Mahmoud Reza Khavari

Mahmoud Reza Khavari (Persian: محمودرضا خاوری‎‎; born May 26, 1952) is an Iranian former banker^[3] who was involved in the 2011 Iranian embezzlement scandal. In 2005 he became a Canadian citizen.^[4] He is a fugitive wanted by the judicial authorities of Islamic Republic of Iran. As of October 2016, Khavari was wanted by Interpol.^[5]

He was chairman of Bank Melli Iran^[2] until September 2011 and chairman of Bank Sepah’s board of directors from December 2003 until at least March 2005.^[6]

Early life and education

Mahmoud Reza Khavari was born in the city of Khorramabad in southern Iran. He obtained a Bachelor of Law degree from the University of Tehran and a master's degree from Shahid Beheshti University.^[7]

Career

After graduation Khavari was hired by the Bank of Industry and Mine (Sanat-o-Madan) as the head of its complaints department. He was then selected to the board of directors of Sepah Bank in Rafsanjani's government and became the head of Sepah Bank during Khatami's presidency. In 2010 he was appointed by Ahmadinejad's government as the chairman of the board and managing director^[8] of Bank Melli Iran, the largest bank in Iran.^[9]

During his inauguration, Shamseddin Hosseini, minister of economic affairs and finance in Mahmoud Ahmadinejad's government described Khavari as a wise and pious man and told the reporters that the highest level scrutiny was employed in his appointment. ^[10]

Khavari has not obtained a PhD but has often referred to himself as Dr. Khavari in official Bank Melli Iran communications.^[11]

2011 Iranian embezzlement scandal

In 2011, Khavari resigned from his position at Bank Melli amid allegations of being involved in the Iranian embezzlement scandal of roughly 2.6 billion dollars. The scandal involved using forged documents to fraudulently buy assets that included major state-owned companies; Bank Melli, which Khavari led as its chairman of the board and managing director, was accused of facilitating fraudulent payments. ^[12] Khavari shortly after went to United Kingdom in order to attend a meeting at Lloyd Bank and announced his resignation by faxing it to Iranian officials on Tuesday, September 27, 2011.^{[8] [13]}

In his resignation letter, Khavari implicated another bank as the source of the fraud and claimed that he was resigning in order “to respect public opinion,” according to Bloomberg. 

He moved to Canada, where he has citizenship,^[2] and signed his 3-million dollar house in Bridle Path, Toronto over to his daughter, to protect it from possible seizure by Canadian authorities. Despite numerous requests from Iranian police, Canadian authorities did not extradite Khavari. He may face the death penalty if convicted by the judicial system of Iran.^[2]

Toronto property records in Khavari’s name date to 2001, when he took out a mortgage for a $615,000 property on Elmwood Ave., in North York. At one time, Khavari owned a Toronto-based company called Soaring Properties.^[6]

On October 31, 2011, House of Commons of Canada member Irwin Cotler called for investigation on how he became a Canadian citizen.^[14]

Many of the companies and institutions that Khavari has been associated with such as Bank Sepah and later Bank Melli have been sanctioned by the UN security council and the international community since 2007. UN Security Council blacklisted Bank Sepah under resolution 1747 and placed restrictions on Melli under resolution 1803. According to security expert, Avi Jorisch, Khavari is in violation of the Special Economic Measures (Iran) Regulations for having worked and provided financial services on behalf of a designated Canadian entity. Khavari is also in violation of Canada’s Anti-Terrorism Act, along with Part II.1 of the Criminal Code (Section 83.05). Furthermore under Section 83.05, Canadian authorities have the right to freeze Khavari’s assets.^[15] However as of 2016 Khavari has not been subjected to any asset freeze or investigation by the Canadian authorities.^[16]

Whereabouts

In February 2014, the head of the Interpol Office of Iranian police said “a few days ago, the Canadian Interpol claimed in a phone contact that he has escaped to a Latin American or Caribbean country but that they couldn't verify the escape yet, and this is the latest piece of information provided by the Canadian police to us”. He dismissed the report on his escape from Canada".^[17]

In March 2015, the same official announced that his hiding place had been discovered and Canadian authorities were referring his case to Canadian judiciary.^[18]

In 2016 Bloomberg reported that Khavari and his sons have been active in Toronto real estate market even after the scandal and from 2012 to 2016 the family has purchased at least $12.1-million worth of properties under various names and legal entities. Additionally they are responsible for roughly $11-million from 10 different mortgages.^[19]

The New York Times reported that Canada, where Khavari has held dual citizenship since 2005, has chosen not to extradite him to Iran since the two countries do not have a bilateral extradition agreement in place.^[20]

Khashayar Khavari

In June 2016 Bloomberg reported that there are several ongoing court proceedings in Ontario between Khavari's son, Khashayar Khavari (who was using an alias name of Khashayar Khalili), his son-in-law Mohammad Mahdi Tajbakhsh and their business partner, Toronto developer Sam Mizrahi. According to the report Khashayar Khavari (aka Kashayar Khalili) invested in two midtown luxury projects belonging to Mizrahi. Khavari has claimed 105 million Canadian dollars in damages. According to Mizrahi, Khavari threatened Mizrahi's life on several occasions.^[21]

The Khavari family firmly contends that allegations of the purported death threats are false, and Khash believes they were used as a “[distraction] from the real issues in the lawsuit.” In court filings Khash alleges that:^[22]

“Mr. Mizrahi has repeatedly endangered his family’s safety by mentioning his father’s alleged criminal past.

Given Mahmoud’s previous career in the Iranian banking system, there are religious and political extremists that wish to harm Mahmoud and his family […] Sam knows this. Sam has included these irrelevant allegations for the collateral and improper purpose of placing Mahmoud and his family in physical jeopardy.”^[22]

The case is ongoing with a hearing date scheduled in July 2016.^[21] On March 24, 2016, the court dismissed a motion on the part of the Khavaris to have Mizrahi return shares of five corporations held by Mizrahi, ruling "Khash has transferred all of his rights of ownership in the Shares to MEI [Mizrahi]. What remains under the Trust Agreement is essentially no more than a contractual obligation on the part of MEI to re-transfer the Shares at a future point in time". ^[23] Most recently, on August 17, 2016, the judge presiding over the legal dispute dismissed the motion for an inspector to be assigned to investigate Mizrahi's finances, writing "... I am further of the view that, in all of the circumstances, it would not be appropriate to appoint an inspector."^[24]

Published works

• The Book of Banking Law Consisting of Legal and Legitimate Analysis of Banking Operations and Transactions (book) published by the Banking Training Center (Iran).
• "Committed Crimes on Aircraft and Hijacking" ( essay)
• "Press Crimes" (article)
• Investigation into the Cause of Suspension of Punishment in Iran and E. U Countries Laws (white paper)

See also

• Mahafarid Amir Khosravi
• Babak Zanjani

References