AFP- Iran has handed down heavy jail sentences to a former head of its largest state-owned bank who fled to Canada over a record-breaking $2.6 billion embezzlement scandal, the judiciary said on Saturday.


Mahmoud Reza Khavari, the former head of Bank Melli who took refuge in Canada in 2011, "has been sentenced on four charges to long prison terms, a cash fine and compensation," Gholamhossein Esmaeili, a top official in Tehran's judiciary, told the Mizan news agency, without giving further details.


"The prosecutor will sell his assets and in this way part of his sentence will be executed," he said, adding that the verdict could still be appealed.


Khavari obtained Canadian citizenship in 2005, and Canada does not have an extradition agreement with Iran.


The scam, described as the largest in Iran's history, was uncovered by prosecutors in 2011 during the tenure of hardline president Mahmoud Ahmadinejad.


Prosecutors found a private group named Amir Mansour Aria Development Co. had bought 40 companies, including a major steel mill, with forged letters of credit obtained from major banks whose managers had been bribed.


They amassed an estimated 30 billion rials ($2.6 billion).


The group was run by businessman Mahafarid Amir Khosravi, who was hanged in 2014 on charges of "corruption on earth... through bribery and money laundering".


His brother Mehrgan Amir Khosravi is also on the run and on Interpol's wanted list.


At least 20 people were arrested in Iran, including the head of the state-owned Bank Saderat, Said Kiani-Rezazadeh, who was also sentenced to death but is thought to still be in prison.


Khavari fled the country in September 2011, first travelling to Britain under the guise of a work trip before heading to Canada.


His assets in Iran include a house which "does not suffice" to compensate for his reported thefts, a lawyer involved in the case told the ISNA news agency last month.


The case took on political dimensions when the finger was pointed at senior officials in Ahmadinejad's administration, which he dismissed as a smear campaign.