The Canadian connection - Macleans.ca

The Canadian connection

A Canadian accused of aiding Iran’s nuclear program may be a key asset or a dupe—but his case shows how serious Iran is

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Abedin Taherkenare / EPA

 

Last April, after eight hours in a windowless cell, with a phone to duty counsel as his only link to the outside world, Mahmoud Yadegari finally broke down. The legal aid lawyers had warned him not to talk. Even the Mounties who had arrested him that morning on the porch of his square, beige bungalow in north Toronto repeated their standard cautions that his words could be used against him when his case went to court.

But now, with his head throbbing and his world “falling apart” (his words), the 36-year-old Iranian-Canadian embarked on a wide-ranging conversation with corporals Pete Merrifield and Kelly Helowka, touching on the essentials of the case against him. Over the next hour and a half, with the cell door open and the two officers propped against walls, he spoke of the export business he’d started in late 2008, and the obscure, cylindrical devices called pressure transducers that he’d spent the past five months scouring the continent for. He spoke of a mercurial man named Nima Tabari, whom he’d met during a trip to Iran in 2007, and who had served as his chief business contact in Iran.

According to Merrifield, who offered his recollection in testimony last week, Yadegari said Tabari instructed him to send two transducers to Iran via the United Arab Emirates, in contravention of a host of international and domestic laws aimed at stopping the former country from acquiring nuclear capability.

Like many jailhouse interviews, this one failed the fire test of admissibility. On Tuesday, the judge presiding over Yadegari’s trial in Ontario Provincial Court excluded the chat from evidence, citing concerns over whether it had been, in the strictest sense, voluntary. Yadegari himself took the stand during a voir dire hearing to dispute the police account of the conversation, denying he admitted trying to send the equipment to Iran. It’s the sort of nuance that will prove crucial to Yadegari’s defence: in an agreed statement of fact filed with the court, he admits trying to buy transducers and even trying to ship them; the question is whether he knew the devices were bound to Iran, and what they were for.

Still, one noteworthy remark emerged from the jail-cell chat undisputed. “I came to Canada to get away from Iran,” he told the officers, both of whom later recorded the statement in their notes. “I hated the government of Iran.” Curious, because Tehran doesn’t seem to share the sentiment. In February, President Mahmoud Ahmadinejad included Yadegari on a list of 11 Iranians imprisoned in North America for whom he was willing to swap three U.S. backpackers who are in jail in his country. That was four months before Yadegari became the first person in Canada tried under provisions of the United Nations Act, and Canada’s Nuclear Safety and Control Act, aimed at keeping nuclear technology out of Iran. “There are a large number of Iranians in prison in the U.S.,” Ahmadinejad said during an interview on Iranian state television, apparently oblivious to concerns that he might influence Yadegari’s case. “They have abducted some of our citizens in other countries.”

Is Yadegari a key asset in Ahmadinejad’s unabashed determination to fulfill Iran’s nuclear ambitions? Or is he an unwitting dupe who was out to make a fast dollar, unaware that he was breaking laws that could land him in prison for years to come?

For Clark Settles, an investigator with the U.S. Department of Homeland Security, it doesn’t much matter. Iran, he says, has been known to use either or both when it suits the country’s purpose. As a unit chief with the U.S. Immigration and Customs Enforcement branch, Settles has run dozens of sting operations like the one that resulted in Yadegari’s arrest, and more troubling to him than Yadegari’s value to Iran is how diligently the Torontonian was searching for restricted parts, and what that says about Tehran’s growing audacity when it comes to supplying its nuclear program. “We’ve seen such a marked increase that I’d almost say the Iranians are becoming desperate,” says Settles. “They’re willing to take more chances and reach out to more people. But at the same time, they’re getting better, more sophisticated. And that’s something that should concern us all.”

Yadegari seems an unlikely candidate for the role of secret agent. Tall and angular, he stares with half-lidded eyes through wire-rimmed glasses, sometimes giving the impression of falling asleep. His English is passable, but during a brief stretch of testimony last week without his Farsi translator, he spoke so softly he could scarcely be heard.

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Yadegari’s language skills are pivotal to his defence: he maintains he couldn’t keep up with much of what the police told him on the day of his arrest, and says he had no idea that the devices he was shipping were illegal. Still, he seemed to be getting by pretty well in an English-speaking country.

Four years after immigrating to Canada via Syria in 1998, he enrolled at Ryerson University in downtown Toronto, where he obtained a computer science degree to augment one he’d gotten in Tehran. He held down a variety of data-entry and IT jobs with banks that required him to communicate in English, and in the winter of 2007 he and his wife, Nasim, spent $557,000 on their house in the Toronto neighbourhood known as Little Iran. They mortgaged the property for $673,000. A few months later they had a baby boy.

What they planned to do with the extra cash isn’t clear. But within a year Yadegari had set up an export company called N&N Express, through which he began trying to acquire ball valves and pressure transducers. Both the UN Act and the Canadian Nuclear Safety Act forbid the shipment to Iran of these devices, because they can be used in centrifuges that enrich uranium into weapons-grade nuclear fuel. Emails viewed by Maclean’s suggest Yadegari was told repeatedly by suppliers that the equipment was restricted, yet he continued seeking transducers through the first few months of 2009.

Tabari’s role in all this appears much as described in the excluded testimony: emails obtained by police from Yadegari’s Internet service providers, also viewed by Maclean’s, show Tabari identifying an array of manufacturers and distributors in Canada and the U.S. that might supply the valves and transducers, and encouraging Yadegari to place orders with them. In some cases, Tabari attached JPEG images containing the specifications of the devices he wanted Yadegari to acquire. Most times, Tabari appeared to be guiding Yadegari through the shipment process. “We may face trouble with sending these materials [from] the U.S.,” he warns in one email sent on Jan. 13, adding that Yadegari should “think again” about trying to send goods directly to Iran or through Dubai.

RCMP traces later determined that both the sender of the Tabari emails and the server they came from were located in Iran, according to affidavits filed in court. And the scale of the procurement effort the police uncovered was stunning. Between November 2008 and April 2009, Yadegari contacted some 118 companies and exchanged more than 2,000 emails with suppliers and manufacturers, keeping in touch with Tabari through much of this period.

Trouble was, Yadegari kept running up against conscientious companies. Transducers translate pressure measurements into electronic signals that can then be read by computers, and are used in a variety of non-nuclear equipment, from industrial vacuum pumps to commercial bakery ovens. However, the ones sought by Yadegari meet high-performance specifications necessary to work in centrifuges, and are made by firms who aren’t about to risk tens of millions in fines by breaking UN regulations their countries have signed onto.

Same goes for a certain type of ball valve Yadegari spent the first two months of 2009 trying to find, and have shipped directly to Iran. “Cameron Valves and Measurement must decline to quote this request for goods destined for an embargoed country,” wrote one Edmonton-based distributor to Yadegari in an email on Feb. 17. Three days later, a sales rep for Samson Controls Inc. Canada in Markham, Ont., refused the same order, citing “UN rules and restrictions.”

By then, Yadegari was trying a new tack, telling suppliers that his client was a Dubai-based company called Keft Trading (the UAE, explains Settles, is a heavily used way-station for material heading into Iran because of its weak export controls). In mid-January, he engaged in a deal that would unleash a world of grief on himself, ordering 20 transducers from Pfieffer Vacuum, a German-based company with North American offices in New Hampshire. Five weeks later, he couriered Pfieffer two cheques worth $26,319.80.

Alas for Yadegari, Pfieffer asked him to supply “end-user certificates”—government forms certifying that the devices wouldn’t be sent to a banned country, and that the materials wouldn’t be used to make nuclear weapons. Yadegari responded with a note on his own company’s letterhead claiming the transducers were going to Denmark. When Pfieffer rejected that document, he sent another form—apparently homemade—which bore the name Keft Pharma Co., along with a crudely fashioned corporate logo. The document was no end-user certificate: RCMP believe Yadegari merely cut and pasted text from a sample certificate Pfieffer had sent him, along with the logo of a Chicago-based pharmaceutical company, Dik Drugs.

The odour surrounding the transaction became too much for Pfieffer. Citing in-house rules against shipping to the UAE, a sales manager advised him, “We will not be able to process the order and thereby will be returning the cheques you supplied to us.” Maclean’s has since learned that Pfieffer then tipped off Homeland Security, setting in motion the RCMP operation that would lead to Yadegari’s arrest. A Pfieffer representative in New Hampshire declined to comment.

Undaunted, Yadegari went on with his search, and in mid-February he stumbled across a method that might have worked had the Mounties not been watching. Alpha Controls, a Markham, Ont., distributor located just a 10-minute drive from where he worked, was prepared to fill an order for 10 transducers made by a Massachusetts company called Setra. In this case, say police, Yadegari told neither Setra nor Alpha the devices were bound for export. So neither requested end-user certificates. On Feb. 23, the transducers arrived at Yadegari’s house, where RCMP say he peeled the labels off them in contravention of export regulations. Nine days later, he drove his red Mazda to DHL Express couriers in Markham, where he dropped the transducers off for shipment to Dubai.
Afterwards, one of the RCMP officers trailing him came to the counter to view the package. According to a court affidavit, Yadegari suddenly reappeared. There, with the Mountie nearby, he corrected a mistake he’d made on the shipping labels. He nodded, turned on his heel and left the building.

Exactly what kept Yadegari on the job is known only to him, but the rewards were great—at least in theory. Invoices to Keft Trading recovered during the RCMP search of his house suggest he’d marked up the price of the Setra transducers by nearly 270 per cent. If he’d managed to ship all 10, he stood to clear more than $18,500. And when they arrested him on the front porch of his house on April 16, Mounties found a wire-transfer receipt from a Persian money exchange not far from his home, where he’d picked up $25,000.

If found guilty, Yadegari would hardly be the first person drawn into trouble by Iran’s insatiable hunt for nuclear equipment. Nearly 70 per cent of the export- and embargo-related prosecutions in the U.S. over the last two years have involved Iran, according to a Justice Department report last month, while the German government recorded 40 attempts between August 2008 and 2009 to obtain pressure transducers for shipment to Iran. Similar efforts have been reported as far abroad as Hong Kong, Jordan and Taiwan.

The trade was easy to foresee: Iran’s known nuclear-enrichment plants contain between 5,000 and 20,000 centrifuges; at the very least, say nuclear experts, they would need at least one transducer for every two centrifuges. What’s more, the very caustic environment inside centrifuges shortens the working life of each transducer, notes Settles. “You can see why they need so many of them.”

The result has been a trial by fire for the international covenants meant to contain Iran’s nuclear ambitions, and the domestic authorities in charge of enforcing them. “I think in Canada the sense was that this couldn’t happen here,” says David Albright, head of the Washington-based Institute for Science and International Security. “In fact, Canada’s proximity to the U.S., where much of this equipment is made, makes it a no-brainer.” The RCMP’s Merrifield is particularly worried by the gap in the law that allowed Yadegari to purchase the devices, no questions asked, as long as he didn’t say he would export them. “It’s a huge concern,” he said in an interview. “But this is one of the problems with items that have other legitimate applications. How do you control them for export without interfering with domestic trade?”

More troubling has been the sense that not all countries care to bring suspected violators to justice. Last week, France refused to extradite a 37-year-old Iranian to the U.S. to face accusations that he shipped transducers, among other material, to Iran via Malaysia, allowing him instead to return to the safety of the Islamic republic. Malaysia only last year passed laws instituting export controls on the restricted equipment. The UAE introduced controls but experts complain they are not yet effectively enforcing them.

Still, if Yadegari’s experience is any guide, running afoul of the rules comes at steep personal cost. The day after his bail hearing, Yadegari’s wife and son boarded a flight for Tehran, police sources say, and he hasn’t seen them since. The bank foreclosed on his home a few weeks later, selling off the stove and fridge before putting the house on the market. Last week, Yadegari arrived at the courthouse each day wearing his only worldly possessions; a pair of black slacks and corduroy jacket that the Mounties retrieved from his closet the day he was arrested.

Today, the middle-aged Iranian man living in Yadegari’s old house looks anxious as he opens the door. But at the mention of the previous owner, he goes back inside for a stack of unpaid bills and collection notices, nodding as he listens to the story of the man to whom they’re addressed. “Maybe he thought he could make easy money,” shrugs the occupant, who declines to give his name. “But that’s the trouble with easy money. It can get you in a whole lot of trouble.”