Patriot Act Used to Shutdown Illicit Money Transfer Businesses
by
Jim Kouri, CPP
A nationwide campaign by Immigration and Customs Enforcement agents
against unlicensed money transmittal businesses and underground "hawalas"
has resulted in the arrest of 140 individuals, 138 criminal indictments,
and the seizure of more than $25.5 million in illicit proceeds since the
enactment of the USA Patriot Act, which requires such businesses to be
licensed and registered.
Over the past few weeks, 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. In recent days, ICE has
won guilty pleas from two defendants and arrested another on charges of
operating unlicensed money transmittal businesses.
On Friday, May 20, Rahim Bariek, 46, a naturalized U.S. citizen from
Afghanistan and resident of Herndon, Virginia, pleaded guilty in
Alexandria to operating an unlicensed money transmittal business that
wired millions of dollars to Iran, Pakistan, and areas in Afghanistan
under the control of the Taliban between 2001 and 2003. On November 14,
2001, roughly two months after the 9/11 attacks, Bariek testified before
the U.S. Senate about how important it was for "hawaladars" like himself
to abide by federal laws governing such businesses. Those who skirt the
rules "give all hawala a bad name," he testified. A subsequent ICE probe
revealed that Bariek was operating an illegal money transmittal firm in
Virginia that illegally wired $4.9 million to Iran, Pakistan, and
Afghanistan. Bariek faces a maximum five-year sentence when sentenced on
July 29, 2005.
On Friday, May 20, Noor Alocozy, 41, a native of Afghanistan native living
in San Francisco, pleaded guilty to federal charges of operating an
unlicensed money transmittal business that funneled nearly $1 million to
Afghanistan, Pakistan, and elsewhere. The investigation by ICE, the FBI,
DEA, and IRS revealed that Alocozy's business had been utilized by Jack
Idema, the former Green Beret-turned bounty hunter who is currently
imprisoned in Afghanistan for allegedly torturing Afghan civilians. During
the investigation, Alocozy provided ICE investigators with copies of
business ledgers indicating that Idema used Alocozy's business to send
funds from the U.S. to Afghanistan, presumably in support of his quest to
capture Osama bin Laden and collect the $50 million reward. Alocozy is
scheduled to be sentenced on August 26, 2005.
On May 13, 2005, Eltaib Yousif, 41, a resident of Castro Valley,
California, made his initial court appearance in federal court in San
Francisco after being arrested by ICE agents on charges of operating an
unlicensed money transmitting business. According to the indictment,
Yousif illegally moved more than $1.5 million outside the country between
September 2001 and November 2003. The investigation began after San
Francisco ICE agents received a tip from ICE agents in New York about
suspicious deposits being made into accounts at Citibank branches there
and in the Bay Area. These enforcement actions result from an ICE
investigative strategy that targets the underlying financial systems that
terrorist and other criminal organizations may exploit in raising, moving,
and storing illicit funds. ICE seeks to deny criminal organizations access
to these systems. One system that has repeatedly proven vulnerable to such
exploitation involves money transmittal businesses and related hawalas.
For decades, ICE agents have seen criminal organizations use money
transmittal businesses to move their illicit proceeds overseas. In 1996,
for example, ICE agents executed search warrants on three locations
affiliated with Tele-Austin, a small money transfer firm in Queens, New
York. Evidence gleaned from these searches helped ICE identify and
ultimately arrest the chief New York representative of Colombia's Norte
Valle drug cartel, who had moved $70 million in drug funds to Colombia
through these money transfer firms. Subsequent ICE investigation resulted
in the indictment in New York last year of the leaders of the Norte Valle
cartel, which is believed to be responsible for 50 percent of the cocaine
supplied to the United States.
The USA Patriot Act of 2001 enhanced ICE's ability to combat the
international movement of illicit funds through money transmittal
businesses by amending the 18 USC 1960 statute. As a result of this law,
money transmittal businesses in the United States are required to be
registered with the U.S. Treasury Department and to be licensed by the
appropriate state authorities.
Sources: US Immigration and Customs Enforcement, National Asssociation of
Chiefs of Police
Jim Kouri, CPP is currently fifth vice-president of the National
Association of Chiefs of Police. He's former chief at a New York City
housing project in Washington Heights nicknamed "Crack City" by reporters
covering the drug war in the 1980s. In addition, he served as director of
public safety at a New Jersey university. He's also served on the
National Drug Task Force and trained police and security officers
throughout the country. He writes for many police and crime magazines
including Chief of Police, Police Times, The Narc Officer, Campus Law
Enforcement Journal, and others. He's appeared as on-air commentator for
over 100 TV and radio news and talk shows including Oprah, McLaughlin
Report, CNN Headline News, MTV, Fox News, etc. His book Assume The
Position is available at Amazon.Com, Booksamillion.com, and can be ordered
at local bookstores
