Billionaire banker executed in $2.6B money laundering case and two co-defendants in Canada

By Christine Duhaime | May 24th, 2014

Billionaire money launderer executed

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.

Iranian courts found that US$2.6 billion was embezzled from the Melli Bank, Iran’s largest bank for the benefit of Khosravi and his 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.

Two accused in Canada

One of the Melli Bank directors and managers who is charged with having 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 (he’s in Toronto).

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 hostility 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 September 28, 2014, Iranian officials said Canada finally admitted that Khavari is 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.

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