Halifax man charged with violating Syria sanctions continues to conduct business in war-torn country

A Halifax man who is the first person charged with violating Canada's economic sanctions against Syria is back in Damascus doing business there, CBC News has learned.

Nader Kalai — a Syrian national with permanent residency in Canada — is known to be a close associate of Syrian President Bashar al-Assad and his loyalists.

"He is quite a powerful person within the Syrian regime system," said one Syrian analyst, who asked to remain anonymous out of fear of reprisal. "He is very well-connected."

Kalai is facing one charge under the Special Economic Measures Act (SEMA) tied to a payment of 15 million Syrian pounds — or about $140,000 — to a company called Syrialink on Nov. 27, 2013, according to court documents filed in June.

The near-two-year investigation that led to the charge is detailed in documents sworn by a Canada Border Services Agency investigator.

They also outline the fact that Canada Revenue Agency is investigating Kalai for tax evasion and failure to report hundreds of thousands of dollars in income.

Kalai is expected to be formally arraigned in a Halifax court on Aug. 20.

Hotel renovations

Kalai owns and operates ongoing businesses in Syria, including running and renovating the five-star, government-owned Ebla Hotel in Damascus. He won the contract to manage the property just over a year ago, according to The Syria Report, a newsletter that tracks Syrian business.

According to the same publication, he is also involved in helping the regime with a $326-million reconstruction project in a Damascus neighbourhood destroyed during Syria's ongoing civil war.

Despite the charge and investigations, multiple sources told CBC News that Kalai has returned to Syria to conduct business in the country.

The CBSA has confirmed that its investigation into Kalai is ongoing. There are currently no restrictions on his ability to travel outside Canada.

CBC News reached out to Kalai via telephone and email but received no reply. When previously contacted in November 2017, before he was formally charged, Kalai told CBC he did not want to speak about his business interests in Syria.

"I cannot talk with a person I don't know," Kalai said at the time, before requesting that CBC send questions via email, to which he did not reply.

Majd Jadaan, a former sister-in-law of Assad who is now living in exile in the United States, describes Kalai as being part of the Syrian president's "inner circle" who is helping to make investments for the regime. Canadians should know who is living in their midst, she said.

"[Kalai is] helping a dictatorship to destroy a country to make tens of millions of refugees," she said.

While Kalai does have business interests in the region, they are not necessarily in violation of sanctions.

Court documents filed to obtain search warrants for Kalai's home, business and accountant's office outline the CBSA's allegations and investigation, including a claim that Kalai was making false statements to Citizenship and Immigration Canada about his work history.

"By concealing his work history, Kalai was improperly granted a Canadian permanent resident card," CBSA investigator Jason Cannon wrote.

"I believe Nader Kalai is working for numerous businesses abroad, which he has not declared to the Canadian government.  Also, I believe Nader Kalai has been conducting business with individuals and entities which are subject to economic sanctions by the government of Canada and has been operating business in Syria."

Warrants against Kalai were executed in 2016 and 2018.

One of the individuals named in the court documents is Rami Makhlouf, the cousin of Assad, who is considered one of Syria's wealthiest and most powerful men. Before moving to Halifax with his family in 2009, Kalai was the CEO of Makhlouf's mobile phone company, Syriatel.

The documents also contain allegations by Kalai's cousin, Walid Kalai, of money laundering. The claims were said to have been emailed to the Canadian embassy in Vienna in June 2016.

"For many, many years, Mr. Nader Kalai has been laundering money," reads the email quoted in the documents. "[He] owns a fleet of cars and a collection of paintings and jewelry of great value."

According to the documents, Walid Kalai alleges his cousin has about $200 million US worth of assets scattered around Syria, Lebanon, Egypt, the United Arab Emirates, Austria and the United Kingdom, along with a monthly income of approximately $250,000 US.

Separate CRA probe

Kalai's income is the focus of a separate CRA investigation, based on search warrants for Kalai's financial records that were executed in May.  

In an affidavit filed to secure the warrants, CRA investigator Natalie Critch wrote she has "reasonable grounds" to believe Kalai did not report income of $851,269 between 2013 and 2016.

Critch cites financial records and messages from Kalai's email accounts showing what she calls "significant purchases" between 2013 and 2016, including a 2015 Jeep Wrangler, a 2016 Dodge Ram truck, a Corvette Stingray and a payment of just over $15,000 to New Jersey-based Beacon Hill Stables for horse expenses.

None of the allegations in the documents used to obtain the search warrants has been proven in court.

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Kalai, his wife, their six children and his mother-in-law all reside in Halifax. Aside from Kalai and his mother-in-law, all other family members have Canadian citizenship.

Kalai runs a telecommunications consulting company, called Telefocus Consultants Inc., out of the family home on Young Avenue in the city's south end.

Canada has had formal sanctions in place against Syria, a number of high-ranking Syrian officials and a handful of Syrian businesses since 2011 — a response to the regime's use of violence against its own people, including apparent chemical weapon attacks.

The sanctions are intended to isolate the regime by restricting the flow of investment and cash into the war-torn country. The maximum penalty for violating sanctions is a five-year prison term.

Some of the targets of various international sanctions against Syria have direct links to Canada. They include:

• Canadian citizen Nizar Assaad, who is subject to European Union sanctions.
   
• Mazen Al Tarazi, another Canadian and well-known international businessman based in Kuwait, who is launching an airline in Syria and recently signed two large development contracts in Damascus worth several hundreds of million dollars. He is on the U.S. sanctions list.
   
• France has sanctions in place against Nazier Mohammad Houranieh, Chadi Houranieh and Hwaida Houranieh — all Canadian citizens — for their alleged links to Syria's chemical weapons program. According to a recent article in French newspaper L'Express, the Houraniehs deny any ties to chemical weapons and say the sanctions are based false accusations or misinformation.
   
• Syrian national Mohammad Hamsho is on many international sanctions lists, including Canada's. He owned both a business and a home in the Toronto area at one time, but his current holdings are unclear.

While Hamsho resides in Syria, the location of the others is unknown.

The anonymous Syrian analyst said he supports sanctions against those who collude with the Assad regime and its brutality against its own people.

"If you help the regime, directly or indirectly, or people who finance the regime, repressing the population, they should be put under sanctions," he said.  

"They will reap most — if not all — of the benefits, and the losers are obviously the Syrian society at large."

Laura Lynch and Sylvène Gilchrist can be reached via email at: Laura.Lynch@cbc.ca and Sylvene.Gilchrist@cbc.ca.