. After discussions with university officials, the bank asked the students for more information on their accounts and the source of their funds. Later, the bank backed off its plans.

The Bank of Hawaii in February froze the accounts of 17 Iranian nationals living in the U.S., citing compliance with federal sanctions against Iran.

The bank acknowledged in a letter that account holders had valid U.S. addresses, but said it could not stop them from traveling to Iran and accessing their accounts. A month later, under pressure from National Iranian-American Council, the Bank of Hawaii reopened the accounts.

Cullis said the closures were illegal and affected innocent people based on ethnicity and nationality. He said the council worked with the bank and the State Department to come up with a clear interpretation of the regulation to avoid future issues.

In May, Bank of America initiated a similar closure of accounts based on concerns that it could not verify the U.S. addresses of its Iranian account holders.

"We are deeply concerned Bank of America is discriminating against Iranians and Iranian-Americans due to a misinterpretation of U.S. sanctions on Iran," the Iranian-American council wrote in a letter to Bank of America CEO Brian Moynihan.

Cullis said Bank of America is now sending letters to Iranian account holders requesting proof of residency before initiating closures.

"To be honest, OFAC needs to provide better guidance," he said.

Tavassoli said she doesn't believe Wells Fargo was properly following regulations when it seized her down payment. "When I tell this story, people tell me, 'You were totally profiled.' I would hope they (Wells Fargo) would do a little more investigation before they put me on some kind of watch list," Tvassoli said. "What other obstacles am I going to face? If I open another account or try to buy a house, will this happen again?"

Once Tavassoli closed the frozen checking account, Wells Fargo released the funds to the escrow account. She was able to close on her new condominium later that day.

Robert Anglen, The Republic | azcentral.com