The Cornerstone Report: Volume 2, Issue 2

ICE Campaign Targets Illegal Money Transmittal Businesses

On May 23, ICE announced the latest results in an ongoing nationwide campaign to identify and shut down unlicensed money transmittal businesses— including underground “hawala” businesses.

Since late 2001—when the USA PATRIOT Act was enacted—ICE has made 140 arrests, secured 138 indictments, and seized more than $25.5 million in illicit proceeds by targeting these illicit financial operations. These investigative efforts continue to ensure that this potential avenue for criminal and terrorist financing is closed off.

“Hawalas” are a form of money transmitting business, common in many Middle Eastern and African countries, through which funds can be transferred between parties based on ties of kinship and individual trust. These arrangements could be exploited by terrorist groups or other criminal organizations to transfer large sums of money across international borders undetected.

“ICE targets these illegal operations because we know that terrorists and other criminal organizations can use these underground businesses to move illicit funds anywhere in the world with no questions asked, ” said ICE Assistant Secretary Michael Garcia.

“Over the past two years, ICE has shut down a number of unlicensed money transmittal businesses that were responsible for the transfer of millions of dollars to Afghanistan, Pakistan and Iran,” said Assistant Secretary Michael Garcia of ICE. “ICE targets these illegal operations because we know that terrorists and other criminal organizations can use these underground businesses to move illicit funds anywhere in the world with no questions asked.”

Money services businesses (MSBs) provide a valuable service to individuals both in the U.S. and abroad. However, individuals who choose to operate in violation of federal and state laws pose a significant vulnerability and place legitimate MSBs at a competitive disadvantage.

The Patriot Act enhanced the ability of federal law enforcement agencies to combat illegal money transfers and underground hawalas.

Two separate cases in which ICE arrested individuals in Virginia illustrate the success of this campaign.

In the first case, Louay Habbal, a naturalized U.S. citizen originally from Syria, was arrested for operating an unlicensed money transmittal business from his home in Vienna, Va. He was arrested at Dulles International Airport as he returned to the United States on a flight from Damascus, Syria.

According to the indictment, Habbal allegedly transferred a total of more than $23 million to countries in the Middle East and North Africa between November 2001 and July 2004 through his business, Mena Exchange. ICE agents seized more than $100,000 from the company’s bank accounts and other assets.

In a separate case in Virginia, ICE arrested Rahim A. Bariek, a naturalized U.S. citizen originally from Afghanistan, after an investigation revealed that Bariek had been involved in the illegal transfer of $4.9 million to recipients in various Middle Eastern nations, including Afghanistan, Iran and Pakistan.

On May 20, Bariek pleaded guilty in federal court to charges of operating an unlicensed money transmittal business. He faces a maximum sentence of five years in prison when he is sentenced in July.

In an unusual twist to the case, Bariek had earlier testified before a subcommittee of the U.S. Senate Banking Committee on “hawala” money transfer businesses and underground terrorist financing mechanisms.

“I pay taxes on my hawala business and I comply with the law,” Bariek testified in November 2001. “It is upsetting to us that there are hawala used for illegal activity. They give all hawala a bad name.”

In similar investigations, illegal money transmittal businesses and hawalas have been shut down in California, New York, Illinois, Ohio, Michigan, Washington D.C, and other locations around the country.

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Cornerstone Calendar

Cornerstone is U.S. Immigration and Customs Enforcement's (ICE) comprehensive investigative initiative for fighting financial crime, trade fraud and intellectual property crime.

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