Bank Melli ex-Chairman in Toronto

Mahmoud Reza Khavari, the former chairman of the board and managing director of Iran’s largest bank, the state-owned Bank Melli, has reportedly fled Iran and arrived in Toronto, where he owns a home. Bank Melli was one of the banks involved in a massive embezzlement scandal. Khavari resigned his post on Tuesday. It is not uncommon for the Islamic Republic’s elite to have dual citizenship or close relatives living in the West.

Bank Sedarat and Bank Saman are also implicated in the $2.6 billion fraud, biggest in the country’s history, and their chairmen were removed from their posts.

Toronto’s The Globe and Mail has published a picture of Mr. Khavari’s home in the city's affluent Bridle Path neighborhood and reports that the property is valued at $3 million.

Khavari's Home in Toronto. Photo: J.P. Moczulski /The Globe and Mail. 30 September 2011

Growing Banking Scandal in Iran

Amidst the largest and growing banking scandal in Iranian history, the president of Bank Melli, the country’s largest state-owned bank, resigned today and the presidents of two large privately-held banks, Bank Saderat and Bank Saman, are forced to resign by the Central Bank of Iran. The three banks are accused of issuing letters of credit in a scam, which amounted to $2.6 billion embezzlement.

Earlier in the day, Iran's Prosecutor General Hojjatoleslam Gholam-Hossein Mohseni-Ejei said 22 arrest warrants have been issued in connection with the bank fraud. He did not say how many of those people have actually been arrested.

In total, seven state-owned and private Iranian banks are said to be involved in the case, which allegedly involved forging documents to secure multi-billion-dollar loans and purchase state-owned companies.

Easing Banking Restrictions

Reports from Tehran indicate that during a recent trip to China, an Iranian delegation of businessmen signed a memorandum of understanding with major Chinese banks to ease the banking restrictions on Iranian financial transactions (ISNA, 17 December).

The Bush administration’s policy of sanctioning Iranian banks, especially against Bank Melli, Iran’s premier commercial bank, seems to have run into stiff resistance by the Chinese as well as the Russian and Arab banks. The US wants to add Bank Melli to the list of sanctioned Iranian entities in a new UN Security Council sanction resolution early next year. China and Russia can bloc the move.

The new US NIE seems to have opened la lot of doors for Iran. The Russians started delivering enriched uranium to Bushehr nuclear reactor today. The Iranians did sign a $2 billion oil contract with the Chinese. And the resistance against further banking restrictions on Iran should be viewed in this light. The NIE has changed everything!

The New Sanctions List

In the most sweeping action against Iran since the hostage crisis, United States today slapped sanctions against IRGC and its Quds Force, major Iranian banks and eight individuals.

Entities and Individuals Sanctioned for Proliferation Activities:

- The Islamic Revolution Guards Corp (IRGC)

- IRGC owned or controlled businesses:

• Khatam al-Anbya Construction Headquarters
• Oriental Oil Kish
• Ghorb Nooh
• Sahel Consultant Engineering
• Ghorb-e Karbala
• Sepasad Engineering Co
• Omran Sahel
• Hara Company
• Gharargahe Sazandegi Ghaem

- IRGC Individuals:

• General Hosein Salimi, Commander of the Air Force, IRGC
• Brigadier General Morteza Rezaie, Deputy Commander of the IRGC
• Vice Admiral Ali Akhbar Ahmadian, Chief of the IRGC Joint Staff
• Brigadier Gen. Mohammad Hejazi, Commander of Bassij resistance force
• Brigadier General Qasem Soleimani, Commander of the Qods Force

- Other Individuals:

• Ahmad Vahid Dastjerdi, Head of the Aerospace Industry Organization (AIO)
• Reza-Gholi Esmaeli, Head of Trade & International Affairs Dept., AIO
• Bahmanyar Morteza Bahmanyar, Head of Finance & Budget Department, AIO

- Ministry of Defense and Armed Forces Logistics (MODAFL), including all industrial units under its control

- Bank Melli Iran, its branches and its subsidiaries

- Bank Mellat, its branches and its subsidiaries

Entities and Individuals Sanctioned for Support for Terrorism:

- IRGC-Quds Force (IRGC-QF)

- Bank Sadererat, its branches and its subsidiaries

On December 11, 2006, the UN Security Council had sanctioned an additional 12 individuals and 11 entities for their involvement in nuclear and ballistic missile programs.

US Adds Three Banks to Iran Sanctions

The US put three Iranian state-owned banks under sanctions. The banks are: Bank Melli Iran, the country’s largest bank; Bank Mellat; and Bank Saderat. Melli and Mellat were sanctioned for their alleged involvement in Iran’s nuclear program. Saderat was designated “a terrorist financier.”

The US sanctions today included Islamic Revolution Guards Corp (IRGC) for its involvement in Iran’s nuclear program and IRGC’s foreign ops directorate, the Quds Force, designated as a terrorist organization.