This house in Toronto’s Bridle Path neighbourhood is registered in the name of Mahmoud Reza Khavari, a top Iranian banker who resigned amidst a multi-billion dollar embezzlement scandal in Iran.
An Iranian banker who resigned and fled to Toronto amid a multi-billion dollar embezzlement scandal also has ties to a bank blacklisted by the UN Security Council, which alleges the bank has financed Iran’s nuclear missile activities.
Iranian–Canadian Mahmoud Reza Khavari is a former top official and board member at Bank Sepah, according to his resume. The Iranian bank was blacklisted by the UN in 2007 for allegedly providing support to the country’s Aerospace Industries Organization and other firms known to help spread weapons of mass destruction.
If Khavari were on American soil, he could, under that country’s domestic law, be arrested and questioned about his leadership role at the bank, according to a former U.S. Treasury Department official.
Here in Canada, the scandal–plagued banker has owned property for at least a decade and is now believed to be staying at his $3 million home in the affluent Bridle Path neighbourhood.
Bank Sepah is not named on Canada’s domestic blacklist, but Bank Melli — the state–owned financial institution Khavari was managing director of until last week — is listed as an organization that could or does contribute to Iran’s nuclear activities.
Canadian officials are not commenting on the issue.
Khavari resigned from his post at Bank Melli and fled Iran amid allegations by Iranian officials that he played a key role in what is described as the largest embezzlement in the country’s history. No charges have been laid against Khavari, but prosecutors are seeking to question him about his involvement.
Bank Sepah was blacklisted by the U.S. government in 2007 for allegedly being the “financial linchpin” of Iran’s missile procurement network. The bank’s U.S. assets were frozen and the American government made it illegal for its citizens to do business with Bank Sepah.
“Under U.S. law, doing business with Banks Sepah and Melli is akin to doing business with Osama bin Laden, or any other recognized terrorist organization,” said Avi Jorisch, a former policy adviser with the U.S. Treasury Department’s office of Terrorism and Financial Intelligence.
“If he was here in the United States, the government would have full authority to arrest Mr. Khavari for his leadership role at two financial institutions that have been blacklisted for proliferating weapons of mass destruction and facilitating terrorism,” said Jorisch, who founded the Red Cell Intelligence Group, a consulting and training firm that specializes in national security issues.
U.S. officials have said that since at least 2000, Bank Sepah had been providing a variety of critical financial services to Iran’s missile industry.
Khavari was chairman of Bank Sepah’s board of directors from December 2003 until at least March 2005 and held a variety of other roles prior to that, according to the bank’s annual reports and his resume.
Payam Akhavan, professor of law at McGill University and an expert on his native Iran, said it is a security concern when people with ties to blacklisted banks want to come to Canada.
“For several years we have expressed concerns to the government about the presence and influence of Iranian officials, many of whom like to make Canada their home,” Akhavan said.
“My fear is that this discovery is only the tip of the iceberg. Do we want Canada to become known as the investment destination of corrupt and abusive regimes like Iran?”
Khavari flew to Canada last week after resigning from his post at Bank Melli, Iran’s largest state–owned bank.
In his resignation letter, Khavari, who had been with the bank since 2009, blamed another bank as the source of the fraud and said he resigned “to respect public opinion,” according to the state-run Mehr News Agency.
A statement released by Bank Melli said Khavari would be in Canada for one day on business and was expected back in Iran last Thursday. Mehr reported that he did not arrive on his scheduled flight.
Toronto property records in Khavari’s name date back to 2001, when he took out a mortgage for a $615,000 property on Elmwood Ave., in North York, with his spouse. At one time, Khavari owned a Toronto-based company called Soaring Properties, formerly known as Soaring Travel.
A Bridle Path house on Suncrest Dr. is still registered in Khavari’s name and was bought for $2.93 million in 2007.
A man wearing a tie and jacket sat in a car parked outside the house on Wednesday, blocking the entrance to the driveway. He said Khavari was unlikely to speak about the embezzlement allegations or his involvement with Bank Sepah. The banker did not respond to repeated messages left at the house.
The Canadian government has no extradition treaty with Iran and cannot legally extradite people who are likely to face the death penalty or torture.
“If he goes back to Iran, his life will be in danger,” said Morteza Abdolalian, an Iranian-Canadian blogger and journalist who lives in Oakville.
“Whether he was involved in this great embezzlement is in question. He has to come out and speak about the situation. If he doesn’t speak out, it will remain a secret and people will point fingers at him.”