The former head of Iran's largest state-owned bank, who fled to Canada over a record-breaking $2.6 billion embezzlement scandal, has been given a 20-year prison sentence and $6 million fine in absentia, the judiciary said on Saturday.

Mahmoud Reza Khavari, the former head of Bank Melli, took refuge in Canada, where he has citizenship, after the scandal broke in 2011.

Moosa Ghazanfarabadi, head of Tehran's Revolutionary Court, told the conservative Fars news agency that Khavari had been sentenced to 20 years for "disrupting the economic system" and 10 years for bribery, to run concurrently.

Each charge carried a $3 million fine, and the verdict was still open to appeal.

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 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 has been seized, but it "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.

Ahmadinejad, who has fallen out of favour with the establishment, has accused the judiciary in recent weeks of politically motivated cases against his allies, and continues to level his own corruption allegations against key members of the government.

source: AFP