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The property at 26 Suncrest Dr. in Toronto owned by Mahmoud Reza Khavari.

J.P. MOCZULSKI/j.p. moczulski The Globe and Mail

As Canadian officials look at ways to revoke his citizenship and remove him, a top Iranian financier who fled to Canada from Tehran amid a major bank scandal has off-loaded his real-estate holding in Toronto, records show.

On Oct. 7, nine days after he flew to Canada, Mahmoud Reza Khavari and his wife paid off the mortgage on their $3-million Toronto home and gave it for a token $2 to their daughter, Parandis Khavari, land registry documents show.

Mr. Khavari is a dual Canadian-Iranian citizen. He resigned as chairman of Iran's state-owned Bank Melli because of an alleged $2.6-billion embezzlement case that has shaken the office of President Mahmoud Ahmadinejad since it became public this fall.

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Property records show that a house on Suncrest Drive that Mr. Khavari and his wife had bought in 2007 was transferred last month to Ms. Khavari "for natural love and affection," the standard phrase indicating it was a gift from parents.

The family also owns a $660,000 home on Hollywood Avenue in North York in Mr. Khavari's wife's name.

The ownership transfer was first uncovered by HafteH, a Farsi-language weekly of the Montreal Iranian community.

In addition to being linked to the fraud scandal, Mr. Khavari's bank has been blacklisted for years by Canada, the United States and the European Union, which allege that Melli used shell companies and other deceptive practices to finance terrorism and fund Iran's nuclear and missile programs.

U.S. security analysts say Mr. Khavari is a trove of intelligence about illicit Iranian banking and have called on Canadian officials to question him.

Avi Jorisch, a former U.S. Treasury official, said the Canadian government should consider freezing Mr. Khavari's assets because of the position he held at a financial institution that's internationally blacklisted.

Mr. Khavari would find it beneficial to co-operate with the authorities in return for immunity, he said. "He potentially represents a gold mine of information on how Iran is raising and moving money."

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Bank Melli is one of 279 designated Iranian entities with which Canadians cannot do business under Canada's 2010 Special Economic Measures Regulations on Iran.

As early as 2003, Ottawa blocked an application by Bank Melli to open a Canadian subsidiary, according to an off-the-record discussion between a Canadian Finance Department official and U.S. diplomats that was reported in a cable released by WikiLeaks.

Nevertheless, Mr. Khavari, who also worked for a subsidiary of another blacklisted Iranian institution, Bank Sepah, obtained his Canadian citizenship in 2005. His family has owned real estate in Toronto since 2001, and his son was president of a now-dissolved Toronto travel agency.



With a report from Stephanie Chambers

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