According to Iranian government newspapers and TV channels, the fraud was planned within seven state-

owned and private banks, including Saderat Bank of Iran,[4] and is the largest and most important fraud in
Iran history.[5] The fraud reportedly was first identified at Bank Melli, Iran's largest commercial bank.[1]
According to The New York Times and The Washington Post newspapers, the embezzlement was a "scheme
to use forged documents or letters of credit to acquire assets, "including major state-owned companies" or
"privatized government assets",[6] (such as the Khuzestan Steel Company, a major steel producer [3]) at "one
of Iran's top financial institutions", Bank Saderat.[2]
According to government media, the economics ministry tipped the intelligence authorities about
suspicious loan applications in the banking system and the main culprits are as of May 2014 in police
custody.[7]
Iranian state prosecutor Gholam-Hossein Mohseni-Eje'i said 19 people have been arrested for being
involved in a bank embezzlement scandal. [8] The Washington Post reports 22 suspects "including
businessmen and bank officials" have been arrested, and the chiefs of two banks have been dismissed. On
27 September 2011, Mahomud-Reza Khavari abruptly resigned as the managing director of Bank Melli
and flew to Canada after the bank was implicated in the fraud. However, a spokesman for the bank stated
that Khavari had gone to Canada for "ordinary business reasons". [6] According to the Globe and Mail, a $3
million house in Toronto, is owned in Mahmoud Reza Khavari's name. [9] According to the Iran News
Update, in 2005 Khavari became a citizen of Canada allegedly. [10]
The investigation determined that Mahafarid Amir Khosravi had masterminded the scheme, with his Aria
Investment Development Company being the primary recipient of the loans. Khosravi was convicted
of embezzlement, money laundering, and bribery. He and three of his closest associates received the death
penalty in July 2012.[11][12] A total of 39 people were convicted of fraud in the case. On 24 May 2014,
Khosravi was executed by hanging. Khavari remains a fugitive. [12] However, Khosravi’s lawyer said that
he was made unaware of Khosravi’s execution, according to IB Times. [13] According to BBC, Iran Chief
prosecutor said that two other defendants were sentenced to life in prison, whereas 33 more are to spend
25 years jail.[14]
Mahmoud Reza Khavari in 2011, took to safety in Canada as reported by Arab news. Furthermore,
Khavari has been sentenced on four charges to a cash fine, compensation and a long prison term. [15]