Recently, Alireza Onghaei, an Iranian citizen, who arrived in Canada in 2008 as an investor immigrant was highlighted in the news as he had been the object of an alleged money laundering investigation by the Canadian Security Intelligence Service (CSIS).
Global News reported on November 24, 2020, based on a classified report by CSIS, that a Toronto currency exchange business helped the Iranian regime secretly wire millions of dollars into Canada, in violation of sanctions.
The report called the financial transfers a threat to national security and accused Alireza Onghaei of “assisting the government of Iran in the clandestine wiring of monies into Canada.” The report shows how Canadian intelligence officials suspect the Iranian regime is evading international sanctions by funnelling money through the United Arab Emirates and using Toronto based small currency exchange companies to move it into Canada.
In a nutshell, the story begins with Onghaei arriving in Canada as an investor immigrant in 2008 and registering a company named ONG Currency Exchange in January 2010.
In July 2010 Canada imposes sanctions on Iran under Special Economic Measures Act.
It is not clear when Onghaei moved to United Arabs Emirats and started a business there, however in January 2011 UAE issued a warrant for Alireza Onghaei for allegedly issuing un-funded cheques. In addition to the economic difficulties of his business in the UAE, Onghaei’s ONG’s business registration in Canada was revoked in October 2012 according to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada, FINTRAC is the national financial intelligence agency of Canada. It was established in 2000 under the Proceeds of Crime Act to facilitate detection and investigation of money laundering).
In 2013, the Canada Revenue Agency fined Onghaei $644,000 which was subsequently reduced to $195,000.
The same year, Onghaei applies for Canadian citizenship. His application was deemed inadmissible due to the 2011 warrant filed by the UAE against him. He appealed this to the Federal Court in 2018 and in June 2019 filed a new application in another attempt to seek Canadian citizenship. However, in November 2020, the Federal Court dismissed his appeal and Immigration Canada rejected his application.
On November 27 and 28, 2019, Onghaei was interviewed by CSIS as part of an investigation into his businesses. In its December 20, 2019 report, CSIS stated that Onghaei admitted to assisting the government of Iran in the covert transfer of funds to Canada. He described that money would be sent to Dubai by the Iranian Saderat Bank to circumvent sanctions.
CSIS’ report did not detail what the money was destined for, nor when the alleged transfers took place, but it mentioned that the investigation was concomitant to “foreign influenced’’ activities that are deceptive and detrimental to Canada’s interests. CSIS’ report further reads “For additional clarity, Mr. Onghaei stated that he knows the process of circumventing economic sanctions is clearly illegal. Yet, Mr. Onghaei admitted to having conducted such activities for at least three years,”.
It must be emphasized that Saderat bank is a state controlled financial organization working for the Iranian regime. ‘’Saderat’’ means ‘’exports’’ in Persian language. This bank is the subject of Canadian sanctions, and the U.S. Treasury alleges that Iran funds Hamas, Hezbollah and other terrorist groups through this organization.
Today, there is heightened concern within the community of Canadians of Iranian descent as well as anti-money laundering experts in regards to the growth of the Toronto-based currency exchanges businesses. Onghaei’s case is certainly not a one-off. The RCMP had previously raided the currency shop of Farzam Mehdizadeh in 2016. Mehdizadeh was then charged for allegedly laundering $100 million in Montreal and Toronto in one single year. The RCMP believes these money launderers to be connected to the upper echelons of Middle Eastern organized crime and terrorism groups.
The RCMP believed Mehdizadeh was part of a larger group of underground financiers, active especially in Toronto and Montreal, with links to real-estate related money laundering activities.
Indeed, it is interesting to read in a report released by International Transparency Canada that, ‘’since 2008, $28.4 billion in GTA housing has been acquired through companies – the vast majority of which are private entities with owners who can remain anonymous. Those companies have made $9.8 billion in cash purchases. In all, at least $20 billion appears to have entered the GTA housing market in the past 10 years without oversight from FINTRAC. There is no way of knowing how much additional money, through trusts and nominees, has entered the market without undergoing Anti Money Laundering due diligence or reporting.’’
Real estate is definitely a popular way to launder money by the Iranian regime because mortgage brokers, lawyers, and homebuilders aren’t required to report suspicious activities to anti-money laundering oversight organizations such as FINTRAC.
According to a Global News report from 2010, there were only about five currency exchanges in Toronto’s north end, where the population of Canadians of Iranian descent is mostly concentrated. But today, within several blocks of Steeles Avenue and Yonge Street, there are over 70 currency exchanges known to the RCMP.
When asked about the footprint of the Iranian regime in Canada, Senator Léo Housakos said: ‘’ This is very concerning and something which the current government should take very seriously as it ponders its relationship with the Iranian regime. Sadly, much like we see in their relationship with the communist regime of China, Justin Trudeau hesitates to take hard lines where he should. We must send a message to regimes like Iran, that Canada is a nation that will stand up to, not back down from, tyrannical behaviour. And that this nation will not be a safe haven for terrorists or their money laundering schemes to fund their terrorist activities.”
As the Iranian regime is known to continue to support and sponsor terrorist and other illegal activities both in the Middle-East and abroad, these vehicles which support such activities financially must be dealt with immediately, as a threat to Canada’s national security.
By Avideh Rafaëla Motmâenfar, a Belgian-Canadian citizen of Iranian descent. She holds a D.O. Degree since 2000 (The Belgian School of Osteopathy, Belgium). She has also studied at the Ecole de Journalisme at the Free University of Brussels, Belgium and is a graduate of The Art Institute Of Toronto. She has been volunteering in producing radio programs for Radio Koocheh on medical and medico social issues for 4 years and continues to write and blog.