A Fistful of Dinars

Six thousand miles from Baghdad, a Back Bay entrepreneur is making a low-profile fortune in the somewhat shady, often intoxicating, extremely risky business of trading Iraqi bank notes.


If you were looking to send someone on an under-the-radar mission to the Middle East, someone who would blend in with the locals, Bryan Canavan would not be your first choice. At 6 foot 6, with sandy-blond hair and blue eyes, he looks like Will Ferrell playing Jay Gatsby. In Boston, where Canavan lives and works, this is not an issue. But on the streets of Amman, Jordan, the towering-patrician look can be problematic, particularly if you’re alone, unarmed, carrying half a million dollars in cash.

Canavan, a 42-year-old businessman, is one of the people who make a living on the fringes of the Iraq war. He runs a firm called Dartmouth Capital, which is one of the largest Iraqi-currency traders in the United States and was, at the time of its founding a few years ago, one of the only outfits of its kind. Which, when you find out what being an Iraqi-currency trader entails, isn’t that surprising. On the spectrum of enterprises in Boston’s financial sector, Canavan’s falls into a remote category, somewhere between “highly specialized” and “nuts.”

With conventional currency trading, funds are moved around electronically—a button is pressed in Tokyo and an investor in Des Moines receives a billion yen. With the dinar, things are more complicated. Because the currency isn’t exchanged on the world market, trading it is a decidedly hands-on proposition. In order for an investor to acquire Iraqi bank notes, someone has to make the trip to the Arabian Peninsula, pick up a bundle of dinars, then schlep the bundle back to the States.

For the most part, these jobs are farmed out to security contractors, usually highly trained special-forces veterans. “We do a lot of clandestine things: We switch directions, switch clothes, we have a guy go in one way and out another looking like a different person,” says a representative of Templar Titan, one of the companies that often handle Middle East trips like these. “We’re trained, and we stay in the shadows.”

When Canavan started out, though, private security contractors weren’t part of the setup. In fact, there was no setup. You played it by ear. You asked around. You found a local who’d sell you dinars at a certain rate. Then you wired money to a Middle Eastern bank, flew over there to pick it up, made the swap, and came home. You hoped. “I’d go into the bank to get the money,” Canavan recalls. “The manager would take stacks of $100 bills, in $50,000 blocks, and put them on the table—in front of everyone in line, everyone could see me—a half a million dollars, and I’d walk out of there with all that money in a paper bag.” Canavan tells his story sitting in a Boylston Street Starbucks, his voice rising above a pair of chattering baristas. “It was stressful,” he says, shifting in his chair. “You become aware of who’s watching you—here’s this guy walking out with this big bag, you know, he’s not carrying Snickers bars.”

By disposition, Canavan is a man who values order, a systematic approach to getting things done. Just the memory of his seat-of-the-pants missions to the Middle East has him grinning like a man who’s taken a baseball to the groin. But he’s also a businessman, and there’s money to be made in dinars. So, over the space of a year or so, Canavan made more than a dozen trips to Jordan, putting himself in situations that would make your average Merrill Lynch trader yelp.

As he puts it now: “I always said to my partner, who’s my best friend, that while his dollars were at risk, if I didn’t get them back I’d be a lot worse off than he was.”

The first batch of freshly printed new Iraqi dinars descended into Baghdad International Airport aboard 27 Boeing 747s on September 17, 2003. Before long, an informal dinar-trading circuit took shape—spearheaded, for the most part, by returning U.S. troops. Iraqi insurgents, too, showed a lively interest in the money. “On 30 November, the largest battle since the end-of-war announcement was directed against two of our 35-man convoys which were delivering and collecting currency,” wrote retired Brigadier General Hugh Tant III, director of the Iraqi Currency Exchange, in a report posted on a military website. “A fierce battle ensued and many enemy were killed.”

At the time, Canavan was engaged in less stimulating pursuits. A middle-class Brooklyn native who’d come to Boston to study business and finance at Northeastern, he was working for a Waltham teeth-whitening firm, the latest ho-hum job in a peripatetic career that had included a stint in real estate and a failed cell-phone marketing startup. He recalls sitting on a bus one day, on his way to work, thinking, “This is a miserable existence.”

Canavan first learned about dinars during a chance meeting with an army reservist who’d returned from Iraq with some of the new bank notes. While others were satisfied with becoming Baghdad millionaires (in the early days, a million dinars could be bought for a few hundred bucks), Canavan had something far more ambitious in mind. He’d turn the ragtag dinar trade into a legitimate business and make some real money. Eager to get started, he went to his friend Doug Bacon—owner of the White Horse Tavern in Allston—and asked him to bankroll the venture. “I was, of course, a little hesitant,” Bacon says. “We talked about the obstacles, the risks. It was uncharted territory. It’s just so different from any other business you could start up.”

Eventually Bacon agreed to provide the capital, and Canavan set to work. He launched a website—SafeDinar.com—and did some online advertising, and the orders started trickling in. For the first year or so, he operated out of a closet-size room above the White Horse Tavern, often in the middle of the night, feeding Iraqi bank notes into a counting machine that had been placed inside a soundproof box—“I didn’t want anyone to know what was going on up there”—and handfilling FedEx packages with blocks of cash to be shipped to customers around the country.

Soon the demand for dinars grew to the point that Canavan was making trips to the Middle East every 10 days or so, bringing back more money each time. And with every trip, as he settled into a routine, things got hairier. “Too many people got familiar with me,” he says, “so I started moving around, checking into different hotels and keeping bags of my clothes there.” One of these bags, he says, was lost last year to a terrorist attack. Canavan learned about the bombing of Amman’s Grand Hyatt hotel while watching TV in Boston. A large part of the hotel’s façade had been blown away, and he could see his favorite stool, at the end of the U-shaped bar, where he would sit while waiting for the men with whom he made his exchanges. Fifty-seven people died in that and two near-simultaneous attacks, but it wasn’t bombs Canavan worried about.

“I’m out of my element there,” he says. “I had no support system. I’m putting my trust in people I never met.”

When asked how he’d made his contacts for these exchanges, Canavan says, “That’s an area that…” And then, “That’s an area…” In other words, he’s not telling. By far the riskiest part of the dinar trade is getting the money out of Iraq—“It’s difficult to even imagine the job,” Canavan says. “It’s like a suicide run.” It’s also the shadiest part, in legal terms. It isn’t illegal to sell dinars in America, or doesn’t appear to be—the Department of the Treasury merely recommends that Americans “[use] caution before purchasing Iraqi currency”—but Iraqi law makes it quite clear that money taken in and out of the country is supposed to be for personal use only.

Perhaps for this reason, or perhaps because of the risks involved, Iraqi money-runners go to extreme lengths to keep a low profile—you hear stories of people spiriting cash across the border in truck tires or fake gas tanks, or strapped to their chests like suicide belts. However the money got to his hotel room, Canavan knew these were serious people he was dealing with. He knew, too, that people have had their throats slit for far less money than he was holding, in much nicer neighborhoods.

When the moneymen came, there would be three of them: the boss and two armed guards. After a few perfunctory greetings, Canavan would scan the Iraqi notes and count out the dollars, and the guys would leave. Soon afterward he’d have to get to the airport. That was the worst part, he says—bouncing around in the back of a beat-up Mercedes, two large duffel bags beside him, two armed strangers up front, the sun dipping behind the rooftops. It was the perfect setting, like something out of a movie, for an ambush.

“One time, I noticed two younger guys getting into cars at the same time,” he says. “They leave the parking lot at the same time. You become aware of your routes—any deviation is, ‘Okay, why are you going this way?’”

Occasionally, Canavan would be jolted out of his unhappy reverie by his cell phone. “I never told anyone in my family that I was doing this. My parents in particular. They’re older and I think the strain would have been too much,” he says. “It’s funny—I’d be in a car late at night in the middle of nowhere, one of those high-stress situations, and my mother would call and say, ‘How’re you doing?’ And I’d say, ‘Ah, things are okay, same
old, same old.’”

Last year, not long after the bombings in Jordan, Canavan finally hired security contractors to handle his Middle East transactions (he won’t say who). According to at least one security professional, the move may have saved his life. Asked if he thinks it’s okay for amateurs to do these money swaps, the guy from Templar Titan, not a mild-mannered type to begin with, adopts the tone a drill sergeant would use with a recruit who’s holding his rifle the wrong way round. “No way! No way!” he barks. “All our guys are SEAL veterans. My guys are very aggressive males who served a long time. If you aren’t trained, you’re putting yourself in a bad situation. Al Qaeda watches those banks, they see the same guy go in for six months and then hit.”

For whatever reasons, Canavan managed to escape the attentions of the jihadists. Today the main threat to his livelihood comes from rival traders. There are now hundreds of people delivering billions of dinars to thousands of clients across the United States. Many traders, like Canavan, have their own slick websites, while minor players do the bulk of their business on eBay. Canavan’s dinars aren’t the cheapest on the market—he sells his for around $800 per million, $50 more than his lowest rivals’—but he insists the extra cost is warranted. “I have an infrastructure,” he says. “I have insurance and an office.”
All the same, Canavan’s aware that many look at his operation and think scam or, worse, terrorist funding. “Iraqi bank notes in Ohio?” he says. “There must be something nefarious going on.”

From the beginning, Canavan made an effort to overcome this perception. Unlike most traders, he works strictly on a cash-on-delivery basis. He has a 24-hour call center, for people with questions or concerns. Even the name of his company—Dartmouth Capital—has a ring of Brahmin circumspection to it. Canavan also refuses to employ Barnum-like sales tactics. “Some of my competitors have pictures on their sites of people being served cocktails on a yacht, or they talk about how the dinar is going to skyrocket,” he says. “I steer clear of that. You hear people who’ve bought a million dinar talking about renting a private jet. We tell people all the time, ‘You clearly need to go do your homework. This is not a given. This is a risk.’”

The approach seems to be working. Every day, dozens of phone orders come into Canavan’s answering system. The people on the line have Texas accents, or Kansas, or West Virginia, and they ask for their dinars in matter-of-fact tones, as if ordering groceries: “I’d like three million, please, in 25,000-dinar bills.” Some of the callers are women, a few sound elderly, and it’s a strange thing to imagine these people sitting in their modest homes in small-town America, waiting for their wads of Iraqi bank notes to arrive.

Not long ago, the Internet buzzed with rumors that Donald Trump had sunk $30 million into the Iraqi dinar. The fact is, most serious investors wouldn’t touch the stuff. Those who do are generally average joes, people who plow no more than a few thousand into their portfolios. The abiding hope among such investors is that as stability returns to Iraq, its currency will be revalued—perhaps even reach parity with the dollar. If that happens, the Nebraska housewife with 800 bucks’ worth of bank notes stashed beneath her bed would wake up a millionaire. It’s this, the possibility of an abrupt and staggering windfall, that keeps people coming back for more.

As a model for what they hope will happen to their holdings, these speculators point to the Kuwaiti dinar, which was valued at around $3 before the Gulf War, slipped below 10 cents at its lowest, and has since climbed past its prewar rate. The new Iraqi currency has a lot more ground to make up—it’s been trading at less than one-tenth of a cent—and investors will tell you, at least initially, they’d be satisfied with even a modest increase in worth. “I’ve paid $3,500 out of my pocket; $5,000 is where I draw the line,” says Bryan, a 41-year-old heating and air-conditioning engineer in Pennsylvania who counts himself a moderate investor. “I’m not one of those guys saying I want tens of millions of dollars. If the dinar went to a penny, I’d be happy.” Of course, he wouldn’t mind if it didn’t stop there. “I think it may exceed one-to-one,” Bryan says, referring to the much-fantasized-about dollar-for-a-dinar exchange rate. “There’s a real possibility that they might bring the dinar back to what it was before 1980.”

In 1980, thanks to some creative bookkeeping by Saddam Hussein, the Iraqi dinar was worth almost as much as a Kuwaiti note is now. If the dinar did reach those levels again, Bryan would stand to make about $13 million. A lot of money, sure, but peanuts compared with the payday facing Bob, 50, a government contractor in California and one of Canavan’s best customers. “I’ve purchased close to 200 million dinars, along with friends and family,” Bob says, adding, “For years we’ve been spending all this money for gas. I’m just getting my gas money back.” And then some: Pre-1980 rates would net Bob and his little consortium $600 million, give or take.

Canavan, to his credit, scoffs at such projections. “If that happened,” he says, “you’d have garbage men from Tikrit living in the Hamptons.”

During one of our conversations, out of the blue, Canavan hands me a 25,000-dinar note. “It’s worth 20 bucks,” he says. “Take it.” The note is deep pink, with swashes of orange and green. On the front is a woman holding a sheaf of wheat, smiling in a well-fed way; on the back is the image of Hammurabi, the Babylonian king said to have written the world’s first code of law. Surrounding the king is a mythical menagerie: a serpent, two unicorns, and what appears to be some kind of big cat, possibly eating someone. It’s exquisite, a little work of art, but my eyes keep wandering to the figure in the corner: 25,000. If the dinar goes to a penny, that’s a new suit. If it goes to a dollar, a nice car. Three bucks gets me the down payment on a house.

The note is larger than an American bill. Flap it back and forth, and it makes a satisfying clicking noise. Hold it up to the light, and a horse-head watermark appears. This, too, is part of its allure—where those with a stake in other currencies are confined to looking at numbers on a screen, dinar speculators can take their money out and count it, hold it, sniff it, roll around naked in it if they please.

Dinar speculators tend to fetishize their investment. “My gut, my feelings, my intuition, my faith, my confidence tells me this is going to be a winner,” wrote one speculator recently, on one of the many online message boards devoted to the currency. As these sites make clear, there’s an emotional element to all this, an intertwining of patriotism and a yearning for personal gain: One minute people will be writing about how they’re helping to shore up the U.S. effort in Iraq, the next they’re drooling about speedboats and beachfront villas. News stories are deconstructed for clues to the dinar’s direction. Capricious inside information—tips from a cousin’s mechanic’s next-door neighbor’s dentist’s accountant who has a friend of a friend in the Iraqi government—is swapped freely. There is hardly a single aspect of Iraqi life that doesn’t get picked apart by the people who meet in these forums.

“It becomes an obsession. It’s a very addictive thing,” says Bryan, the Pennsylvania investor. “You put a pile of drugs in front of an addict, and he’s going to go crazy.”

In June, investors celebrated the death of terrorist leader Abu Musab al-Zarqawi, which, for many, heralded the onset of stability in Iraq. A month later, they recoiled in horror as the country’s finance minister raised the possibility of the dreaded “triple zero lop,” an act that would cut the value of a 25,000-dinar bill to 25 dinars, which would probably require the printing of new bank notes, which would leave investors holding, as one pessimist put it, “toilet paper.” “Get your money back,” responded another, “and run for the hills!” This isn’t as easy as it sounds. You can indeed go to a bank to cash in your dinars, but—and here’s the thing—you have to go to Fallujah to do it. Right now, Iraqi currency is worthless outside Iraq, unless you sell it on eBay.

To critics, the fact that the dinar’s resale value relies on the enthusiasm of other speculators makes it little more than a collectible—or worse, the central element in an elaborate pyramid scheme. Jeffrey Frankel, a Harvard economics professor, calls the activity “pretend currency trading.” “I’ve received a large number of e-mails from people saying, ‘I understand you’re an expert on Iraq. Do you have any views? Can you advise me?’” he says. “I get the feeling that all these people doing this shouldn’t be. They’re little people, they don’t know what they’re doing, and they’re going to lose a lot of money.”

The offices of Dartmouth Capital are anonymous and drab, with the colorless carpets and clunky desks favored by auto insurance brokers. And that’s exactly the effect Canavan’s going for. Even back in Boston, he keeps his head down. He stores his currency in a vault in New York, the kind employing redundant security features and handprint identification technology. “You’d need a small army to get at the place we keep it,” he says, showing me a photo of a thick steel door that has swung open to reveal a sizable stack of pink bank notes. It’s a fitting image, underscoring the point that the only people profiting from dinars right now are people like Bryan Canavan.

Since he went into business, Canavan has sold tens of millions of dollars’ worth of dinars. His current markup averages out to about 15 percent. So he’s grossed several million dollars in two years. But as with his office décor, Canavan’s personal spending reflects a kind of conspicuous conservation. There are no glistening Maybachs in his driveway, no gargantuan pinkie rings on his dresser. According to his friend Doug Bacon, Canavan’s simply not the type to go splashing his money around. “I would describe him as cautious,” he says. “He knows this is going to end. We’ve made a little money, but where do we go from here?”

How and when the dinar trade ends—and how Canavan’s future shapes up—depends on what happens in Iraq. “At some point,” he says, “the business as it exists now will be gone, and that time will be, God willing, when things settle down over there.” He adds, “If the dinar hit a penny, you’d never see a website close down so fast, because I’m stacked up pretty well.”

After the news breaks about the potential zero lop—the dramatic devaluation of the new Iraqi currency—I visit Canavan at his office, to see if he’s banging his head on his desk. He isn’t. In fact, he seems remarkably upbeat, even when outlining the potentially catastrophic implications for him and his business.

“They might lose $200 on a million dinars,” he says, referring to small-time investors, “but I’d lose hundreds and hundreds of thousands, because I own that money sitting in that vault. I’m knee-deep in this. Everything I’ve made in this company is in dinar.” If the lop led to the printing of an entirely new currency, Canavan could lose everything. He seems less alarmed by this possibility than…interested.

I ask Bacon about this, how this supposedly cautious, business-savvy guy could leave himself teetering on the edge of ruin. And not only that—how he could act so blasé about it, all that money, that toilet paper maybe, sitting in a high-tech vault in New York, after all that effort, all that risk, the bank in Amman, the paper bag, the Arab street, the moneymen, the paranoiac drive to the airport. “Bryan has entrepreneurial blood in his veins,” Bacon replies, sounding equally sanguine. “Where some people might see a problem, he sees an opportunity.” Maybe so, but you get the sense there’s something else going on here.

On the windowsill of Canavan’s office there is a tall, tapered blue bottle. It’s arak, he says, an Iraqi liqueur. He recalls sitting on the roof of a Jordanian hotel one night, drinking from a similar bottle, looking out across the palm fronds and minarets, puffing on a Cuban cigar. He describes the experience with a half smile, as if remembering a childhood camping trip. “It was an adventure,” he says. “I felt like James Bond.”

Today, a couple of years after quitting the teeth-whitening game, Canavan’s back to doing a desk job. He has to worry about things like Patriot Act compliance, turning away customers who won’t provide the necessary personal information, checking ID photos against order sheets. There are FedEx bills to pay, customs forms to fill in. Canavan guesses he spends up to 70 hours a week at work, and many more hours fretting about it. “This consumes me,” he says, sounding tired. “It follows me around.”

Then, as he stands to see me to the door, Canavan perks up again. Lately, he says, he’s been looking into a new business venture, one that promises to be quite interesting. If the zero lop does happen, investors across the United States will be looking to cut their losses—there will be “pandemonium,” a “mad scramble” to get billions of dinars back to Baghdad. It’ll be difficult work, chaotic, fraught with danger and uncertainty. Canavan is confident that he’d be the man for the job.