OTTAWA – In April 2012, a salesman in Vancouver wrote to his partners in China with a proposition.
As The Bureau reported this week, the Iranian immigrant was describing the outlines of a trade-based money laundering architecture that enables Tehran to mount its missile and drone war machine using American technology, evading United States sanctions through clandestine Chinese trade networks operated through third parties worldwide, and prominently, set up in Canadian business networks.
Since China bought Iranian oil, the salesman suggested, his company could handle the trade and settle the bills out of the oil money China already owed Tehran.
The Canadian businessman, whose father was a wealthy man in Iran, was eventually arrested at the border crossing in Blaine, Washington, in March 2017, and sentenced in Seattle for conspiring to export restricted U.S. technology to Iran’s Department of Defense through front companies in China.
Among the goods that reached Tehran were 110 thermal imaging cameras built in Oregon, shipped first to China, of a type prosecutors said can be used in military drones.
Guermantes Lailari is a retired U.S. Air Force foreign area officer, now a geopolitical analyst in Taipei, who studies irregular warfare and the alignment analysts call the red-green alliance, between Communist states and Islamist movements.
He has been in discussions with The Bureau on his global research into China’s support for Iran, which he assesses as fundamental to the Revolutionary Guard’s ability to threaten the West, directly and through proxies including Hamas, Hezbollah, and the Houthis.
“China serves as the ultimate economic, industrial, and intelligence backbone of Iran’s war machine,” Lailari said.
The financing runs through oil.
By Lailari’s assessment, China purchases roughly 90 percent of Iranian crude, much of it through the independent refineries known in the trade as teapots, injecting a U.S. dollar equivalent of $31.2 billion a year into Tehran through yuan-denominated transactions.
The procurement side has historically run through the same global underground banking hub jurisdictions, Dubai and Hong Kong, that appear on the other end of numerous Canadian case files in Vancouver and Toronto, where dozens of Iranian diaspora cash houses are watched by Canadian police agencies, a key factor exposed in the trial of Royal Canadian Mounted Police intelligence mole Cameron Jay Ortis.
“To evade tracking, Iranian-controlled ‘rahbar’ front companies historically deployed a multi-layered shadow banking web spanning Hong Kong and the UAE to securely procure sensitive military hardware,” Lailari said.
That back door narrowed sharply on August 18, 2026, when a total economic embargo closed the United Arab Emirates as a clearing house. Tehran has changed routes.
“Forced to adapt, Tehran has bifurcated its logistical channels to maintain access to Chinese military tech,” Lailari said. “Tehran bypasses this bottleneck by smuggling sensitive microelectronics overland through Central Asian rail networks, while routing heavy solid-fuel chemicals and metallurgy through maritime barter corridors straight to its weapons factories.”
Iranian cargo vessels load thousands of tons of Chinese chemical precursors, sodium perchlorate for solid-fuel propellants above all, alongside advanced aerospace metallurgy, directly from Chinese industrial ports and carry them home.
What that supply chain produces is not only propellant. Lailari points to a $70 million deal for Chinese QW-12 and FN-16 man-portable air-defense missiles, to the targeting data available through China’s BeiDou satellite network, and to a Chinese TEE-01B reconnaissance satellite he says Iran acquired in secret.
“Supplemented by China’s BeiDou satellite network, a secretly acquired TEE-01B spy satellite, and a $70 million MANPADS deal, Iran and its proxies—Hamas, Hezbollah, and the Houthis—wield optimized precision weapons,” he said. “By executing rocket-minelaying inside the Strait of Hormuz, Tehran actively chokes vital arteries controlling 20% of global oil consumption.”
The Canadian question is what any of this has to do with fentanyl money laundering, transnational repression, human trafficking, the targeting of the U.S. consulate and Jewish congregations in Toronto, or the penetration of Canadian police agencies by figures tied to Iranian and Mexican cartel networks.
The Ortis case, which The Bureau covered from the hearings in Ottawa, and which Ortis is appealing, surfaced some of those connections in more detail than any Canadian proceeding before it.
The State Department’s International Narcotics Control Strategy Report describes the money laundering organization run by the Pakistani national Altaf Khanani as a transnational criminal group that facilitates illicit money movement between, among other places, Pakistan, the United Arab Emirates, the United States, the United Kingdom, Canada and Australia, and that launders billions of dollars in organized crime proceeds annually.
Its clientele, the report states, includes Chinese, Colombian and Mexican organized crime groups, along with individuals associated with Hezbollah and designated terrorist organizations. It moved funds for the Taliban. Khanani himself is described as having had relationships with Lashkar-e-Tayyiba, Dawood Ibrahim, al-Qaeda and Jaish-e-Mohammed.
The Treasury Department said the same thing when it designated the organization in November 2015. The State Department said it again the following year, and again the year after that. Canada appears in the list of countries every time.
The RCMP investigated the network in the Greater Toronto Area under the code name Project Oryx. A force intelligence report from September 2014 named Khanani as the man believed to head the syndicate. Khanani was arrested in Panama, prosecuted in Florida, and sentenced to 68 months.
Ortis was convicted of attempting to pass secrets to Farzam Mehdizadeh, who moved about $460 million through a Toronto exchange over a decade, sat on a Canadian Security Intelligence Service watch list, and was the target of a Mounted Police counter-proliferation investigation. Mehdizadeh also ran a company trading specialized ceramics, plastics and metals. Asked at trial what those materials were for, Ortis answered: “The primary use of those technologies is in weapons development programs.” Mehdizadeh went home to Iran in 2017, before Canadian charges could reach him. An RCMP witness testified that investigators believed Ortis was trying to reach Khanani himself.
Iran International reported this week that the Iranian financial network runs wider than the one Washington has sanctioned.
Working from leaked correspondence of an Iranian bank already under U.S. sanctions, covering November 2022 to May 2023, the outlet identified 15 banks in China and the United Arab Emirates that moved money for Iran. Thirteen have faced no U.S. enforcement, and only two were touched by the August campaign. The letters moved funds through what the records call trustee accounts and what the Treasury Department calls rahbar companies, the structure Lailari describes.
Seven of the banks were Chinese, and the beneficiaries were mostly general trading companies registered in Hong Kong and Singapore that banked on the mainland. None of those seven has faced U.S. enforcement over its dealings with Iran. Across 33 instruction letters worth about $36 million, the largest share moved in dollars. Iran International found no evidence that the banks in China or the United Arab Emirates knowingly helped Iran evade sanctions.
Lailari describes a system engineered to survive the loss of its banks.
Canada’s exposure is that the structures carrying Iran and China’s underground economies were in place here long before any bank closed, and Canadian agencies have watched them for years without a single operator being convicted.
