As reported by Katia Dmitrieva of Bloomberg News
, court records noted that Sam Mizrahi received the call from Mahmoud Reza Khavari, a fraud fugitive wanted since 2011 for his suspected involvement in the largest scam in Iran’s history, while working on two luxury condominiums in midtown Toronto.
The man had a central role in the development project as a major financier and as the father of Mizrahi’s business partner Khashayar Khavari, court documents revealed.
Khashayar (along with his brother-in-law) and Mizrahi previously collaborated as executives in the latter’s company.
On his part, Khashayar alleged that Mizrahi defrauded him and his father of at least $105 million and stakes in various other projects. He added that Mahmoud is a “mild-mannered” person who never makes threats.
Per court records, Khashayar went on to allege that Mizrahi subsequently admitted to mismanagement of the projects, but was then locked out of Mizrahi’s office when he asked for recompense for his equity stake. Khashayar also accused Mizrahi of embezzling project funds for his own use, including an executive jet, a custom cottage, and the tuition of one of his children. Mizrahi denied the charges, saying that these were based on false information.
Mizrahi countered that while Khashayar and Mahmoud provided capital for projects, they are only entitled to 50 per cent of profits upon completion of the buildings, as they originally agreed upon. The developer in turn sought $50 million in damages due to intimidation, defamation, negligence, and breach of contract, to name a few. The father-and-son duo contested these claims, as well.
As of press time, both parties have yet to make additional comments on each other’s allegations. They are slated to appear for a hearing of the main lawsuit on July 29.
Bank of Canada optimistic of continuous emergence from slump
The Toronto market investors may want to target
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Last year, a renowned property developer who was in the middle of a major project in Toronto allegedly received a call from an individual who threatened to burn his house and ruin his reputation if various demands, including permission for the encashment of checks worth millions of dollars, weren’t met.