CSIS alleges Iran used Toronto company to wire millions to Canada despite sanctions
26 Nov 2020

A Toronto currency exchange business helped Iran secretly wire millions of dollars into Canada in violation of sanctions, according to a classified intelligence report that calls the financial transfers a threat to national security.

A Canadian Security Intelligence Service report obtained by Global News accuses Alireza Onghaei, the investor immigrant behind the company, of “assisting the government of Iran in the clandestine wiring of monies into Canada.”

The money was routed through Dubai in order to “circumvent sanctions,” CSIS wrote in its Dec. 20, 2019, report on Onghaei, the owner of ONG Currency Exchange Inc., on Toronto’s Yonge Street.

The total amount allegedly funneled into Canada from Iran was not known, but CSIS wrote that “we assess it to be in the millions.” One transfer alone was for $600,000, according to CSIS.

CSIS did not specify when the alleged transfers took place or what the money was used for, but wrote that its investigation was related to “foreign influenced activities … that are detrimental to the interests of Canada and are clandestine or deceptive.”

The report shows how Canadian intelligence officials suspect the Iranian regime has dodged international sanctions by passing money through the United Arab Emirates and using small currency exchange companies to move it to Canada.

The United Nations began imposing sanctions on Iran in 2006 in response to its nuclear program. Canada imposed additional sanctions in June 2010.

ONG Currency Exchange was registered as a Canadian money services business in January 2010.

Corporate records show the business was registered to Onghaei’s home address and he was the sole director. ONG offered “safe and secure” money transfers, according to its website.

The CSIS report alleged Onghaei’s company would transfer money to Canada from Bank Saderat, which is controlled by the Iranian state. The bank is the subject of Canadian sanctions, and the U.S. Treasury alleges Iran uses it to fund Hamas, Hezbollah and other terrorist groups.

During an interview with CSIS on Nov. 27 and 28, 2019, Onghaei “admitted to having owned a private money exchange company that would transfer funds from Bank Saderat and other Iranian financial actors into Canada,” according to the intelligence report.

“In order to do so, Mr. Onghaei explained that Bank Saderat would transfer money into Dubai, United Arab Emirates to circumvent sanctions; from there, funds were transferred to his Canadian-based company.”

“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,” CSIS wrote.

“Mr. Onghaei also admitted that the GoI [Government of Iran] has used his company to funnel money into Canada, and stated that, in order to allow for such a process to occur, he ensures that funds are processed in the UAE to circumvent economic sanctions.”

[See original article for video timeline]

ONG’s registration was revoked in 2012, according to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Onghaei is currently the sole director of Prestige Right Inc., which says on its website it deals in “high quality, cost-efficient surgical instrumentation.”

The Prestige Right website registration indicates the company is also called Golden Future Inc. Onghaei’s citizenship application says he worked at Golden Future Currency Exchange in Toronto. Corporate records show he is Golden Future’s sole director. The company is listed as active.

His employment history also says he worked at 7272022 Canada Inc. Currency and Trading. His first wife was the only director of the company, which was dissolved in 2012, corporate records show.

Asked about ONG, FINTRAC said it was “prohibited from disclosing information on compliance enforcement actions that may have been undertaken in relation to a specific reporting entity.”

A 44-year-old Iranian citizen who lives in Vaughn, Ont., Onghaei, told Global News he was the victim of discrimination and had not transferred any money to Canada for the Iranian regime, which he said he does not support.

“It was not for the government,” he said.

The transfers were all for customers who used his company to bring in money from Iran, and Canadian officials could prove no wrongdoing. “They don’t have anything,” he said.

Asked about the case, a CSIS spokesperson said the agency’s most recent public report “highlighted how Canadian communities can be subject to clandestine and deceptive manipulation by foreign states known as foreign interference.”

“Canadians can be assured that CSIS takes any allegation of foreign interference very seriously and uses the full mandate of the CSIS Act in order to investigate, advise, and respond to the threat,” John Townsend said.

The CSIS report, classified Protected, was produced by the CSIS Security Screening Branch after it interviewed Onghaei.

Global News obtained a copy from the Federal Court, where it is among hundreds of pages filed by the government in a case in which Onghaei was trying to secure Canadian citizenship.

The CSIS report also noted the Canada Revenue Agency had fined Onghaei $644,000. The reason for the fine was not explained but CSIS wrote that the amount was later reduced to $195,000, and Onghaei “stated that he has yet to pay any owed moneys to the CRA.”

Onghaei told Global News he had since repaid the CRA.

“On a separate note, Mr. Onghaei stated that, if he were to profit from such a relationship, he would ‘gladly’ work for a foreign intelligence service, notably one from Iran,” the CSIS report said.

In his court appeal, Onghaei argued CSIS “misrepresented the content of its interview with him,” particularly in the paragraphs alleging he had admitted to Iranian money transfers.

Shown the CSIS report, Professor Stephanie Carvin said it was unusual to see financial transactions categorized as a foreign influence activity — which refers to secret meddling by foreign governments in Canada’s domestic affairs.

“So what’s interesting about this is that it’s different from what we would normally associate with financial activity that’s considered to be a national security threat,” said Carvin, a Carleton University national security expert and former government analyst.

“Often when we look at threat financing, we think of Canadians sending money overseas for the purpose of violent extremism.”

Toronto lawyer and human rights activist Kaveh Shahrooz said Tehran was engaged in a foreign influence campaign that aimed to sway Canada’s policy towards Iran.

“The Iranian regime tries several different things. On one level, it tries to intimidate activists so that they’ll stay silent. On another level, I think it tries to influence our policy-makers by making it seem as if a lot of the members of our community want Canada to lift pressure on Iran,” said Shahrooz, a senior fellow at the Macdonald-Laurier Institute.

“And I think it tries to also culturally influence Canadian society through events that seek to normalise the Iranian regime and the horrific human rights situation there.”

He said the matter “should be a major priority for the Canadian government, not just with respect to Iran, but a lot of countries that attempt to influence our affairs here in Canada.”

By Stewart Bell & Sam Cooper, Global News, 24 November 2020

Read more at Global News

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet

FREE CPD Wallet