Businessman found not guilty of breaching sanctions

A Halifax businessman accused of violating Canada's economic sanctions against Syria was acquitted Tuesday after the Crown called no evidence at his trial.

The federal government imposed the sanctions on Syria in May 2011, prohibiting anyone in Canada from investing in Syrian businesses.

The Canada Border Services Agency laid the charge against Nader Mohamad Kalai in June 2018, alleging he breached the sanctions by investing 15 million Syrian pounds in a real estate and telecommunications company called Syrialink on Nov. 27, 2013.

Based on the exchange rate at that time, the investment would have been the equivalent of about $140,000. The Crown alleged the transaction took place when Kalai was in Canada.

Kalai is a Syrian national who has permanent resident status in Canada. He was the first person charged with violating the Special Economic Measures (Syria) Regulations, which were enacted by the Canadian government in response to Syrian President Bashar al-assad's violent crackdown on protests calling for democratic reform.

Kalai appeared in Nova Scotia Supreme Court in Halifax on Tuesday via a video link from Beirut, Lebanon, for the start of what was supposed to be a two-day trial.

But Crown attorney David Schermbrucker announced he would be offering no evidence and invited Justice John Bodurtha to enter an acquittal.

The Crown's case was dealt a critical blow last month, when the judge ruled that documents seized from Kalai's home and Yahoo email account by investigators were admissible at trial for only a limited purpose.

Bodurtha decided that the documents were admissible as proof of Kalai's knowledge of their contents but not for the truth of their contents.

Kalai, 55, is owner and president of Telefocus Consultants Inc., a telecommunications consulting company that operates out of his home on Young Avenue in south-end Halifax. The company also has an office in Beirut.

In December 2016, the CBSA executed warrants to search Kalai's home, office and electronic devices, as well as his accountant's office.

Documents submitted to a judge to obtain those warrants reveal the CBSA opened an investigation in June 2016 after an intelligence officer received anecdotal information that Kalai, who moved to Halifax in 2009, was in business with individuals associated with the Syrian regime.

At trial, the Crown intended to rely on a number of documents seized from Kalai's home and Yahoo account. The material included minutes of a Syrialink meeting, instructions for a transfer of funds to Syrialink's bank account, a Byblos Bank Syria transaction receipt confirming a transfer, a document titled “Syria Link Real Estates” with notations, an email from Kalai's nephew Michel, and a list of companies with handwritten annotations.

The Crown argued at a pre-trial hearing that the documents should be admitted at trial for the truth of their contents. It sought to use them not only to connect the accused to the transfer, but for the hearsay purpose of proving that the transfer occurred.

The prosecution admitted that there was no other evidence of the transaction. The Crown therefore had to establish that Kalai recognized, adopted or acted upon the documents, or that it was necessary and reliable for the court to admit the documents.

Bodurtha, however, found that the Crown failed on both those fronts. He said the Crown had adduced “little or no evidence” that Kalai recognized, adopted or acted upon the documents and that the Crown, in the absence of any external corroborating evidence, had not met the threshold for “substantive reliability.”

“Based on the evidence before me, the documents are admissible, but not for a hearsay purpose,” the judge concluded.