Billionaire banker executed in $2.6B money laundering case and two co-defendants likely in Canada
According to the Washington Post, billionaire banker Mahafarid Amir Khosravi was executed today in Tehran for bank fraud and money laundering. He is alleged to have forged letters of credit with the assistance of bank managers from the Melli Bank to start a private bank called Aria Bank.
The case is the largest embezzlement prosecution in Iranian history. Iranian courts found that US$2.6 billion was embezzled from the Melli Bank, Iran’s largest bank. for the benefit of Khosravi and co-defendants.
Lawyer sentenced to death for assisting money laundering
Khosravi’s lawyer, Behdad Behzadi, was sentenced to death by an Iranian court in connection with his role in the scandal but has not yet been executed.
Two accused in Canada
One of the Melli Bank directors and managers who is alleged to have assisted Khosravi, Mahmoud Reza Khavari, was granted Canadian permanent residence. In 2005, he apparently was granted citizenship of Canada while in Iran.
In 2011, according to the Washington Post, after the arrest of several defendants in the case, Khavari bought a first class ticket and fled to Canada. He is among 22 people being sought by Iran’s chief prosecutor. In 2007, he allegedly bought a $3 million mansion close to the Bridle Path, one of Toronto’s ritzy areas.
Mr. Khavari was on Interpol’s Wanted List for charges of taking bribes and aiding and abetting embezzlement and fraud. Earlier this year, Tehran announced that it was sending a special group of law enforcement officers to Toronto to search for Khavari.
In February, 2014, the Canadian government is alleged to have informed the Iranian police that Mr. Khavari fled Canada to South America. However, two weeks ago, Iranian police subsequently announced that Canadian authorities confirmed that Mr. Khavari had not fled to South America and was still in Canada (likely in the suburbs of Toronto or West Vancouver).
According to a member of Canada’s Parliament, James Bezan, another Iranian charged in connection with the $2.6 billion Melli Bank fraud, corruption and money laundering case, Mehregan Amirkhosravi, also fled from Iran to Canada and lives in Montreal.
It is unclear how Khavari was able to buy houses and open and maintain bank accounts in Canada when he and his family were foreign politically exposed persons and Canadian economic sanctions probably prevented the transfer of any assets or money from him to Canada when he fled.
The Iranian government views the alleged lack of cooperation from Canada on the Khavari file as “one of the biggest hostilities of Canada towards Iran.”
Updates on file
On August 5, 2014, the Iranian government said that it is in talks with Canada to extradite Khavari to Iran and complained that Canada has been uncooperative on this financial crime file.
On September 28, 2014, Iranian officials said Canada finally admitted that Khavari is indeed in Canada.
On March 4, 2015, the Iranian police announced that the file had been referred to the Canadian judiciary but it is unclear what this means. It suggests that the formal extradition request of Khavari has been filed in Court but that would mean he was arrested, or sought to be arrested, in Canada. It is likely that the Iranian government simply made a request to the Canadian government, rather than through the Court system, for his removal.
If the allegations against Khavari are accurate, the Iranian government would get faster action if they: (a) indicted him for money laundering in Iran; (b) filed an action in a court for his forcible extraction from Canada on, inter alia, money laundering charges in Iran; (c) filed an injunction to freeze bank account of family members who may have proceeds of corruption from Iran and place a lien on the Bridle Path mansion; and (d) filed an action for the return of the $2.6 billion in assets allegedly taken from the Iranian state.
Canada
There is no official word on Canada’s position on this file but I can guess that they are struggling with it. On the one hand, there are strained relations between the two countries and Canada would hesitate to remove a person whom they know will face the death penalty; on the other hand, if they do not cooperate with the removal of a fugitive on a financial crime matter involving $2.6 billion in alleged money laundering, then the country’s position on anti-money laundering legal cooperation pursuant to the FATF Recommendations is impacted negatively. Moreover, there are significant immigration issues at play which dictate the expedited deportation of Khavari if the allegations are true because, if true, he entered Canada and likely obtained immigration status on the basis of at least one misrepresentation regarding source of funds and its legitimacy. Then there are banking issues at play – as noted above, Khavari was a politically exposed person who entered Canada with money that was inconsistent with his salary. And those funds were from Iran, a fact known to every bank in Canada because of his country of residence. All of these factors, if true, mean that no bank in Canada was able to open a bank account for him without violating financial crime laws in place at that time.
Source: / antimoneylaunderinglaw /