February 07 2020
Three Iranians entwined in a million dollar fraud case involving the City of Saskatoon in Canada say they are innocent victims, just like the city.
In August, the city, which is the capital of Saskatchewan province, received an email from someone claiming to be the chief financial officer of a contractor used by the city and requesting a change in where payments were deposited.
Nearly 1.04 million Canadian dollars (US$800,000) was then deposited in a TD Bank account. The fraud was uncovered when the company, Allan Construction, contacted the city asking why it had not been paid.
The money had instead been deposited into a number company — 2677367 Ontario Inc. The account was operated by an Iranian, Ali Ziloubaf, who ran a money services business out of that account, Ontario Superior Court Justice J. Penny wrote in his decision.
Justice Penny said Ziloubaf dispersed more than 90 percent of the Saskatoon money to other people or entities. That money has now been recovered and returned to the city of Saskatoon.
The justice said Ziloubaf’s “money services were offered as a workaround of the embargo on financial dealings with Iran and the restrictions on taking money out of Iran”—in other words, to evade both Canadian law and Iranian law.
Ziloubaf said he had met with someone named Gavin Kolner after being told by a person in Dubai, whom he had never met, that Kolner would deposit $1 million into an account controlled by Ziloubaf. Ziloubaf said the only time he met Kolner was briefly on the street for a signature before the money was deposited into the numbered account.
Ziloubaf testified that he accepted a photocopy of Kolner’s passport as proof of identity and also said he never noticed that the million-dollar deposit he received came from the City of Saskatoon
“Leaving aside entirely whether the evidence supports an inference he [Ziloubaf] was complicit in the fraud, it at least supports the inference that he was willfully blind to it,” Justice Penny wrote.
The trial was not a criminal case about the fraud but rather a suit brought by two Iranians who had received payments from Ziloubaf that had been taken away from them by the court and retuned to Saskatoon.
Justice Penny said the two Iranians—Mohammad Abazari and Ibrahim Bangura—could not claim the money from the city of Saskatoon’s funds but should deal with Ziloubaf.
It still is unknown who emailed the city and asked that the construction company’s payment go to a new account. It also remains unknown who is Gavin Kolner.
The city, meanwhile, says it has disciplined “fewer than five” staffers who followed up on the email without verifying that it was legitimate.
