Fugitive banker handed over to Iran

A fugitive accused of involvement in the “3,000 billion toman dossier” — the biggest embezzlement case in Iran since the 1979 revolution — was handed over to Iran this week.

"The detainee, identified as 'H.S.,' was arrested by Interpol in one of the Persian Gulf states and handed over to Iran on May 7," Col. Massoud Rezvani, head of the Interpol office of the Iranian police, announced in an interview with IRNA news agency.

The embezzlement — estimated at as much as $2.6 billion — was a fraud involving the use of bogus documents to obtain credit from eight Iranian banks to purchase state-owned companies in a manipulation of the government’s policy of privatization. The fraud reportedly extended over a four-year period, but became more serious in the months before the scandal broke in September 2011. A month later, 67 people had been interrogated and 31 arrested, but the architect of the scandal, Mahmoud Reza Khavari, resigned as the managing director of Bank Melli, Iran’s largest commercial bank, and flew to Canada where a $3 million home is registered in his name, on Sept. 27, 2011.

Khavari, who also holds Canadian citizenship, faces interrogation and possibly the death penalty if convicted of intentionally seeking to undermine the ruling Islamic system by damaging the economy. On Oct. 7, 2011, nine days after he flew to Canada, Khavari and his wife paid off the mortgage on their $3 million Toronto home and signed it over for a token $2 to their daughter, land registry documents show. This news shocked and angered the Iranian people, who were already dealing with the increasing inflation and unpredicted aftermath of so-called smart sanctions. This incident, labeled as the biggest monetary scandal in Iran’s contemporary history, took place during the second term of then-President Mahmoud Ahmadinejad, who won office vowing to fight against corruption and promised the Iranian middle class a fair and blooming economy with equal opportunity for all.