The US Financial Crimes Enforcement Network (FinCEN) has revealed how Pakistani national Altaf Khanani, also the chief financier of Dawood Ibrahim, was involved in laundering $14-$16 billion annually and funding drug cartels and Islamist terror outfits across the world such as the Taliban, Hezbollah, and al-Qaeda.
Altaf Khanani received $49.78 million from ‘Moscow Network’
The revelation came at the backdrop of Suspicious Activity Reports (SARs) that were filed by Standard Chartered Bank in New York. FinCEN, in its 20-page Intelligence report, has exposed how Khanani laundered money through Dubai-based Mazaka General Trading LLC and 54 shell companies (also called the Moscow Network). Through these companies, Khanani moved funds from Russia to other parts of the world via European security markets.
Such a practice is often known as mirror trading. In this trade, an individual purchases securities in one jurisdiction and sells them in another jursidiction. While there is no economic gain in this process, the individual can conceal the fund source and the final destination. Those supporting Khanani in his money laundering business are his family members, based in Pakistan. Reportedly, he received $49.78 million from the Moscow Network between March 2013 – October 2016.
His parent trading company, Mazaka General Trading LLC, also procured funds Ask Trading PTE, a Singapore-based mirror trading company. Transactions for the mirror trade was facilitated through JP Morgan Chase Bank in New York, United Overseas Bank in Singapore, and Bank of Baroda (Dubai branch).
His lawyer Mel Black claimed, “Mr Khanani has pled guilty and served a lengthy sentence, during which his brother died and he was separated from his family. He is in bad health. He is financially destitute and his ability to earn money is destroyed by his being blocked by an OFAC designation and the freezing of his accounts. He has not been involved in any business activities of any kind for five years. He looks forward to moving ahead in a simple law-abiding life.”
The connection between Khanani and Indian company Rangoli
Khanani had also traded to the tune of $10.65 million with Rangoli International Private Limited, a New Delhi based company set up in 2009. Reportedly, transactions were done through the Punjab National Bank, Central Bank of India, Vijaya Bank, Bank of Maharashtra, Oriental Bank of Commerce, and Corporation Bank. One such transaction via Punjab National Bank took place on June 18, 2014, during which $136, 254 was traded between the two, the investigative report by Indian Express said.
As per the report n Indian Express, Rangoli witnessed losses to the tune of ₹74.87 crores, despite a sales revenue of ₹339.19 crores. Amidst ‘decline in profitability’, the company was listed as a ‘wilful defaulter in February 2020. The Allahabad bank had listed Rangoli as a top 50 NPA in March 2015. While Punjab National Bank allowed for e-mortage of Rangoli’s ‘mortaged properties’ in 2016 and 2019, the Corporation bank listed auction of the company’s immovable assets in October 2019.
Similar steps for loan recoveries was taken by the Union Bank in July this year. Reportedly, the Bank of Maharashtra has listed the company as a wilful defaulter in february 2020. Responding to the allegations, Rangoli’s MD Luv Bhardwaj said, “To the so-called ‘around 70 transactions concerning Rangoli International of the years 2013-2014’ that you refer in your query, of which we have no data for, responding in any manner would be a paradox.”
He dismissed claims of reception of $136, 254 from Punjab National Bank through Khanani’s mirror trading company.
Altaf Khanani was apprehended in 2015, financier of Dawood Ibrahim
Khanani was arrested in the US at the Panama airport during a trans-continental operation in 2015. He was kept in a Miami prison until July 2020. The association of Khanani with Ibrahim was established by the US Office of Foreign Assets Control (OFAC) while issuing sanctions notice, post his arrest.
The sanctions notice stated how he channelised funds to global terrorists, drug traffickers, and criminal organisations via his Money Laundering Organisation (MLO). The notice emphasised, “Altaf Khanani, the head of the Khanani MLO, and Al Zarooni Exchange have been involved in the movement of funds for the Taliban, and Altaf Khanani is known to have had relationships with Lashkar-e-Tayiba, Dawood Ibrahim, al-Qaida, and Jaish-e-Mohammed.”
The arrest of Khanani was seen as a breakthrough by Indian intelligence agencies given the Dawood Ibrahim connection and the fact that Lashkar-e-Toiba and Jaish-e-Mohammed had been specifically mentioned by the OFAC as terror organisations funded by him.