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Canadian assets owned by Ali Ibrahim Dabaiba are at the centre of a criminal investigation in Libya, according to investigators and documents obtained by The Globe and Mail

Ali Ibrahim Dabaiba.The Globe and Mail

They call it the Golden Square Mile. This historic downtown Montreal neighbourhood was once the wealthiest in Canada. Featuring Victorian mansions, fine restaurants and swanky shops, the district remains a purlieu of the city’s well-to-do.

It’s also where one of Libya’s most wanted has parked some of his allegedly ill-gotten gains.

Ali Ibrahim Dabaiba owns two suites in Les Résidences Mont-Royal, a building situated above a high-end shopping centre in the area. The apartments, together worth more than $1.6-million, are just some of the assets Mr. Dabaiba has amassed in Canada since he was a top aide to Libyan dictator Colonel Moammar Gadhafi.

Now, Mr. Dabaiba’s Canadian properties, businesses and investments are at the centre of a criminal investigation in Libya, where he is suspected of embezzling public funds, money laundering, abuse of an official position and making illegitimate payments and illicit profit, according to investigators and documents obtained by The Globe and Mail.

Mr. Dabaiba, who became a Canadian even while running a Libyan government agency, is among a number of former Gadhafi-era officials wanted for allegedly looting billions of dollars from public coffers during the dictator’s 42-year rule. The allegations, which have not been proven in court, stem from Mr. Dabaiba’s time as head of the Organization for Development of Administrative Centers (ODAC), Libya’s infrastructure contracting department, where he did business with numerous companies, including Montreal-based engineering firm SNC-Lavalin Group Inc.

From 1989 to 2011, ODAC awarded more than 3,000 contracts worth 45.4-billion Libyan dinars ($43.4-billion), according to a Libyan government audit report and investigators who spoke on the condition of anonymity because they are not authorized to speak to the media. Mr. Dabaiba is alleged to have taken a cut of those contracts and steered business to companies he owned or with which he was affiliated.

In the process, investigators believe Mr. Dabaiba pocketed extraordinary sums for himself and associates – the equivalent of $3.37-billion – while hiding large amounts in other countries, including Canada, and in some cases washing it through Canadian banks, businesses and real estate.

Citing privacy concerns, the RCMP won’t say if Mr. Dabaiba or the companies he’s associated with are under investigation in Canada.

A Globe investigation shows that Mr. Daibaba exploited a now-discredited immigration program to gain a Canadian passport. Though there’s no evidence he has ever worked in Canada, he appears to still use his citizenship when convenient – as recently as 2016 he cited it when trying to acquire control of a Scottish company.

Ali Dabaiba’s Canadian passport.The Globe and Mail

Libya has requested Canada’s assistance on Mr. Dabaiba’s file. In March, 2015, Fathi Baja, Libya’s ambassador to Canada, wrote to the Department of Foreign Affairs (since renamed Global Affairs Canada), requesting that officials block the renewal of Mr. Dabaiba’s passport, which was set to expire on July 5, 2015. Because many countries do not require entry visas for Canadians, the letter said, Mr. Dabaiba could use the passport to evade justice.

Separately, Mr. Dabaiba is under investigation in Scotland on suspicion of money laundering.

“Police Scotland is currently conducting an enquiry into this case, and as this is a ‘live’ enquiry under the terms of Scotland’s Contempt of Court Act, it would be inappropriate to make any further comment at this time,” Detective Chief Inspector Jim Robertson of the economic crime and financial investigations unit said in a statement.

The Libyan and Scottish investigations come as Canada overhauls its anti-money laundering and terrorist financing legislation. In a 2016 review, the Financial Action Task Force, an intergovernmental body, found that cross-border movements of money are rarely analyzed by law enforcement. It concluded that Canada struggles to detect corruption and the laundering of money through real estate.

That long-standing truth may help explain why Mr. Dabaiba chose this country as a haven for his money in the first place.

Mr. Dabaiba set his sights on Canada in 1993, after he became a Gadhafi insider. He hired the Montreal-based immigration firm TIMC Inc., and wrote that he intended “to migrate to Canada as an entrepreneur.” He estimated the value of his personal assets at more than US$500,000.

“I have never been to Canada before,” he admitted in later correspondence.

Ahmed Lamlum. (File Photo).The Globe and Mail

His immigration plan was dubbed the “Canadian investment project” by his business associate Ahmed Lamlum, another Libyan who is alleged to have defrauded ODAC alongside Mr. Dabaiba. The two men planned to take advantage of the now-defunct federal immigrant investor program. By investing between $150,000 and $250,000, affluent immigrants could gain a fast track to Canadian citizenship.

Mr. Dabaiba and Mr. Lamlum each transferred $250,000 to Calgary-based Alberta International Capital, a government-approved syndicate for immigrant investors. The funds were held in an escrow account at a National Bank of Canada branch in Saskatoon, subject to the investor program’s five-year lock-in period. AIC Ltd. would eventually use the money to invest in such projects as the Radisson Plaza Hotel in Calgary, energy company Infiniti Resources International Inc. and the Hard Rock Cafe in Banff, Alta. Mr. Dabaiba and Mr. Lamlum would later transfer the interest earned on their Canadian investments to their accounts at Credit Suisse in Geneva.

On his immigration application, Mr. Dabaiba wrote that he had $825,615 in other transferable funds at his disposal. He listed his dependants as his spouse, Khadeeja Mohamed al-Dabeeba, and five children. Fluent in English, he marked his occupation as “business consultant” at Nuvest Consultancy Ltd., a position he had held since 1991, and “general manager” at ODAC. Both jobs were in Misrata, Libya, and he stated his gross monthly earnings as $16,100.

In early 1994, officials at the Canadian embassy in Cairo flagged deficiencies in Mr. Dabaiba’s application – missing were his date of birth and his full residential address in Libya – before finally rejecting his application in August of that year.

“In my opinion, you do not meet this definition of investor because you have not successfully operated, controlled or directed a business,” the embassy’s second secretary, P. Nectoux, wrote in a two-page letter. “ … I am not convinced that you ever had to take independent decisions with significant impact on the structure or major strategies of a business.”

The embassy official also questioned the source of Mr. Dabaiba’s wealth. “According to the documents we have and to your declarations at interview, your personal net worth has been accumulated through salary earnings and mostly commissions received when you approved contracts for O.D.A.C. (three millions of dollars over the last five years), and is not derived from an investor’s activity.”

He was also deemed inadmissible as an independent applicant and under humanitarian and compassionate grounds.

When Mr. Dabaiba’s Montreal immigration consultants failed to convince the embassy in Cairo to reconsider its decision, TIMC’s controller, Cindy Calvert, wrote to suggest the men submit a revised application to the Canadian High Commission in London. “It would also be good to have new employment letters, again highlighting managerial and administrative duties,” she wrote on Nov. 8, 1994, adding the high commission would be aware of his previous, rejected application.

Ms. Calvert oversaw the revision of his employment letters for ODAC, Nuvest and a third company called Fabulon Investments Ltd., based in Cyprus.

When reached by telephone, she said she has no recollection of Mr. Dabaiba. Ms. Calvert explained her job was to ensure that clients’ paperwork was in order. “Everybody had a criminal background check that was done by the Canadian government, so as far as myself, as a consultant was concerned, everbody was totally legitimate,” she said. “I had no idea of any customers having any type of association with Gadhafi.”

There were odd discrepancies in parts of Mr. Dabaiba’s file. For example, there were at least two different employment letters from Fabulon, both purportedly signed by a company official on Nov. 16, 1995. One referred to him as a “managing director,” involved “in the overall supervision of the day to day running of the company’s affairs,” while the other said he was a director who “is not actually involved in the day to day running of the office.”

Mr. Dabaiba made other changes on his second application – including the spelling of his name. While his first application had stated that his full name was Ali Ibrahim al-Dabeeba, he identified himself this time only as “Ali Ibrahim Dabaiba.” He provided an address in Cyprus, not Libya, as his permanent home, as well as a second address in London, the same one used by Mr. Lamlum.

The new documents had the desired effect. The high commission in London granted him an immigrant visa, according to his record of landing, dated Aug. 8, 1996. All his original dependants, minus a newlywed daughter, were listed as accompanying family members.

But even after receiving his entry visa and later his Canadian passport, Mr. Dabaiba continued to work for Col. Gadhafi at ODAC.

Col. Gadhafi, the self-styled revolutionary, was only 27 years old when he seized power in Libya, staging a bloodless military coup in 1969. He ruled the country with an iron fist for four decades, during which the dictator and his cronies are believed to have embezzled billions of dollars’ worth of the country’s oil wealth, hiding it around the world.

In 2012, a year after Col. Gadhafi’s ouster, the Interim National Transitional Council in Libya announced that the receiver general was freezing the assets and property of 338 former officials, government entities and companies linked to the former regime. Both “Ali Ibrahim al-Dubaiba” and ODAC were on that list. The Libyan government has since audited ODAC and spent the intervening years trying to recover the stolen wealth.

For his part, Mr. Dabaiba is alleged to have charged hefty “commissions” on ODAC contracts, also to have awarded some of that government business to at least nine companies he owned, controlled or was affiliated with.

Two of those companies were based in Canada: Weylands International Trading Inc. and Silver Arrow International Trading Inc. Five were registered in Cyprus: Fabulon, Nuvest, Midcon Trading Ltd., Olexo Ltd. and Murhead Trading Ltd. Two were in Liechtenstein: Transinfo SA and Golden Star Trading Establishment.

The business connections between ODAC and the nine companies are captured in a collection of internal documents, including receipts, invoices, contracts and bank statements seen by The Globe. Numbering some thousand pages, the documents show tens of millions of dollars shuffling between Mr. Dabaiba’s government agency and the companies he controlled or with which he was affiliated.

One document, a summary of receipts, dated Dec. 30, 1998, shows Fabulon, Murhead, Midcon, Transinfo and Global Business Network Ltd. (a separate Channel Islands company that made payments to Mr. Dabaiba) as having shipped goods to ODAC worth £6.45-million ($11.34-million). Other goods were priced in different currencies, including Deutsche marks, Swiss francs, Lithuanian litas and Dutch guilders.

ODAC also listed notifications of letters of credit for Global Business Network, Fabulon, Murhead and Golden Star in different currencies.

Mr. Dabaiba’s business partner, Mr. Lamlum, who reportedly died in 2014, also played a key role in the self-dealing scheme, according to investigators and a whistle-blower who also spoke under the condition of anonymity over fears for his personal safety. One correspondence with Credit Suisse notes that Mr. Lamlum had “special power of attorney to sign on behalf of Mr. Dabaiba in his bank accounts and other documents.”

Montreal-based Weylands, a real estate firm that once employed Mr. Lamlum as its president and Mr. Dabaiba as its vice-president – and is still directed by members of the Lamlum family – also did business with ODAC. Some of the invoiced goods, however, were not related to real estate, the company’s stated business purpose. One invoice dated March 12, 1997, was for medical equipment, apparently bound for the hospital in Misurata, Libya, worth US$140,962. Other invoices were for tire shipments worth US$500,528 and US$250,508. Still, others were for furniture worth hundreds of thousands of pounds.

Documents obtained by The Globe also show money and contracts moving back and forth among some of the nine Dabaiba-linked companies. One contract had a Cyprus company paying Weylands an annual retainer of US$120,000. Other terms stipulated that Weylands would procure goods for Fabulon and promote its interests worldwide.

In one transaction, Liechtenstein-based Transinfo provided $900,000 to Mr. Lamlum and Mr. Dabaiba to purchase 1224 Stanley St., which houses Weylands’s head office, as well as a loan of $1.4-million to purchase another property at 3883 St. Jean Blvd. in Dollard-des-Ormeaux, west of Montreal.

The exterior of 1224 Stanley St., in downtown Montreal.Christinne Muschi/The Globe and Mail

A number of international and domestic banks facilitated large transactions on behalf of Mr. Dabaiba, Mr. Lamlum or their companies. In some cases, sizable payments were directed to or from customer accounts housed at banks, including Credit Suisse and Royal Bank of Canada.

In other instances, major Canadian banks had correspondent banking relationships with global lenders. Though lucrative, correspondent banking is fraught with risk because it is based on an honour system. The third-party facilitating a correspondent-banking transaction is dealing with another financial institution’s customer, and relies on that other bank’s anti-money laundering controls to prevent illicit activity. Since millions of these transactions are processed each day, it creates a blind spot for banks and anti-money-laundering authorities around the world.

Documents gathered for the Libyan investigation show that money often flowed into Canada from Swiss bank accounts. There were also big foreign exchange transactions, including a purchase of more than 3-million Deutsche marks ($2.37-million) and the sale of $2.8-million. On the same day, Mr. Dabaiba deposited 1.5-million Deutsche marks into Transinfo’s Credit Suisse account.

Large sums of money credited and debited between various accounts within 24 hours is often a signal of suspicious activity. There’s no evidence, however, that any red flags were ever raised on these transactions or the tens of millions of dollars investigators have since tracked to the Dabaiba-linked companies.

Investigators working on the Libyan case have identified at least 16 personal bank accounts in Mr. Dabaiba’s name at banks in Cyprus, Canada and elsewhere, as well as various business accounts.

For instance, Mr. Dabaiba had his personal savings account with Royal Bank of Canada in Montreal and business accounts for Silver Arrow and Weylands at that same branch, documents show.

RBC won’t comment on the current status of those accounts. But documents show Weylands is still in business and its RBC account appears to have been active as recently as 2008.

Meanwhile, Mr. Dabaiba’s private banking statements with Credit Suisse show he received large payments from Fabulon and Global Business Network Ltd. into the 2000s.

Much of this was possible because, under the Gadhafi regime, Mr. Dabaiba had wide-ranging control at ODAC. “As overall head of the company he directs and supervises the activities of the entire company,” states his job description, while exercising “complete financial authority at top level.” Additionally, he was responsible for making recommendations “for the awarding of contracts.”

The Libyan Auditing Department, which conducted a 2012 investigation of ODAC, found that most of those contracts were awarded through “direct assignment with no public bidding.” The auditor, established by the Libyan Transitional National Council after Col. Gadhafi’s ouster, also found that ODAC gave advances for contracts that were not implemented, sometimes awarded more than one contract for the same project and used 23 different bank accounts, 11 of them in foreign currencies.

In addition to lax controls and oversight, the audit report noted ODAC paid large sums of money to people outside the agency in 2011, the year Col. Gadhafi was killed, and issued cheques to fund some bank accounts for other external entities.

The audit did not name the domestic and international companies that were awarded contracts. But SNC-Lavalin had secured a number of high-profile infrastructure projects in Libya during Col. Gadhafi’s rule, including Benina International Airport in Benghazi, the Great Man-Made River irrigation project and a prison known as the Guryan Rehabilitation Institution.

SNC-Lavalin and two indirect subsidiaries are facing criminal charges over Libyan business activities, including those with ODAC. In 2015, the RCMP charged each of those entities with one count of fraud under the Criminal Code and one count of corruption under the Corruption of Foreign Public Officials Act. None of the charges has been proven in court. A court hearing for the preliminary inquiry has been set for September.

The RCMP have named ODAC as one of the entities “that was either allegedly bribed or defrauded by SNC Lavalin in order to secure certain engineering and construction contracts in Libya between 2001 and 2011,” RCMP spokeswoman Stéphanie Dumoulin said in an e-mailed statement. “Mr. Dabaiba was not investigated or involved in this investigation,” she added.

But in his 2015 letter to Ottawa, Mr. Baja – the Libyan ambassador to Canada – was blunt, writing that Mr. Dabaiba, two of his sons and his brother, Yousef Ibrahim Dabaiba, are Libyan citizens “accused of committing crimes of public funds embezzlement and misappropriation, money laundering damaging the national economy in addition to abuse of official position, making illegitimate payments and illicit profits.”

Mr. Baja also conveyed to Canadian officials that the international police agency Interpol had issued a red notice in 2014 to facilitate Mr. Dabaiba’s arrest. In light of all that, Mr. Baja wrote to Ottawa to warn that renewing Mr. Dabaiba’s passport “will give a wrong impression and a negative image of Canada.”

In fact, Canada had already received a notice about Mr. Dabaiba’s passport. About a month before Mr. Baja’s letter, an investigator working for Libya issued a back-channel warning to an official in the Department of Foreign Affairs.

“Mr. Dabaiba has never lived in Canada; in fact, before January 2011 he had never left Libya for an extended period. He is under indictment in Libya,” the investigator wrote in an e-mail dated Feb. 5, 2015. “We believe Mr. Dabaiba’s Canadian passport should be revoked. Can you advise about this procedure?”

Shuvaloy Majumdar, then director of policy for the Minister of Foreign Affairs, responded: “Turns out you’re onto something. I need verifiable information, quickly, if we are to make sure they don’t get new cdn passports. I’m asking Canadian officials to contact you – but send me what you can asap.”

Immigration, Refugees and Citizenship Canada declined to comment on the status of Mr. Dabaiba’s passport, citing privacy laws.

Libya has warned Canada, the United Kingdom, the British Virgin Islands, Malta and the Seychelles that Mr. Dabaiba and his family could use their “ill-gotten wealth” to finance illegal militias in Libya, a country which, seven years after Col. Gadhafi’s death, teeters on the brink of becoming a failed state.

Police Scotland, meanwhile, is continuing its investigation of Mr. Dabaiba for alleged money laundering through real estate. In April, The Sunday Times reported he had acquired 14 flats in Edinburgh and Glasgow worth at least £3.2-million. Mr. Dabaiba has not been charged or convicted of any crime in the United Kingdom, the National Crime Agency said in an e-mailed statement.

The Globe has obtained copies of suspicious transaction reports for accounts of Global Business Network International Group, formerly known as Fabulon, that were sent to anti-money laundering authorities in Cyprus and the UAE in 2016. Global Business Network did not respond to a request for comment.

Mr. Dabaiba, now 72, did not respond to multiple requests for comment about the Libyan and Scottish investigations or his business dealings with SNC-Lavalin. Two letters sent by registered mail to his Montreal condos were refused and returned. A letter sent to his Istanbul address was returned for an unspecified reason. Letters sent to his addresses in London and Misurata went unanswered.

In fact, most government officials and investigators, as well as companies affiliated with Mr. Dabaiba, were unwilling or unable to discuss his case or his business dealings. Some cited confidentiality rules or the continuing nature of investigations.

If Canada was meant to be his exit plan, in case things got rough in Libya, there’s no sign that he is living or working here. Although he continues to pay his property taxes in Montreal, he has taken out a $600,000 mortgage on one of his suites. The loan was made in 2016, and accompanying documents say he and his wife reside at an address in London, but it appears to be that of a business. When a Globe reporter visited that address in May, Mr. Dabaiba was not there, but a secretary confirmed it was his place of employment. She couldn’t say when he’d be back.

When another Globe reporter visited his Montreal residence earlier this year, the concierge said neither Mr. Dabaiba nor Mr. Lamlum’s surviving relatives were there. When asked how often they were in town, she replied: “I couldn’t tell you that.”

It seems the man who mysteriously became a Canadian citizen may be one on paper only.

With files from Stephanie Chambers, Rick Cash, Graeme Smith, Greg McArthur and Mark MacKinnon

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