As details of the Iranian plot to blow up the Saudi Embassy in Washington, DC, becomes clearer, the US and other Western allies will look to punish Iran. One of the most powerful ways to influence Iran is through the banking sector. Through an interesting turn of events, Canada is in a position to exert significant financial leverage through one individual in particular.
One of the world's most important international bankers currently resides in Toronto. After fleeing his country of birth Mahmoud Reza Khavari served until recently as head of Iran's Bank Melli, an institution notorious for assisting in Iran's proliferation of weapons of mass destruction and financing of terrorism. Canadian authorities have yet to take action against Mr. Khavari, who represents a potential gold mine of information about how Iranian banks raise and move money around the globe.
According to Iran's semiofficial Mehr news agency, Khavari flew to Canada on September 28 after Iran issued arrest warrants for 22 top-level bankers in what appears to be the largest embezzlement scheme in the country's history.
Khavari is accused of facilitating fraudulent payments - totaling over $2.6 billion - on behalf of Bank Melli. Many of Iran's political elite, including President Mahmoud Ahmadinejad himself, have been linked to the scandal. Khavari's banking career has been nothing short of brilliant.
According to international press reports and Khavari's own resume, available online at Bank Melli's website, he has been with the bank since 2009.
Before that, he held a variety of positions, including that of chairman of Bank Sepah's board of directors from December 2003 until at least March 2005. He has also worked at Iran's Bank of Industry and Mine and served as a member on the Teheran Stock Exchange's board of directors.
Many of the companies and financial institutions Khavari has been affiliated with have been blacklisted by the United Nations and members of the international community.
BEGINNING IN 2007, the UN ordered member states to cease doing business with Bank Sepah and its affiliates under any circumstances. It later placed restrictions on two other banks, Melli and Saderat.
The EU and countries around the world followed suit, including Canada, Australia and the United States, and they have published their own list of blacklisted Iranian banks. For example, Canada has blacklisted four Iranian financial institutions, including the Melli, Mellat and Saderat banks, as well as the Export Development Bank of Iran (but not Bank Sepah, in seeming contradiction of international law).
Banks Sepah and Melli - two financial institutions where Khavari held senior posts - are particularly guilty of involvement in illicit international activity. The UN Security Council blacklisted Sepah and its subsidiaries under resolution 1747 and placed restrictions on Melli under resolution 1803.
Both financial institutions were implicated in contributing to the proliferation of sensitive nuclear activities or to the development of Iranian nuclear-weapon delivery systems.
These banks have also reportedly been involved in providing banking services in support of Iran's nuclear drive and its elite Revolutionary Guards.
Khavari's connections to Canada are noteworthy. To begin with, he and his immediate family are reportedly Canadian citizens. As recently as 2007, he purchased a CAD 2.93 million home in one of Toronto's most exclusive neighborhoods, Bridle Path. In 2001, he bought a home with his wife in Toronto's North York neighborhood, taking out a mortgage of CAD 615,000. At a certain point, Khavari also owned a Toronto-based company called Soaring Properties (it is unclear if he still owns it).
