So, when he fell from his trademark sartorial splendour to the light-blue uniform of Iran’s notorious Evin Prison, the contrast was harsh.
In November 2019, Monfared was convicted of embezzling millions of dollars from his country, just one of the strands in a global web of financial, diplomatic and personal fraud that saw him sentenced to 20 years in prison and a $1.3bn fine.
Monfared‘s natural charisma and hustle had taken him far. From humble beginnings in the home decoration business, he had rocketed to success: banker, international oil trader and, finally, “His Excellency Dato Ali Reza Monfared“, Dominica‘s ambassador to Malaysia.
A charismatic outsider
“You would practically fall in love with him because he is such a sweet talker. Ali can convince anybody into doing anything,” said Manoj Bhullar, the owner of a marine logistics company on Labuan. He refers to Monfared as “Ali” because they were once best friends.
I first heard about Monfared in the summer of 2018. I was interested in the sale of diplomatic passports in the Caribbean and had started gathering sources through a contact connected to Bhullar‘s wife, Kiran. She and her husband had been swindled by Monfared and Kiran would text me long threads about their quest for justice.
Her story was compelling, so I asked to meet in person. But while it was clear she wanted to speak, she seemed reluctant to meet.
She eventually agreed, but made no promises. So, with correspondent Deborah Davies and cameraman Manny Panaretos, I travelled to Kuala Lumpur without a guarantee of an interview.
We met the Bhullars for lunch at a shopping mall.
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“You draw up a mental picture of the people you’re going to meet,” Davies said afterwards. “[Then] in walks this really stylish, charismatic, fabulous-looking couple.” It was easy to see how the Bhullars would have fit in with Monfared‘s glamorous lifestyle.
But that was not what happened.
As our meeting entered its third hour, the conversation turned to Labuan. I told them I had often heard it described as the Cayman Islands of Asia, because of its flexible financial rules and many shell companies. I had wanted to visit but had been told that, as a reporter, it would be impossible.
Labuan is the best natural harbour in Borneo. In fact, it means “harbour” in Malay. That is why people have been fighting over it for years. The Japanese took it during the second world war and many Allied soldiers died trying to recapture it.
“My granddad, he was involved in the Punjab Regiment Sixty-seven of them were sent into Labuan to fight the Japanese all by themselves. Only four survived. My granddad was one of them,” he explained.
His grandfather decided to stay.
“From a young age, dad got us interested in the sea,” he explained. “He had a boat. He would ask us to jump off this wharf here and we had to swim all the way to the island up there.”
It was Bhullar who offered him a solution. He had learned of a small loophole, or at least an untested area, in the law: If oil was stored offshore for a certain period of time, it ceased to be oil from the country of origin and became “Malaysian” oil. And there were no sanctions on that.
“Ships would come in from Iran We had oil tankers parked right outside here. The mother tanker would come in, discharge their oil onto our tankers and they would go off and we would have oil stored all off on the bay here,” Bhullar explained.
“Each tanker would bring in one million to two million barrels.”
A small-town financial hub
To understand the tangled relationships that ruined the Bhullars’ lives, it helps to understand Labuan.
First of all, it is small – about 93 square kilometres (36 square miles). The southern half of the island is the most developed, with a few high-end hotels that host oil workers and international businessmen. Overlooking the harbour, in the centre of the downtown area, is a towering financial complex that is home to more than 6,500 offshore companies.
It is an ideal location for an operator like Monfared: It is out of the way, the island’s economy is heavy on international finance, oil and gas, it has a low tax rate and it operates under the protection offered by Malaysia, meaning that it benefits from Double Taxation Agreements – an assortment of tax exemptions – signed with 70 other countries, according to consulting firm Dezan Shira Associates
It is simultaneously a financial hub and a small town.
I kept thinking why should you be afraid, if you’re not guilty?
But as the outlines of the oil scheme and embezzlement became clear to the Bhullars, they understood that their friend was in trouble.
By the summer of 2014, Monfared had temporarily relocated to Spain. Still, the Bhullars remained close to him and, in August, the two families holidayed together in Panama. It was during that holiday that Monfared proposed that he and Bhullar take a quick side trip to the Commonwealth of Dominica.
Dominica is an island in the Lesser Antilles – a vertical strip of eastern Caribbean islands that cascades towards South America. It is volcanic and wild, with steep peaks jutting dramatically out of the sea. But lacking the picture-perfect beaches of its neighbours, it struggles to attract tourists and is one of the poorest countries in the region. It is also one of those least touched by development.
It can take roughly 90 minutes to reach the country’s capital, Roseau, from the airport. Winding through the narrow mountain roads, Bhullar said he was impressed by the tropical air and lush scenery. It reminded him of home. But, while he was still in holiday mode, Monfared was all business, preparing for a meeting the following morning with the country’s Citizenship by Investment (CBI) minister.
Monfared‘s goal was to secure citizenship for his family. It is perfectly legal and very common, usually costing between $200,000 and $300,000. The money either goes to private projects, like hotels, or to infrastructure. It can be a huge source of revenue for small Caribbean islands.
“I just told Ali ‘In your meeting what they will ask you is simple, what benefit are we going to get from giving you the citizenship?'”
In his meeting, Monfared floated several investment ideas, including aquaculture and geothermal energy projects. All of this came with the promise of strong business and political ties to the Malaysian government.
“I said ‘Why, what’s happening?'”
“He said, ‘I’ve said what you asked me to say and they’ve asked me to explain. I know nothing to explain and I’ve informed them that my business partner is here, he will explain to you.'”
“He said ‘Why don’t you be our ambassador at large?'”
Prime Minister Skerrit told Al Jazeera that he has no memory of this meeting.
According to Bhullar, the following morning, he and Monfared had breakfast with the CBI minister, Emmanuel Nanthan. Bhullar recommended Monfared for the ambassador post and Nanthan seemed satisfied with that, as long as it brought much-needed investment to the island. The final decision on such matters is up to the prime minister, however.
Bhullar showed us a large green book that detailed the brief but storied history of a company so notorious it would one day become the title of a political protest calypso song. The glossy photos inside showed a series of fancy receptions for prominent Dominican delegates, smiling and toasting with a beaming – and impeccably dressed – Monfared.
It was not long before Monfared bought a property befitting his new role as a prospective ambassador. The Bhullars say it was paid for by the company. Located on a lake in an upscale neighbourhood of Kuala Lumpur, it would become Monfared‘s embassy.
By mid-October 2014, Monfared had received his official application for a diplomatic passport and, shortly after, requests started to come in for payment. The point person for this was Minister Nanthan.
On October 29, 2014, two emails arrived with two invoices for help with Skerrit’s upcoming election campaign. One was for $85,000 to print the party’s manifesto. The other was for $115,000 for billboards, a sound system and fireworks.
But they were not all campaign-related payments. In November, Nanthan asked for another $200,000.
Bhullar was in charge of arranging the payments and recalled how there was a delay to this one. “We had a problem to transfer the money into his company’s account, which is the petrol service station in Dominica,” Bhullar said. “It took us almost four to five days.”
Nanthan was annoyed when the money did not arrive on time. In an email, he wrote: “I am still waiting on routing instructions. This is taking forever. I must say this lacks the efficiency displayed to me by Dato Ali and his organization. I am extremely disappointed.”
There are plenty of pictures of Nanthan in the big green book.
The appointment raises questions, not only because it happened immediately after an election he helped pay for, but also about the due diligence the Dominicans carried out because by this point Monfared‘s business partner, Zanjani, had been arrested and the First Islamic Investment Bank, of which Monfared was the authorised signatory, had been sanctioned by the US and the EU.
The next step was to plan the biggest party yet, to welcome the prime minister to Malaysia. Skerrit wanted the company to pay for him to travel to Malaysia and then on to meetings in China by private jet. Monfared agreed.
In March 2015, Skerrit touched down in Malaysia. No expense was spared. He was picked up from the airport in a Rolls Royce. The reception for him featured champagne, catered food and a jazz band. It was there that Skerrit handed Monfared his diplomatic passport.
One night at the My Dominica Trade House offices, Monfared had his first opportunity to test the power of his diplomatic passport. The police responded to allegations of drug use at a party in the office.
Bhullar recounted how he watched as two police vans with about 20 officers in them pulled up outside. According to Bhullar, Monfared hid behind a door, waving his diplomatic passport and saying: “You can’t arrest me, I’m a diplomat.”
In addition to giving him a newfound sense of invincibility, the Bhullars said the passport seemed to encourage all sorts of erratic behaviour.
The ducks, she said, would roam through the neighbourhood. “Complaints kept coming in, non-stop.”
Monfared decided to save himself by betraying his friend. He sold the property – which the Bhullars say belonged to the company – and, using his diplomatic passport, escaped to Dominica, leaving the Bhullars with his debts.
The police said, ‘Oh we couldn’t go into the room. He’s a diplomat This is out of our jurisdiction.’
In Dominica, Monfared quickly overstayed his welcome after his lavish lifestyle ran up unpaid bills. After six months, he left for the Dominican Republic, where he hid out at a beachside resort town called Boca Chica.
Back in Malaysia, the Bhullars had heard that Monfared left Dominica, but no one knew where to. Then, one day, Bhullar noticed that Monfared‘s Malaysian lawyer had posted on Facebook that he had checked into a resort in the Dominican Republic
“I sent [a local cab driver in Boca Chica] some money. I said, ‘Here you go, $200, go up to this resort and see if you find a guy by the name of Ali Reza Monfared, an Iranian man,'” Bhullar explained.