The regulator's decision came after charges were filed in a U.S. court in Manhattan on March 19 saying Sadr "allegedly funneled more than $115 million of a nearly $500 million Venezuelan construction contract through the U.S. banking system for the ultimate benefit of Iranians," in violation of U.S. sanctions. Ali Sadr, an Iranian who resides in Washington DC and is the owner of Pilatus Bank in Malta, was arrested and charged in a six-count indictment that alleged he participated in a scheme to illegally funnel $115m in payments from Venezuela to Iranian individuals, in violation of US sanctions and anti-money laundering rules. A washing machine and a mock plaque commemorating the opening of Pilatus Bank by Maltese Prime Minister Joseph Muscat in 2014, which was left outside Whitehall Mansions, which houses the Maltese-registered Pilatus Bank, whose Iranian chairman Ali Sadr Hashemi Nejad was arrested in the U.S. on charges of evading U.S. sanctions and money laundering,, in Ta' Xbiex, Malta March 21, 2018. The ECB said it was not responsible for Pilatus and declined to comment when asked whether its supervisors had ever discussed the group. The court records alleged that a business owned by an Iranian conglomerate called Stratus Group, which was controlled by Sadr’s family, entered into a multi-million dollar arrangement with the Venezuelan government in 2004 in which they agreed to an infrastructure project to build thousands of homes in Venezuela. The indictment said an Iranian company that Stratus incorporated, Iranian International Housing Corporation (IIHC), entered into a US$476 million deal in 2006 with a Venezuelan-state owned energy company to build 7,000 housing units. Sadr belonged to a committee overseeing the project’s execution, prosecutors said. Sadr is alleged to have helped the Venezuelan company pay $115 million by “concealing the role of Iran and Iranian parties in U.S. dollar payments sent through the U.S. banking system,” prosecutors said. In a statement, the sons of murdered journalist Caruana Galizia - Matthew, Andrew and Paul - said: “Malta’s authorities failed to hold Ali Sadr Hashemi Nejad to account, leaving our mother to do so alone.”

They welcomed the U.S. move, saying: “Their action vindicates our mother’s work, but it has come at a terrible cost. Emanuel Delia of the Civil Society Network told a news conference outside Pilatus Bank on Wednesday: “Malta’s good name has ... been seriously tarnished across the world.”

Pilatus was in litigation with Galizia over articles she wrote accusing the bank and Ali Sadr of facilitating corrupt political activities and money laundering.
Malta imposes a freeze on Pilatus Bank. The bank's Iranian chairman Ali Sadr Hashemi Nejad was arrested and charged in the United States earlier this week, accused of breaching United States sanctions against Iran.