Suspected hawala banker: Number one in the money business

Marc Steinhäuser

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A good 26 million euros – that’s what the officials of the State Criminal Police Office confiscated in November 2019 when they searched jewelry stores, pubs, offices and apartments in Duisburg and several other cities.

212 million euros are said to have been moved

The charge that WDR and “Süddeutsche Zeitung” (SZ), speaks of a widely ramified network that is said to have been even larger than previously known. With deposit offices in Duisburg, Neuss, Düsseldorf and Bielefeld, as well as in Hamburg, Saarlouis, Stuttgart and Berlin.

The man who is said to be the head of the group has been in custody since the raids. The network is said to have smuggled cash into Turkey on a large scale, a total of at least 212 million euros, for a commission. The public prosecutor’s office in Düsseldorf accuses him of violating the Payment Services Supervision Act.

Hawala banking is centuries old

Put simply, the group is said to have operated financial transactions without a license. And she is said to have teamed up for a criminal organization. Investigators apparently consider her a service provider for organized crime. The system they are said to have used for this is called hawala banking. A centuries-old transfer method, especially in Muslim countries: someone deposits cash in one place. It is paid out to the recipient at a different location without actually having to move the money – and without being officially recorded.

The main accused’s lawyer does not deny the hawala business. His client admitted this too. However, the allegation of criminal association is likely to be disputed before the Düsseldorf regional court. “I believe that you will not keep that in the process,” says lawyer Klaus Bernsmann with conviction. Of course, hawala banking is illegal, but his client has nothing to do with organized crime and money laundering. He is suspected for no reason, “although he has only done what has been customary for centuries”.

Where does the money come from?

The prosecutor’s office does not accuse the group of money laundering either. To do this, you would have to prove that the men knew that their customers’ cash came from illegal transactions. However, the boss was careful not to talk about it.

It is therefore quite possible that some of the money also comes from completely legal transactions, for example from the income of shopkeepers of Turkish origin. However, investigators say that it would be naive to assume that with so much cash there are not organized crime customers.

Some customers would have deposited several million euros at once. In the vicinity of these customers, too, the investigators asked for information from WDR and SZ investigated. However, this was partly in vain because several couriers were intervened. The people behind it remained hidden. There was no evidence of terrorist financing.

Commission of 1.5 to two percent

Even the investigations into hawala banking were time-consuming for the LKA in Düsseldorf. A total of 40 moving boxes with documents had been collected. The investigators are said to have been helped by the thoroughness of the alleged boss of the group. He is described as a “control freak” who had every transaction confirmed by WhatsApp message.

In 2018 and 2019 he is said to have gradually used more and more jewelry stores and restaurants as deposit points. With one of his business partners he had the goal of becoming “number 1 in the money business”. As a commission, the group is said to have kept around 1.5 to two percent of the transaction sums.

Gold trade ensures a filled money pot in Turkey

Since almost all of the payouts are said to have taken place in Turkey, the pot had to be refilled with cash over and over there. This is said to have worked mainly through a gold trade: According to the indictment, the group is said to have bought a lot of gold with the money that their customers have deposited in Germany, a total of at least 6.5 tons.

This gold is said to have been sold to a company in Hesse that belongs to a Turkish company. The purchase price for the gold is said to have been paid in Turkey – in cash to the brother of the main accused. He then paid the cash back to the Hawala customers at the “Covered Bazaar” in Istanbul.

“Allegations are a bit of propaganda”

The defense does not deny that either. Basically, however, his client did no harm to anyone, says lawyer Bernsmann. He considers the fact that he has been in custody for a good year and a half to be unjustified. He believes that the investigation was driven in this direction for political reasons: “I think it’s a bit of propaganda. You make a crime angry, which for me is little more than an administrative offense.”

The case is also a prestige procedure for the NRW state government. In 2018 she founded a new task force to better combat money laundering, the financing of terrorism and organized crime. LKA, tax investigators and the judiciary should work together in a more targeted manner. The hawala trial is now the first of the task force to go to court.

The question will then not only be how high the penalty will be for the seven men, but also what will become of the confiscated assets, after all, a good 26 million euros. From the point of view of the defense, only what the hawala bankers have earned from the transactions should be retained, i.e. only around 350,000 euros. The jeweler from Duisburg wants the rest back.