Afghanistan shelves plans for ambassador accused of fraud

Mohammad Daud Yaar, accused by Afghan family in US of defrauding them, had been chosen as ambassador in London

Mohammad Daud Yaar, the director of economic affairs at the foreign ministry in Kabul, was chosen as ambassador in London

Afghanistan has quietly shelved plans to send a man accused of fraud in the US to head its embassy in Britain.

Mohammad Daud Yaar, director of economic affairs at the foreign ministry in Kabul, had been chosen for the high-profile job, with confirmation expected to be little more than a formality. But last week the Guardian reported that an Afghan immigrant family in California had accused Yaar of defrauding them. In 2010 they obtained a civil court judgment against him. Yaar admits to owing the family $100,000 but says he intends to pay them back.

In the wake of the fraud claims, a government spokesman in Kabul had said his nomination was "proceeding as normal". But sources now say that, although Daud's contacts may protect his longer-term hopes of an ambassadorial posting, his candidacy for London is on hold.

Yaar is a long-standing and close friend of Mahmoud Karzai, the influential brother of Afghanistan's president, Hamid Karzai. Yaar lived with another Karzai brother, Ahmed Wali, in Chicago in the late 1980s and 90s. He had been expected to arrive in London shortly.

It is understood the decision to pull the plug on his nomination came last Friday after Karzai and several senior ministers returned from a summit of regional leaders in Beijing.

The British embassy in Kabul said it did not comment on ambassadorial appointments until they were confirmed.

UK foreign secretary William Hague, visiting Kabul for an international conference on Afghanistan's future, also declined to comment, but said on Wednesday he was not concerned that Kabul had gone months without appointing an ambassador.

Yaar's imminent appointment had followed a year in which London lay vacant as Kabul struggled to find a consensus candidate for what is considered one of the most prestigious diplomatic posts. There are now likely to be further delays. "Embassies do continue to operate without ambassadors for extended periods of time, but obviously we will welcome an Afghan ambassador in due course," Hague told a news conference.

Sources outside Afghanistan say Yaar secured the UK job after intense behind-the-scenes lobbying by Mahmoud Karzai, whose business activities in the US are also being investigated. Yaar spent about 20 years in the US, where he worked as a part-time professor and also built up an extensive property portfolio.

He returned to Kabul in 2009 after the civil action. The plaintiffs, two Afghan-born brothers, Jamal and Ajmal Staneckzai, claim Yaar "tricked, defrauded and deceived" them over the 2001 purchase of a house in Fresno, California. Yaar insisted the case, from California's superior court in Contra Costa, was a business deal gone wrong. He vehemently denied fraud.

"If I had committed fraud, why did they settle?" he told the Guardian last week in his office in a low-rise building inside the sprawling grounds of the Afghan foreign ministry. "It was a business agreement and the other side backed off [from their side of the deal] and went to the courts. They couldn't prove anything."

Yaar said he was planning to pay off the remainder of the money he owed as soon as he could afford it, but his home in California was in negative equity and his small government salary in Kabul did not leave room for savings. He stressed: "My intention was to help these guys to solve their housing problem."

But one of his alleged victims told the Guardian Yaar was not a fit person to become UK ambassador, let alone hold responsibility in Kabul for big financial issues. Jamal Staneckzai said he had wanted to buy a home for his elderly parents, Ghani and Amani, who fled Afghanistan in the 1980s during the Soviet occupation.

Unable to get a mortgage, he and four other families from the close-knit Afghan community in California turned to Yaar for help. Yaar bought a property in 2001 on their behalf, but registered it in his own name. The Staneckzais made regular mortgage payments, with several family friends providing the initial deposit as a loan, he said.

In 2005 the Staneckzais were finally able to get a mortgage. When they asked Yaar to transfer the property to them he refused and sold it to them for $358,900, promising to refund the net proceeds.

Yaar never refunded the money, Staneckzai alleges. "I was a part-time student at university back in 2001, which is why I couldn't get a loan. We regarded Yaar as a close and respected uncle. He told us, 'You guys will pay the mortgage costs and I will transfer everything back to you". Instead he took every dollar from us. He took our equity."