NEW YORK, Oct 20: Italian authorities, with the help of the US Drug Enforcement Administration and Britain’s Serious Organised Crime Agency, have unmasked an international money-laundering ring based in Dubai that uses the hawala (hundi) system of money remittance, Business Week magazine said in a report on Thursday.
The Italian tax police arrested several Pakistanis living in Carpi, a town near Modena in northern Italy. They also issued an arrest warrant for an Indian, Kumar Jain Naresh, commonly known as Patel, who lives in Dubai and allegedly runs what authorities call an informal bank, where deposits come in from drug sales around the world, and transfers go out to drug barons in places like Turkey, the Business Week Magazine reports.
The investigation, dubbed “Operation Khyber Pass,” began as a typical drug bust but led authorities to a Dubai-centred international financial organisation spanning from South America to Australia. In Italy, it marks the first time authorities have found proof of the hawala system, rather than couriers, being used to move drug money.
“We’re encouraged by the cooperation we’re getting from Dubai authorities,” Tom Pasquarello, a US DEA official who collaborated with the Italians in the investigation told the magazine.
The hawala system, which originated in India, typically works this way: a Pakistani taxi driver in New York who wants to send cash to his family in Pakistan turns the cash over to an agency. The agency is typically a company with some other activity such as an import-export business. For a fee, the agency telephones its branch in Pakistan and instructs the branch to deliver the equivalent sum quickly to the driver’s family. Later, the Pakistani branch of the agency and the New York branch settle their inter-company debt with a wire transfer or an exaggerated bill for imported shirts.
The magazine revealed that the Pakistani ringleader held in Carpi along with his four brothers and several cohorts owns a hair products store, which investigators allege is a major hawala centre bringing in drug receipts from all over northern Italy. According to the Italian police, phone calls from the hair-care store to Dubai would authorise money transfers to be made from Patel’s “bank” in Dubai to drug exporters, mainly in Turkey. The Italian authorities said they had been able to trace the money transfers only as far as Turkey, though they allege that heroin refined in Turkey and sold in Italy is made from poppies grown in Afghanistan.
