Narcos Canada: Canadian banks & professions deal with significant proceeds of crime from narco trafficking and serious crimes; Canada listed again as “major money laundering country”; plus 10 money laundering areas of concern identified by the US for Canada

By Christine Duhaime | March 12th, 2020

Canada still on the Majors List

Canada made it on the “Majors List” in the annual US State Department’s International Narcotics Control Strategy Report (“INCSR“) again this year.

The Majors List is three lists and it designates countries that are (1) “Major Illicit Drug Producing and Drug Transit Countries”; (2) “Major Precursor Chemical Source Countries”; or (3) “Major Money Laundering Countries”. In 2020, Canada is on two of the three Majors List as both a “Major Money Laundering Country” and a “Major Precursor Chemical Source Country”.

Canada a “Major Money Laundering Country”

The 2020 INCSR, published last week by the US Department of State, identifies Canada as a “Major Money Laundering Country” along with several others including some well-known money laundering countries such as St. Kitts and Nevis, Dominican Republic, Mexico, Argentina, Venezuela, Vietnam, Belize, Curacao, Brazil, BVI, Cayman Islands, Colombia and Iran.

A “Major Money Laundering Country” is defined under US law as one whose financial institutions process financial transactions involving “significant amounts of proceeds of crime from international narcotics (“narco“) trafficking. Based on changes to money laundering typologies, that definition was expanded to include professions (e.g., tax advisors, accountants, company incorporators, lawyers), non-financial businesses (“NFB“) (e.g., casinos) and alternative value transfers (e.g., digital currencies) to recognize countries whose banks, NFBs, professions and other value transfer systems process transactions involving significant amounts of not just drug trafficking but also proceeds of crime from serious crimes.

Canadian banks and professions are dealing with “significant” proceeds of crime from narco trafficking and serious crimes

As a result of being on the Majors List, the 2020 INCSR found that Canada’s banks, NFBs (such as casinos), professions (such as accountants, tax advisors, lawyers), and alternative value transfer systems (such as Bitcoin and Bitcoin exchanges), deal with and process significant amounts of proceeds of crime from narco trafficking and from serious crimes.

The 2020 INCSR also identified Canada as a â€œMajor Precursor Chemical Source Country” along with several other intense drug producing countries such as Argentina, Afghanistan, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Mexico and Russia.

This year’s report is different however, with many new areas of concern for money laundering in Canada identified and several others that were identified in the past that are now gone, which may mean that Canada has made a dent in financial crime mitigation or that high risk areas have shifted (to the darknet and Bitcoin), or perhaps both.

10 areas of money laundering concern for Canada in the 2020 INCSR

There are 10 points of concern in the 2020 INCSR in respect of Canada as follows:

One – Digital currencies and real estate used for criminal activities

According to the 2020 INCSR, there is room for improved collaboration with Canada in three areas namely, digital currencies (like Bitcoin); the darknet (which by definition mean Bitcoin and so-called dark coins); and real estate transactions.

The 2020 INCSR specifically says that the US would welcome further collaboration with Canada on strengthening coordination on real estate and digital currencies used for criminal activities and investigations involving the darknet.

Two – Canada is shipping containers of cannabis to the UK

The 2020 INCSR reports that the UK has reported the illegal importation of large shipments of containers of cannabis from Canada.

Three – Violent Nigerian narco trafficking a problem in Canada

Nigerian based narco trafficking networks are popping up in Canada, following a path of similar pop-ups in France, and they are engaging in violent turf wars. The threat has grown in Canada to such an extent that the RCMP is planning to open an office in Nigeria in 2020 to address the growing threat to Canada of narco trafficking of Nigerians. The INCSR notes that illicit drugs often transit through Mozambique after Nigeria before arriving in Canada.

Four – Cocaine from Colombia coming to Canada from Guyana

Colombian cocaine trafficked to Canada is being transited from Guyana, after first being smuggled from Colombia to Venezuela. The cocaine is hidden in commodities to make it past borders. Canada is now the largest importer of goods from Guyana. TCOs use trade partners, and in fact often create them, to narco traffic. The commodities used to smuggle cocaine from Guyana to Canada would likely include shipments of sugar, rice and vehicles.

Five – Shelf companies used by criminals, narco traffickers and money launderers

Perhaps one of the most important parts in the 2020 INCSR is the concern expressed over the use of shell companies used by narco traffickers, criminal organizations, PEPs and regimes to evade sanctions and launder money, and of shelf companies to hide the true identity of shareholders of private companies for money laundering. Canada, and Vancouver in particular, has a pervasive use of shell and shelf companies, both of which are typically created and sold by larger law firms. In this post from 2016, we explain the difference between shelf companies, shell companies, numbered companies and beneficial ownership. As noted in the 2020 INCSR, the opacity of corporate structures through shell and shelf companies is of serious concern in the anti-money laundering law community.

Six – Canada requires a visa for St. Kitts and Nevis passport holders

Probably as a result of the program of St. Kitts and Nevis where anyone from anywhere can buy a passport from St. Kitts and Nevis provided they paid hefty fees and invest in a hotel-chain condo unit or a “sugar fund”, the 2020 INCSR mentions that Canada now requires that people who hold a passport from St. Kitts and Nevis must apply for a visa before entering Canada because they are high risk. For example, the Iranian foreign national, Ali Sadr Hashemi Nejad, who is on trial in the SDNY for money laundering and sanctions avoidance, was able to buy a St. Kitts and Nevis passport right after the US stripped him of a previously approved asylum claim and he was forced to leave the US.

Seven – Canadian marijuana producers are shipping product to the Caribbean

Eastern Caribbean countries such as Barbados and Antigua report an increase of marijuana being illegally imported that is from Canada, of a high grade, meaning it’s originating from British Columbia, a sign that Canadians are expanding their own narco trafficking activities.

Eight – Transnational criminal organizations in Canada are still narco trafficking cannabis to the US

Several transnational criminal organization in Canada are still exporting cannabis products into the US illegally.

Nine – Proceeds of crime from other countries is laundered in Canada

According to the 2020 INCSR, proceeds of crime that are foreign generated are parked in Canada and laundered and that laundering process involves professional money launderers, constituting a key threat.

Ten – Canada has a proliferation of professional money launderers

The 2020 INCSR identifies that Canada has professional money launderers used by transnational organized crime groups and narco traffickers and moreover that the access of transnational criminal organization to professional money launderers represents the most threatening and sophisticated actions in Canada.

Why is there an annual INCSR produced by the US State Department?

Pursuant to US law for foreign assistance, the US government makes an assessment in connection with providing foreign aid to countries (whether financial, technical, intelligence or other aid and assistance) of the extent to which countries comply with international treaties they signed in respect of financial crime. For example, Canada signed the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances which requires taking effective action against money laundering. Under US law, financial aid and assistance can be withheld for countries on the Majors List when they fail to meet international treaty obligations in respect of money laundering, narco trafficking and illegal drug production. And thus the annual report is to evaluate compliance by countries with narcotics and money laundering treaties for financial assistance.

Canadian accused of money laundering as part of sophisticated lawyer-concocted shell operation to hide proceeds of crime, extradited to New York and indicted

By Christine Duhaime | March 6th, 2020

A Canadian charged with money laundering, Enzo Vettesse, was extradited to New York last week and a 2013 sealed indictment against him, was unsealed.

On March 18, 2013, Montrealer Vettesse was caught in New York transporting a suitcase filled with US$245,000 in cash and confessed to US law enforcement that he was traveling with the money to launder it. He was released because, it appears, he then assisted US law enforcement to take down the alleged ring leader of the money laundering operation, subsequent to which his extradition was sought.

The ring leader is alleged to be Edgar Belapatino, from Peru who lives in Quebec. He too is indicted in New York and is or is being extradited.

According to an investigation by Homeland Security Investigations and the IRS, Belapatino ran a sophisticated money laundering operation to wash bulk cash using shell companies set up with lawyers to conceal the illicit source of funds from the money laundering operation.

His activities laundering money as a service, in this case bulk cash through shell companies, involved trade based money laundering where false invoices are used to create a fake paper trail.

The bulk cash was the proceeds of crime alleged to be from the trafficking of narcotics.

Homeland Security Investigations intercepted communications between Belapatino and his lawyer about setting up the shell companies in a lax anti-money laundering jurisdiction to hide proceeds of drug trafficking.

It is not Belapatino’s first brush with the law.

In 2007, Belapatino was given an ultra light sentence in Montreal of only three years for obtaining fake passports from Mexico in 2003, which he sold to 100 foreign nationals from Peru. He then smuggled those 100 Peru nationals into Canada illegally for a fee of approximately $10,000 each. It is not known how he laundered those proceeds of crime or if he was charged with money laundering for his large scale organized human smuggling operation.

Two bank employees charged with money laundering and creating “doctored” bank records to steal over $1 million

By Christine Duhaime | March 5th, 2020

In the Southern District of New York, two employees of a large national bank were charged with money laundering, bribery and wire fraud in connection with activities they allegedly undertook to create “doctored” bank records in order to steal over $1 million.

Specifically, the US government alleges that they knowingly devised a scheme to defraud others of their property and money, by false and fraudulent pretences, representations and promises and created fraudulent bank documents in the process. Further, that they attempted to conceal and disguise the ownership of the proceeds of their activities in violation of anti-money laundering law, and to transfer the proceeds of the property stolen from others through a bank account.

At their arraignment in New York, the accused bank employees argued that the AG should not inform the bank of their arrest, an argument that was rejected by the Judge.

It seems like a very unusual and inappropriate suggestion by the accused to the Judge that the bank not be informed of their arrest and of the conduct over which they are accused, and to let them go back to work.

The employees are accused of bank fraud and money laundering. The documents they are alleged to have “doctored” involve documents of the bank involving real customers. There’s no question, as a matter of law and ethics, and to preserve the integrity of the investigation and of the prosecution that the bank must be informed and the accused prohibited from any further access to the bank’s premises, files and systems.

One can’t imagine a situation where it would be advisable to reposition back into a financial services company, employees suspected of doctoring bank records.

You can read the charges here.

ICO founder with £220,000 in cash to store

By Christine Duhaime | March 5th, 2020

Inner City Press, a blog that covers trials in the Southern District of New York, and which covered one of the trials associated with the initial coin offering (“ICO“) of OneCoin, released an email by the founder of OneCoin, Ruja Ignatova, where she said she had £220,000 in cash and wanted it stored in London.

ICO founder says she has £220,000 in cash to store.

OneCoin is a US$4 billion scam that took investments from people in 175 countries. It represented to have its own Blockchain and digital currency exchange called Xcoinx, where OneCoin was allegedly listed and free-tradable. However, OneCoin did not have a coin, a Blockchain or an exchange.

Ruga Ignatova

Ignatova (here) sent emails explaining that an exit strategy would be to take the money and run and blame someone else.

Ignatova did run, the money disappeared and she has not been seen in several years. People that worked at OneCoin suggested on a podcast that the mafia allegedly infiltrated OneCoin. It could be that the “blame someone else” is going to be the mafia.

One of the persons Ignatova writes to about having £220,000, Robert Courtneidge, is a payments specialist, who is speaking at something called Blockchain Europe 2020, who works closely, allegedly, with Her Majesty’s Treasury and Financial Conduct Authority.

Several banks are hitting the stage with Courtneidge at Blockchain Europe 2020, including ING Bank, Commerzbank AG, Rabobank, Eurobank, Bank Hapoalim, as well as the European Banking Authority.

According to the Financial Times, Courtneidge was, until a few days ago, a director of a company called e-payments, that provides payment processing for prostitution services, multilevel marketing systems and the digital currency sector that almost no one has heard of. It was suspended by the organization he allegedly works closely with, the Financial Conduct Authority, for lax anti-money laundering compliance.

US releases national strategy for anti-money laundering threats to US financial system

By Christine Duhaime | February 8th, 2020

The US Department of the Treasury has released a “2020 National Strategy for Combating Terrorist and Other Illicit Financing“, which provides a roadmap to identify current money laundering and terrorist financing threats and provides strategies to mitigate the identified threats and risks.

In the Strategy, some of the key money laundering risks are identified as the proceeds of crime from fraud (securities fraud included), online cybercrime and drug trafficking and from activities of transnational criminal organizations. Fraud is identified as the largest threat.

One of the key methods identified is the use of Bitcoin and other digital currencies that are used to launder proceeds of crime, often through encrypted messaging apps and on the darknet.

In the Strategy, the use of shell companies to hide the identity of control persons behind shareholders of private companies is also identified as a key risk. The Strategy notes a study by the US Treasury that found that shell companies were used in a substantial portion of tax evasion and fraud cases, generating proceeds of crime. The problem is compounded, according to the Strategy, when money launderers structure companies through AML lax jurisdictions, making it hard to un-peel the layers of owners of companies.

The Strategy also addresses risks in the real estate sector, noting that in money laundering cases, studies show that real estate professionals such as mortgage brokers, real estate agents and to a lesser extent, real estate lawyers, were the dataset most involved in facilitation of real estate transactions that involved money laundering. The examples in the Strategy include money from China used for real estate.

The Strategy discusses the role of lawyers and notes that lawyers are not required to understand the nature or source of income of clients or potential clients, and yet they serve as access points to the US financial system, making them vulnerable to abuse by clients.

The Strategy notes that it is well-established law that privilege and the work-product doctrine do not apply to legal services where the activity was or is criminal or involves fraud and goes on to highlight the increased action by law enforcement against lawyers who assist in narco trafficking and whose trust accounts are used for criminal or fraudulent activities by clients. It provides examples, particularly of securities fraud, where lawyers provided services to facilitate securities fraud and were prosecuted. The Strategy notes that some lawyers provide services that are not the provision of legal services.

To strengthen compliance and disrupt illicit financial activities, the Strategy recommends a number of actions to take including implementing a risk-based approach to supervision, improving reporting obligations, implementing an enhanced focus on supervising transactions involving digital currencies and exchanges because of their high risk nature, and improved comprehension and attention paid to real estate transactions and finally, improved collection of beneficial ownership data to identify the control persons behind shareholders of private companies.

Two crypto dudes who allegedly blew through US$4.5 million on a $22k salary, used customer funds to live in a mansion together, take a private jet, gamble at casinos and drive around in exotic fast cars, charged with money laundering

By Christine Duhaime | February 7th, 2020

Two Bitcoin guys, one who called himself the “Krypto King”, were charged in Arizona with money laundering and wire fraud after an investigation by the US Secret Service. According to material filed in the case, they are alleged to have used US$4.5 million of money that belonged to customers to live a lavish lifestyle that included living in a mansion together, riding around in exotic fast cars and taking a private jet trip together.

The crypto lifestyle – riding around on private jets and in exotic cars

The two – John Michael Caruso and Zachary Salter – are alleged to have started a company called Zima Digital Assets which sold digital currency securities and took in US$7.5 million from 90 investors but allegedly did not buy any digital currencies with the money.

Caruso has a criminal record in the US.

Time and again, according to allegations in Court filing, they appear to have made several untrue statements in order to get people to give them money; money which they allegedly spent on themselves.

Salter allegedly told prospective investors, among other things, that Zima Digital was the top in the world and had a genius behind it with the highest IQ in crypto (by which he may have meant Caruso, to imply to investors that funds were safe) and was delivering to all its customers with a return on investment ratio that was wild.

According to affidavit evidence from James Lamerson, a special agent with the US Secret Service, what was wild appears to have been their alleged spending of customer funds. Caruso and Salter allegedly spent money lavishly on casino gambling (US$830,000) in Las Vegas; private jet trips (US$350,0000); exotic car rentals (US$350,000); a rented mansion (US$150,000) and numerous other things.

Caruso had a reported income of US$22,800, according to the affidavit.

Salter had a reported income of $0.

Caruso allegedly bought a Lambo Urus and Salter bought a number of expensive cars including a Mercedes, a BMW and an Audi.

Salter and Caruso with many fast cars at the mansion; photo by Cigar Aficionado Magazine

Special agent Lamerson located and trailed Caruso and Salter as part of his investigation and he deposed that he once followed them into a restaurant during which time he overheard them taking a call from a bank informing them that the company’s bank account was being de-risked. Over the course of trailing them, he noticed that they drove many luxury expensive exotic cars including McLarens, Farraris, an Aston Martin, and other Lambos, which had been rented.

The Secret Service subpoenaed casino records of the employees of the company and learned that Caruso with another associated person, or employee, went to Las Vegas multiple times and spent US$1.4 million gambling.

The affidavit notes that Caruso made statements (potentially implying that they appeared exaggerated), such as that he traded his own money privately and made so much money, others asked him to trade for them; he had a unique talent to spot trading trends that others didn’t have; and the company had US$379 million under management, which the affidavit says was an untrue statement.

In investment material sent to prospective investors via email, Caruso and Salter allegedly guaranteed returns of up to 30% and never met that guarantee because the funds were allegedly mostly spent.

The affidavit suggests that Salter paid for coverage in the press. He gave an interview as a “fabulous person”, where he said that Caruso was world famous, and he is alleged to have raised US$300,000 for refugees in Bangladesh.

Before getting into selling Bitcoin, Salter was a realtor. In this magazine article, Salter is alleged to be famous too, in fact a “music mogul.”

But not really; recollect that special agent Lamerson deposed in his affidavit that Salter had an income of $0.

In that same magazine article, Salter’s voice was said to “command the attention of millions.”

But not really; he produced a number of music videos, such as the below, which is really good but only attracted 250k views.

This case has a Covid-19 update here.

Accountant who worked with law firm in Panama Papers scandal faces ID theft, as well as money laundering charges

By Christine Duhaime | February 4th, 2020

Accountant Richard Gaffey, who was charged with money laundering offences, among others, in connection with the Panama Papers scandal must face charges of identity theft at his trial in connection with working with the law firm Mossack Fonseca, a judge ruled last week in New York.

Gaffey had applied to have the ID theft charges dismissed.

The case is interesting because the US government is pursuing, in part, the issue of beneficial ownership in the case. They allege that the accountant helped clients of the Mossack Fonseca law firm, and of his firm, use shell companies owned by sham foundations in offshore tax havens with lax anti-money laundering compliance to tax evade. In those corporate documents to set up the shells and foundations, Gaffey allegedly listed an elderly woman related to the client on the share registers, which the government alleges was fraud because she was not the shareholder.

Gaffey argued that he had not stolen identity, merely used it for corporate structuring purposes, and emailed it out and such.

Usually in tax structuring and tax planning files, it is accountants who set up shell and other companies, not lawyers. Conversely, in M&A, it is lawyers and not accountants who set up shell and other companies for financings. The difference is that using an accounting or advisory firm means that, for the client, no part of the accountant’s work is privileged or protected. It also means non-lawyers are often opining on complex tax law, and the advice is uninsured. People who want to be tax structured are always advised of this and opt to use accountants anyway.

Canadian CEO of Silk Road drug market who bragged that US law enforcement “don’t have sh*t on me”, nabbed and pleads guilty in the US

By Christine Duhaime | February 3rd, 2020

One of the kingpins of Silk Road, the online darknet drug market that operated with Bitcoin, and its alleged CEO, Roger Clark, a Canadian, pled guilty on Thursday in New York to conspiracy to distribute narcotics. He faces a term of incarceration of 20 years.

Clark was extradited from Thailand in 2018, and was charged with narcotics trafficking conspiracy, distributing narcotics by means of the Internet, computer hacking conspiracy and money laundering. He was facing a term of imprisonment of life if convicted.

Clark advised Ross Ulbricht on all aspects of the operations of Silk Road, including how to avoid detection of US law enforcement. He was known as Variety Jones online and he figured prominently in the Silk Road chat evidence in the trial of Ulbricht, the founder of Silk Road. According to this reporter, Clark was its CEO. Silk Road was a $200 million online drug marketplace that facilitated the sales of illegal drugs and services around the world.

At his plea hearing, a few days ago, Clark admitted he played a central role in Silk Road and had advocated for the use of violence against anyone who cooperated with law enforcement. Clark went so far as to urge and facilitate, the attempted killing of a person suspected of stealing from Silk Road. That attempt is one of the more controversial stories surrounding the Silk Road case because the person they were trying to kill lived in Vancouver and the hit man was said to be a member of the Hells Angels, who asked to be paid in Bitcoin way back in 2014. The apparent Hells Angels hit man was paid and the transaction was recorded on the Blockchain on the time and date corresponding to when Ulbricht chatted that he sent Bitcoin to pay for the deed, but the RCMP discredited the story and said that no murder took place.

The two were aware that their activities triggered the super kingpin laws. Clark wrote to Ulbricht: “Not to be a downer [but] …understand that what we are doing falls under Drug Kingpin laws, which provides a maximum penalty of death upon conviction. . . . The mandatory minimum is life.”

Ulbricht wrote: “All in.”

Ulbricht was convicted of money laundering with an underlying narcotics offence, narcotics trafficking, running a criminal enterprise, trafficking in false ID products, among others in 2015, and was sentenced to life in prison with no possibility of parole.

Clark once told a reporter in 2016, in respect of the US government that: “They don’t have sh*t on me.”

Clearly they did.

Two alleged fraudsters who hid in Canada, returned to the US to face US$17 million securities fraud litigation

By Christine Duhaime | February 3rd, 2020

For a few years, Canada was harboring two alleged fraudsters who were wanted in the US, and no one seemed to know much about it except US law enforcement – one was returned two weeks ago and the other was extradited from Canada in November.

The first, Ahmed Naqvi, who appears to be Canadian, fled to Toronto in 2015, after being charged by the SEC in Florida, and later charged criminally, with securities and wire fraud in New York. The second, Frederic Elmaleh, fled to Canada from Florida in 2017. He was charged with Naqvi. He also appears to be Canadian with US citizenship, but it is unclear.

Both men allegedly solicited over US$17 million from over 50 investors in Canada, the US and Saudi Arabia for fictitious sales of well-known public companies. Through Elm Tree Investment Advisors, which they allegedly controlled and operated in Florida, they allegedly sold units in their own investment fund that investors were told held shares of big tech companies such as Twitter, Alibaba, Square, Uber, Snapchat and others. Investors were guaranteed returns of 338% for holding shares in Twitter and 250% for holding shares in Square.

Allegedly, none of the funds yielded anywhere close to those returns and in fact they lost millions. The government alleges that the firm acted as a Ponzi scheme – money from new investors was used to pay back earlier ones.

Investors lost millions, in part because, as the AG for the SDNY alleges, Elmaleh used investor funds for fancy fast cars, such as a Bentley Continental GT and Maserati Gran Turismo, a 4,644 sq. ft. 5-bedroom Florida mansion with its own elevator, expensive watches and diamond jewelry.

  • Inside the Elmaleh mansion
  • The Maserati
  • The Bentley

When investors turned on the heat to be repaid, Elmaleh and Naqvi allegedly started to create fake financial documents, and allegedly to doctor other documents, to buy more time. They also allegedly made oral and written representations to investors to keep buying more time, telling them that their investments were generating positive returns when in fact, some of those investor funds were allegedly parked in real estate.

Naqvi then high-tailed it up to Canada where he was traced living in the Toronto area and Elmaleh followed two years later.

After Elmaleh was first arrested in 2015, a stash of weapons was located in his mansion, including:

  • AR-15 Bushmaster assault rifle with ammo;
  • Glock gun case with an empty 15 round magazine and 1 box of Luger ammo;
  • Blazing Brass ammo; and
  • Smith & Wesson 500 magnum revolver with 1 box of ammo.

Why a Canadian fund manager needed an assault rifle and a hand gun at his mansion, is unknown.

Elmaleh has numerous connections to Ontario, beyond his family. According to Court filings in the SEC matter, while the fund was operating, Elmaleh sent millions of dollars to people he knew in Toronto, often in the tens of thousands each, for purposes of which are not known. During the financial investigation, more ties to Canada were discovered, including to two Ontario companies in Toronto, one operated by Elmaleh’s father, which was alleged to have acted partly as a cover for the fund’s operations, and to have been unjustly enriched thereby.

Elmaleh’s 70-year-old parents threw in the towel after a few years of defending claims involving their son and informed the presiding Judge in the civil action that they could no longer afford fees to defend themselves. Ultimately, they were ordered to pay US$2 million, plus interest.

Both Elmaleh and Naqvi are now in jail in Manhattan pending a trial.

After Elmaleh fled to Canada, he made numerous posts on social media about Bitcoin and China-based Tron, including that he was a Bitcoin investor, suggesting that maybe there is a treasure trove of Bitcoin and Tron parked in a Toronto digital currency exchange – perhaps the one digital currency exchange in Toronto that provides a mixing and tumbling service for digital currencies to assist its users be anonymous to avoid the rule of law.

He also posted a photo of Santorini on a social media platform with the caption that [one should] “die with memories, not dreams.”

Canadian company sent US sanctioned equipment to Iran; Iranian sentenced

By Christine Duhaime | February 2nd, 2020

An Iranian foreign national living in the US, Mahin Toussi Mojtahedzadeh, was sentenced to 443 days in jail in the US, for conspiring to unlawfully export gas turbine parts from the US to Iran, using a company in Richmond Hill, Ontario. She is being removed from the US and deported back to Iran.

Mojtahedzadeh was the president of ETCO-FZC, an export company which imported turbine parts to Iran from various places through Dubai. On July 19, 2019, she pled guilty to one count of conspiring to violate the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations. 

From 2013 through 2017, she worked with companies in Canada, including one that purportedly went by the name Industial Parts Solution, deliberately to violate sanctions against Iran, by having these companies acquire sanctioned equipment through Canada; the Canadian companies then forward shipped them to Iran, without having a license from the US Office of Foreign Assets Control.

Two of Mojtahedzadeh’s co-conspirators in Germany also pled guilty and were sentenced but so far, no word on prosecutions for sanctions avoidance on the Canadians in Richmond Hill, Ontario, who were part of the sanctions avoidance scheme.