A British engineer has been sanctioned along with four other family members for running a 'shadow banking network' that laundered billions of pounds for the Iranian regime, the Mail on Sunday can reveal.

Dr Farhad Zarringhalam, 44, who once worked for Nokia, was sanctioned on Monday by the Treasury, alongside his uncles and brothers, at least two of whom are also British nationals. All five of the men appeared to have lived in London in recent years.

Dr Zarringhalam, who completed a PhD on mobile cellular networks at King's College, London, said last night he will challenge the Government's decision.

The Treasury accuses the British-Iranian of being 'associated with persons who have been involved in activity which is intended to cause the destabilisation of the United Kingdom.'

His family is accused of running a shadow banking scheme for the Tehran regime through a network of money exchanges and front companies based in China and the United Arab Emirates.

The network is accused of channelling billions of pounds from Iranian oil sales in breach of US and European sanctions.

It is also accused of using the oil proceeds to pay for weapons for the Islamic Revolutionary Guards Corps (IRGC), which has led the recent war against the US and Israel and which has blockaded the Strait of Hormuz.

But last night, Dr Zarringhalam denied any wrongdoing, telling the MoS: 'Any such suggestion is a serious misunderstanding of the facts, and I intend to challenge my UK sanctions designation at the earliest opportunity.'

The Iranian-born executive, who worked for Nokia in London during his doctorate years, said that although he is not currently in Britain, some of his UK assets have been frozen by the Treasury.

Other members of the family sanctioned include Fazlolah Zarringhalam, 74, who is also a British national living in London, according to the Treasury.

Also sanctioned is Mansour Zarringhalam, 63, who appears to have lived in Finchley, North London, and has citizenship in the Caribbean tax haven of St Kitts and Nevis.

Nasser Zarringhalam, 66, who also lived in Finchley, has a St Kitts and Nevis passport as well, as does Pouria Zarringhalam, 30, who is also a British national.

Electoral roll records show Pouria lived in Finchley as well as Canary Wharf, East London, in recent years.

The British measures came a year after the US Treasury sanctioned Nasser, Mansour and Fazlolah Zarringhalam last year.

At the time, the US sanctioned 30 other individuals and entities connected to the Zarringhalams, adding that the Ayatollah regime 'leverages this network to evade sanctions and move money from its oil and petrochemical sales, which help the regime fund its nuclear and missile programmes and support its terrorist proxies.'

The UK Treasury sanctioned 12 Iranian individuals and entities on Monday, which included the GCM Exchange and the Berelian Exchange, which are two money exchanges used by the Zarringhalams to run their shadow banking operations, according to officials.

Also sanctioned was the Zindashti Network, which is accused of recruiting agents in countries like the UK to carry out terror attacks on behalf of the Iranian regime.

The sanctions came at a time when attacks against Jewish targets in Britain have risen, including arson against synagogues and private ambulance services run by Jewish charities.

It is suspected that some of the attacks have been instigated by IRGC spies hiring local criminals.

Last night, other members of the Zarringhalam family could not be reached for comment.