Canadian officials have accused a Toronto-area used car dealer of laundering money for the Iranian-backed terrorist group Hezbollah.
Fahed Sowane, a 57-year-old Lebanese citizen who came to Canada on a work permit in 2016, has denied the allegations.
But in heavily-redacted court records released to Global News, the officials called the Mississauga, Ont., resident a “danger to the security of Canada.”
A veteran auto trader, Sowane has exported Audi, BMW and other vehicles to the Hezbollah-controlled port of Beirut, the highly-classified documents allege.
Immigration officials concluded the shipments amounted to “money laundering to benefit Hezbollah,” according to the files.
As a result, the officials found Sowane inadmissible to Canada, meaning he is not allowed to remain in the country.
The Federal Court upheld the decision last week.
A former Canadian intelligence analyst who specializes in terror finance said high-end auto exports were a “very well-known Hezbollah financing technique.”
To move cash across borders, Hezbollah uses it to buy vehicles, which are sent to Lebanon and resold, said Jessica Davis, president of Insight Threat Intelligence.
“What this means is that money is moving from Canada to Lebanon but without ever touching the banking system,” the former Canadian Security Intelligence Service official said.
“And this is important because banks are actually pretty well equipped to detect money laundering and terrorist financing. And so this is a way that criminals circumvent all of those safeguards that we put into the financial system.”
The Canada Border Services Agency did not respond to questions about the matter. Sowane’s lawyer said his client was disappointed by the court’s ruling.
In emails to Global News, Dan Miller said the immigration officials on the case “could offer no evidence of any conduct of concern.”
He disputed the government’s claim that Sowane had exported vehicles to Beirut for less than he paid for them — a flag for money laundering.
Sowane’s “frustration is made all the worse because the Canadian government allows hundreds of Iranian Revolutionary Guard Corps members to reside freely in Canada, a group which he strongly opposes,” Miller added.
“Similarly, each weekend pro-Hamas supporters gather freely at the intersection of Bathurst St. and Sheppard Ave. in Toronto to intimidate the local Jewish community, and the government does nothing to stop this.”
“Instead, the government goes after small-time individuals on flimsy suspicions to pretend to be doing something, while at the same time it avoids taking any action which could offend its voter base.”
Hezbollah is a “radical Shia group” devoted to turning Lebanon into an Islamist republic like Iran, according to Public Safety Canada.
Armed, trained and financed by Tehran, it is part of the Iranian-led “axis of resistance” that also includes Gaza-based Hamas and Yemen’s Houthis.
Although bankrolled by Iran, Hezbollah also relies on drug trafficking and other crimes for revenue, and launders the proceeds, often through the global auto trade.
Iran has encouraged its axis groups to develop alternative sources of funding, said Davis, author of Illicit Money: Financing Terrorism in the 21st Century.
That includes taxation, extortion, investments and criminal networks, she said.
“Those are the kinds of things that provide longevity and financial lifelines to terrorist groups, even when their terrorist patrons cut them off.”
In a 2022 terrorist financing alert, the Financial Transactions and Reports Analysis Centre of Canada warned about Hezbollah’s activities.
The bulletin said that, after ISIS, Hezbollah was the international terrorist group most frequently spotted moving money across borders.
“A large portion of funds suspected of funding Hezbollah were sent to Lebanon,” FINTRAC wrote in the operation alert for financial institutions.
“Funds suspected of funding Hezbollah were frequently sent or received by individual/entities referencing sale of cars or listed in the automotive industry.”
A car dealer for more than three decades, Sowane launched Black Swan Trading Inc. in Ontario in 2015, according to documents filed in Federal Court.
He also worked at M&J Canada Inc., where his duties included exporting used cars and parts to overseas markets, according to the records.
The Mississauga used vehicle dealership, which described Sowane in a letter as a full-time employee, did not respond to requests for comment.
Three years after Sowane arrived in Canada on a work permit, Ontario’s Ministry of Economic Development nominated him to become a landed immigrant.
The province nominates prospective immigrants who “have the skills and experience the Ontario economy needs,” according to the government website.
The ministry responsible for the program did not respond to questions.
While federal immigration officials were processing Sowane’s permanent residence application, the Canadian Security Intelligence Service stepped in.
After CSIS sent a security screening brief to the CBSA in February 2024, Sowane was rejected “for being a danger to the security of Canada.”
Although immigration officials asked Sowane for records on his auto exports, they said he did not provide them, prompting officials to allege he “withheld information.”
Sowane argued he did not share the same religious beliefs as Hezbollah, but the CBSA said that “ideology may not be a factor when it comes to personal economic profit.”
His lawyer told immigration officers his client had “never had anything to do with Hezbollah and that his business activities have never had anything to do with Hezbollah.”
“The Sunnis in Lebanon hate Hezbollah and Mr. Sowane is no different. He blames Hezbollah for turning Lebanon into a failed state and says that he wants nothing to do with Hezbollah,” the lawyer wrote in an April 2024 email.
Sowane appealed the CBSA’s decision but lost.
In a decision handed down on Jan. 21, the Federal Court said the immigration department had come to its decision in a “procedurally fair and reasonable manner.”
Davis called it “a rare case of Hezbollah enforcement disruption in Canada,” which used the immigration screening system as opposed to the criminal courts.
“I think it’s really important that Canadians understand that this kind of stuff is happening in this country even when we don’t see law enforcement action,” she said.
“There are other ways that the Canadian government goes about disrupting finance networks. Immigration is a really, actually quite important, piece of that.”