The 61-year-old Iranian-Canadian man had access to various Iranian ministries, and supplied the German government with information about the nuclear development programme, which was then used in international negotiations, Der Spiegel magazine reported on Monday.
He was paid handsomely for his work and the risks he took, pocketing around a million euros.
But what the spymasters at Germany's BND foreign intelligence agency did not realize was that their man in Tehran was using his companies in Germany and Canada as more than a front for extensive travel and working contacts in Iranian ministries.
He was also selling banned tools to an embargoed Iranian firm thought to be involved in the Shahab rocket project – the mid-range rockets designed to reach at least as far as Israel and which are feared to be soon capable of carrying nuclear warheads.
After a lengthy surveillance operation, he was arrested by the Cologne Customs Investigations Bureau two weeks ago as he returned from yet another foreign trip. The officers soon discovered his work for the BND, but a discussion between the heads of the different authorities could not save the spy – he was charged and is likely to face prison.
The BND are now considering whether to give him a new identity when he gets out, in order to protect him from a potential revenge attack by the Iranian secret services.
Diplomatic considerations must also be made, the magazine reported, with relations between Germany and Iran likely to be seriously damaged once it becomes known that Germany was running a spy at high levels in Iran.
The BND has also been left without its most important source of what had been very reliable information from Iran.