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German arms dealer fails to avoid being extradited on charges of fraud and tax evasion

A Canadian court ruled a German arms dealer's to be extradited to Germany on charges of fraud and tax evasion.

The move came as unrelated allegations by Karlheinz Schreiber have led to a major investigation of former Canadian Prime Minister Brian Mulroney, leading some in the Canadian government to say Schreiber should stay in Canada to testify about his allegations.

Schreiber has alleged in court documents that he paid Mulroney $300,000 Canadian in cash as part of an arrangement that was finalized during Mulroney's final days as prime minister in 1993.

Prime Minister Stephen Harper has called a public inquiry, and opposition critics have been pressing the governing Conservatives to prevent Schreiber's extradition to Germany so he can be called to testify.

Mulroney, who served as Canada's Conservative prime minister from 1984 to 1993, denies Schreiber's allegations and has said there should be a public inquiry, saying a wide-ranging probe is the only way to put the issue that has dogged him for years to rest.

Mulroney has been a close adviser to Harper's Conservative government, but Harper warned members of his government last Friday not to deal with Mulroney until the issue is resolved.

A panel of Ontario Court of Appeal judges refused Thursday to grant Schreiber's attempt to remain in Canada, but said it would order, if necessary, that Schreiber and his lawyers receive two weeks' notice before he is removed from Canada.

Schreiber is expected to appeal to the Supreme Court of Canada, a move that would likely delay his removal to Germany.

Germany alleges that Schreiber, who has dual Canadian-German citizenship, avoided paying income tax on $46 million Canadian in commissions. The fraud charges against him are related to a deal for the sale of German army tanks to Saudi Arabia.

Schreiber is being held in a Toronto detention center.

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