Sunday , 21 April 2024

Iranwire Exclusive: Iranians Accused of Embezzlement Seek Shelter in Canada

Iranwire – In its latest global corruption perceptions index for 2021, Transparency International ranked Iran 150th out of 180 countries for citizens’ level of trust in the integrity of state institutions. From day-to-day bribery to high-profile embezzlement scandals, corruption is perceived as endemic by many Iranian citizens, though it’s rare that the big cases become public knowledge – and even rarer that those found to be involved face the full weight of the law in Iran.

Business tycoon Jalil Sobhani was not among them but named among the alleged co-conspirators. He has a property empire in Toronto worth CA$50m

One of the most serious cases to erupt in Iran in recent years involved widespread financial malpractice at the Iran Petrochemical Commercial Company (PCC), a public-private entity set up to sell Iranian oil and gas overseas. Recently IranWire obtained, and published the most salient parts of, the sprawling verdict on the case behind closed doors last September.

According to Judge Masoudi-Magham of the Special Corruption Court, a number of the named defendants, and people initially named as co-conspirators who were not prosecuted, invested their apparent takings from the controversy in Canada. Some had also moved to that country before the time came to stand trial.

Members of the Iranian-Canadian community have reacted with consternation to the news. The Iranian-Canadian lawyer Payam Akhavan, a member of the Permanent Court of Arbitration at The Hague, told IranWire: “It is both a point of principle and a question of security.

“Money buys influence and we have to ask, as some of us have been saying for years, whether it is in Canada’s interests to allow a pariah regime to establish networks to further its agenda in our midst.  Recent events should leave no doubt about the link between corrupt oligarchs, authoritarianism, and a foreign policy that projects strength through violence.”

The below is a summary of what we know, based entirely on the 2,000-page judgment issued by an Iranian court, about the five people implicated in the PCC fraud who have put down roots in Canada. Those named are invited to provide IranWire with their responses and views and IranWire will publish them as part of the public record for readers to make up their own minds.

The Absent Defendants

Earlier this year IranWire laid out the details of the PCC scam in a series of nine reports based on the 2,000-page judgment issued by Judge Asadollah Masoudi-Magham of Branch 3 of the Special Corruption Court. Some 129 people were initially named as being suspected of involvement. But the public prosecutor’s office in Tehran allowed cases to be progressed against just 29. Of these, only 15 people were convicted, by which time several had been able to quit the country.

The charges brought against the 15 all related to illicit activities at the PCC between 2009 and 2013. Through irregular procurement and fixes involving foreign currency transactions, those involved were said to have cheated Iranian companies out of a cumulative €6.6bn they were due in payments for oil and gas.

The accused included employees of the PCC as well as operatives within the Intelligence Ministry, the General Inspection Office, the Revolutionary Guards’ Khatam-al-Anbiya Construction Headquarters and important state bodies, some of whom the judge claimed had sought – with apparent success – to influence the outcome of the trial.

Several parts of Judge Masoudi-Magham’s verdict refer to defendants who either had interests in, or by now lived in, Canada. Their presence has not gone unnoticed in that country either. In March 2018, more than 2,000 Iranian-Canadian citizens signed a petition asking the Canadian government to launch an investigation into one of the defendants, Marjan Sheikholeslami Aleagha, whose case is detailed below.

The inaction to date, they claimed, “has allowed individuals who enriched themselves through corruption and escaped justice” into Canada while “innocent Iranian Canadians have to deal with the suspicions levied against the whole community”.

Jalil Sobhani’s Nascent Canadian Property Empire

Part of the verdict in the PCC case listed the known assets and properties bought by one of the alleged co-conspirators. Jalil Sobhani is the ex-CEO of a firm known as SPEC (Supplying Petrochemical Industries Part, Equipment & Chemicals Engineering Company), one of the biggest suppliers to the petrochemical industry in Iran, and a long-time affiliate of the PCC.

Judge Masoudi-Magham states: “The defendant, Mr. Jalil Sobhani, has acquired properties worth CA$50m in Toronto and £6.5m in London. He has also spent enormous sums on properties in Los Angeles, Germany, Dubai and Turkey.

“An employee at the managerial level in either the government or private sector could never have earned enough to buy properties in so many locations outside Iran and to own several companies inside the country as well.”

The judge also named a local agent, Asghar Sadeghi, as having bought and sold overseas properties on Sobhani’s behalf, and a man named Alireza Ghaffarian as having allowed his name to be used on filings for Sobhani’s companies in Canada and Spain.

The properties bought up by Sobhani in Canada were listed as follows:

  • A property jointly purchased in Toronto for CA$2,101,000;
  • A property purchased in Toronto for $1,970,000 in the name of Jame Financial;
  • A property purchased in Toronto for $2,130,000 in the name of Jame Financial;
  • A property jointly purchased in Toronto with Alireza Ghaffarian for $757,000;
  • A property purchased in Toronto for $855,000;
  • A property purchased in Toronto by Asghar Sadeghi on behalf of Jalil Sobhani for $2,749,000;
  • A property purchased in Toronto by Asghar Sadeghi on behalf of Jalil Sobhani for $462,000;
  • A property purchased in Toronto by Asghar Sadeghi on behalf of Jalil Sobhani for $13,850,000;
  • A property purchased in Toronto by Asghar Sadeghi on behalf of Jame Financial for $462,000;
  • A property jointly purchased in Toronto with Alireza Ghaffarian for 999,000 dollars;
  • A property purchased in Toronto for $2,750,000 in the name of Elham Khajehpour Dezfuli, Jalil Sobhani’s wife;
  • A property purchased in Toronto by Jalil Sobhani for $930,000 that was then sold to Mashhad Sobhani, his daughter.

Not all the properties bought by or on behalf of the Sobhanis were listed separately in the judgment, and the exact locations and natures of the properties were not given. But the judge stated that the cumulative value was 51,018,000 Canadian dollars.

Mehdi and Mahmoud Ahmadian Named as Conduits for “Commissions”

The fifth main defendant in the years-long PCC case was a man named Mohsen Ahmadian, who was ultimately sentenced to 20 years in prison. He was involved with a firm called Dalahu Kimia Industries, an Iranian company which the judgment alleges was used to stash away and launder €2.5 million in ill-gotten gains through spurious investments.

One share in Dalahu was also given to Mohsen’s son Mehdi, who was named in the original indictment as co-conspirator, but saw the charges against him dropped in the pre-trial stage. His father, however, volunteered a large amount of information about his own sons’ alleged involvement.

The judgment states: “Mr. Mehdi Ahmadian became a member of [Dalahu’s] board. Of how he paid via his son, the defendant says: ‘My son was in Canada and I told him about it. After converting dirhams [earned by PCC activities in the UAE] to euros, he paid the money out of an account specified by [ex-Minister of Industry and alleged co-conspirator Mohammad Reza] Nematzadeh, through the company MASY. All the supporting documentation exists.’”

Another of Mohsen Ahmadian’s sons, Mahmoud, who is also thought to live in Canada, was described as having played a key role in soliciting “commissions” from the PCC’s foreign customers, again paying the money into Nematzadeh’s chosen bank accounts.

Elsewhere in the judgment, the Ahmadian brothers were also said to have secured two export contracts between Iranian petrochemical firms Nouri and Bu-Ali Sina and a company called Lancor Energy of Canada. Their father is quoted as having said that whenever the payments for exports were received by the PCC, he was given a one percent cut, deposited into a bank account in Dubai. “The name of my son Mahmoud, who is now in Canada, is also on this account,” he said, “and he can withdraw from it. He verified the deposits, which amounted to €5million in commissions.”

Marjan Sheikholeslami Aleagha, “Shell Company” Director

Marjan Sheikholeslami Aleagha was a rare female alleged colluder in the PCC fraud. But at points during the trial, at least as the judgment describes it, her case overshadowed that of many of the others.

At the time of the embezzlement from 2009 to 2013, Marjan Sheikholeslami was the CEO of two firms, Deniz Company and Hetra Tejarat Company. She was charged with “major sabotage of the [Iranian] economy” for reportedly taking some €7,065,529 ($8,710,384) in “commissions” for currency transfers involved in the sale of Iranian petrochemical products abroad. For this, she was sentenced in absentia last September to 20 years in prison.

Like others, Sheikhoeslami was not in Iran by the time the verdict was issued and most recently is understood to have emigrated from Canada to the United States.

She was alleged by Judge Masoudi-Magham to have directly colluded with Reza Hamzelou, the CEO of the PCC at the time of the embezzlement. Among her known assets, page 697 of the second half of the verdict lists two properties in Canada as follows:

  • Purchase of a building in Canada by Sheikholeslami: CA$2.1 million;
  • Purchase of a building in Canada by Sheikholeslami: CA$700,000.

Mehdi Shir-Ali, Furnished With an Apartment from PCC Gains

Mohammad Hossein Shir-Ali, a former employee of the Intelligence Ministry, was one of the 15 principal defendants in the PCC case and was eventually sentenced to six years in prison and a permanent ban from government jobs for his role as an “accessory” to the swindle. Of course, this was symbolic: Shir-Ali had managed to flee to the UAE during investigations.

Shir-Ali was said in court to have illegitimately gained $8 million during the investigated period, and to have stashed it in the British, American, Emirati and Japanese stock markets.

The name of his son Mehdi was originally listed among the co-conspirators but excised from the final list of defendants. The verdict states that Mehdi Shir-Ali “has purchased an apartment in Toronto, Canada, with the money that was gained”.

Canada: A Safe Haven?

In recent years, a number of Iranian figures accused of corruption or human rights abuses have been spotted in Canada, either permanently residing there or taking some time away from Iran. One of them was Morteza Talaei. Talaei was the commander of Tehran’s police force when the Canadian-Iranian photojournalist Zahra Kazemi was beaten to death in Evin Prison in 2003. He was photographed at a gym near Toronto in 2020, sparking online outrage.

Earlier in 2020, and also to observers’ astonishment, it became widely known that Mahmoud Reza Khavari, the former chairman of Melli Bank and one of the accused in a three trillion-toman fraud in Iran, had been living as a fugitive in Canada since 2011.

Several defendants and named individuals in the PCC case either ended up living in Canada or invested there, as the Iranian judge’s report makes plain. Long-time Iranian-Canadian citizens IranWire spoke to were near-unanimous in their concern about the fact that this had been allowed to happen.

The lawyer Kaveh Shahrooz, a senior fellow with the Macdonald-Laurier Institute in Ottawa, told IranWire: “Activists have for a long time warned that Canada has become the playground of kleptocrats from Iran and other dictatorial countries. Solid evidence for this was presented in 2011 when Mahmoud Khavari, a man wanted for large scale embezzlement, was found to be living in a posh area of Toronto. Despite pleas by activists and MPs, nothing was done by the government. 

“Since then, additional cases have emerged, pointing to a clear pattern.  This makes a mockery of Canada’s immigration system and any official Canadian claims about international justice.  And it is a potential national security concern.”

More than 10 years ago when Khavari first moved to Canada, Payam Akhavan wrote a stern op-ed warning about Canada becoming a “haven of choice” for Ahmadinejad-era officials and the Iranian elite in general. “It seems that over the past decade, the exodus from Iran has increased,” he told IranWire, “and while many are leaving in desperation, the corrupt elites too are parking their money in Canada.

“There is obviously a fear about lawlessness and abuse of power and those who are enriching themselves today want to protect their property in the future by investing in a country with stability and legal protections. It seems unfortunately that their dirty money is welcome without too many questions being asked.”

Of the five embroiled in the PCC case and others before them, he added, “One speculates that they were allowed to leave unhindered because of corruption within the judiciary, and because other powerful officials may have also been involved in this scheme. It is quite a striking contrast with political dissidents and human rights activists who are imprisoned and forbidden from leaving the country.”

Two years ago the Iranian-Canadian Congress, a nonprofit representing some of the Iranian-Canadian population, sent a letter to the country’s federal ministers of justice, public safety and national revenue voicing concerns about the activities of some of those named in the PCC judgment in Canada.

“Shortly after the publication of this letter,” the ICC told IranWire in a statement, “ICC was threatened by Jalil Sobhani to be sued if ICC continues to demand further investigation of his corruption by the Canadian Authorities.

“Later in 2021, we ran a survey among our members, asking about priorities that ICC should focus on, and investigating Iranian embezzlers and defalcators in Canada was one of the top ones.” The ICC has since obtained written responses from the country’s LiberalNDP, and Green parties on what they would do about this issue. The group added: “The governing Liberal party did not respond to the question about fugitive embezzlers.”