Last updated: 10 October, 2011

Iran arrests 14 more in bank fraud probe: reports

Iranian officials have arrested 14 more people as part of a probe into a vast, recently uncovered bank scandal and announced they had recovered a quarter of the 1.6 billion dollars allegedly embezzled, reports said on Monday.

“In the past three days, 14 more people, including bank managers and others linked to the case, have been temporarily detained,” Iran’s prosecutor general, Gholam Hossein Mohseni Ejei, was quoted as saying by the ISNA news agency.

Mohseni Ejei also called on the former head of the state-run Bank Melli, Mahmoud Reza Khavari, to return to Iran from Canada where he had flown after resigning as the scandal became public.

“Should the former Bank Melli chief fail to return to the country, the judiciary will issue a warrant for his arrest,” the prosecutor general said, according to the Mehr news agency.

Khavari’s bank was one of several allegedly involved in the scandal, which was initially estimated to involve graft of around 28 trillion rials (around 2.6 billion dollars).

Economy Minister Shamseddin Hosseini on Monday revised downwards the total figure to 17 trillion rials (around 1.6 billion dollars), the Fars news agency reported.

He also said 25 percent of that sum had been recovered.

“We are in the process of getting back the remaining seventy-five percent, which is around 13 trillion rials (1.2 billion dollars),” Hosseini said.

He added that the government had confiscated assets connected to a private group involved in the scandal worth an estimated four billion dollars, and that there was no concern about recovering the embezzled money.

The fraud, which local media have labelled the biggest ever in the country, allegedly saw the private group amass trillions of rials through forged letters of credit approved by half a dozen Iranian banks.

The controversy intensified when media opposed to President Mahmoud Ahmadinejad published a letter attributed to his chief of staff and principal adviser, Esfandiar Rahim Mashaie, in which he reportedly asked the economy minister to facilitate the group’s operations.

For the past several months, Mashaie has been the target of a fierce campaign led by hardliners in the ruling conservative camp, which accuses him of leading a “deviant” movement to undermine the regime’s principles.

On September 14, Ahmadinejad slammed the attacks as a “propaganda” campaign by his enemies, and asked the judiciary to hand over the scam probe to “honest” people.