Posted on 12/19/2002 9:09:51 AM PST by ganesha
Yemeni connection
Arrests extend to Michigan in federal probe of money transfers
By MICHAEL BEEBE and SANDRA TAN News Staff Reporters 12/19/2002
HARRY SCULL JR./Buffalo News Mohamed T. Albanna of Lackawanna leaves federal court in Buffalo after being freed from jail on $100,000 bond amid cheers and hugs from family and friends.
HARRY SCULL JR./Buffalo News Defense lawyer Philip M. Marshall says the government is focusing on his client's lack of a license.(I don't know how to post photographs follow link to source to see these pictures.)
The federal government continued its crackdown on illegal money transfers to Yemen on Wednesday, arresting seven more people in Detroit while expressing confidence in its criminal case against Lackawanna community leader Mohamed T. Albanna and two relatives on the same charges here. U.S. Customs Service agents said that as much as $50 million a year was shipped to Yemen from Detroit and Dearborn, Mich., using the same type system, "hawala," that Albanna is accused of using.
As with Albanna, who was released from jail with his brother and nephew after posting bond Wednesday, customs officials said they found no evidence that any of the money sent to Yemen ended up in the hands of terrorists.
The government said its crackdown, called Operation Green Quest, will continue.
"Illegal money transfer businesses, by their nature, are vulnerable to exploitation by criminal organizations, including terrorist groups," U.S. Customs Commissioner Robert C. Bonner said Wednesday after this week's arrests.
The arrests here and in Michigan, using some of the same customs agents, have brought a new focus to a system that thousands of Americans use every day to send millions of dollars to relatives in poorer, less sophisticated countries.
The "hawala" system, which operates on trust with little or no paperwork between agents in different countries, has operated for centuries.
It is obvious why many recent immigrants would choose to use "hawalas," said Dr. Khalid J. Qazi, president of the American Muslim Council of Western New York, instead of more generally accepted means.
"We do understand that in many places there isn't postal service available, there isn't banking service available, and sending through a trusted person is easier for people to do," he said.
Some of the people receiving the money cannot even read or write, he said, much less figure out how to cash a check, operate a bank account or sign for legitimately wired money even if there were a place nearby where they could do so.
Qazi said his organization has tried to discourage its members from using the "hawala" system because it is considered an irregular practice in the Western world.
In fact, it is more than irregular. As Qazi's vice president of the Muslim Council, Albanna, found out, it is illegal.
Provisions of the USA Patriot Act, made law in October 2001 as a result of the Sept. 11, 2001, terrorist attacks on the World Trade Center and the Pentagon, required all money transmitters to register both in their individual states as well as with the U.S. Treasury Department.
Albanna was not registered, but that is not surprising.
Bethany Blankley, a spokeswoman for the New York State Banking Department, said that there is not a single "hawala" registered in New York State.
She said that there are 65 money transmitters registered - such as Western Union and HSBC Bank - but no "hawalas." The department's Criminal Investigations Bureau confirmed to prosecutors here that Albanna had not registered.
By definition of the Patriot Act, this means that any "hawala" in New York State is violating the law because it is not registered.
Albanna, 51, his nephew Ali A. Albanna, 29, and Ali Taher Elbaneh, 52, Mohamed Albanna's brother despite the different spellings of their last names, found out how seriously the government takes the relatively new law.
Wednesday, Albanna and his nephew, described by the government as principals in the money-transfer business, posted $100,000 bond each and were released from jail by U.S. Magistrate Judge Hugh B. Scott. Elbaneh, who prosecutors say played a minor role in the operation, was released on a $25,000 signature bond.
As Mohamed Albanna left the courtroom, friends and relatives cheered and hugged him. Many said they have sent money home through "hawalas" and find nothing wrong with the practice.
Albanna, a familiar face to reporters through his many court appearances supporting the defendants in the "Lackawanna Six" case - his nephew Jaber Elbaneh has been implicated in the case and is living in Yemen - said little this time.
"Look, I can't comment on the aspects of the case," Albanna told reporters. "Just be patient. You'll know the whole story. Thanks for your support."
Philip M. Marshall, his attorney, called his longtime client "a wonderful man."
"The government isn't saying they were doing anything wrong," Marshall said. "They're saying, "Hey, you should have a license.' "
So why didn't a businessman as successful as Albanna, whose Queen City Cigarettes & Candy warehouse in Buffalo supplies more than 100 small delis, get a license?
"I'm not going to discuss the case," Marshall said.
William Haslinger, an assistant professor of economic crime investigation at Hilbert College who spent 28 years as a criminal investigator with the Internal Revenue Service, said the government has some big hurdles to clear in prosecuting Albanna and his two co-defendants.
"In order to prosecute these guys," he said, "the government has to show some evidence they were aware of the need to register and they didn't."
Because it is a felony case, he said, it is not enough for the government to assume that Albanna and the others learned of the new regulations through the media or word of mouth.
While prosecutors say Albanna's "hawala" had been in operation for several years and sources said it handled as much as $3 million, the three men are accused of sending $486,000 to Yemen from October to December.
Haslinger said his study of the "hawala" system shows that most people use it for legitimate reasons.
"People hear about $500,000 and they want to know, "Where did they get that kind of money?' " he said. "These guys are just money transferrers; this could have come to them perfectly legitimately."
Lackawanna residents outside the Yemeni community, in particular, say they have found themselves plunged into confusion by this week's arrests, sharing deep concerns about how well they really know their quiet immigrant neighbors in the First Ward.
"People are asking the question, "Where do they get that type of money?' " said City Council President Norman Polanski. "We're very frustrated. You want to give this community the benefit of the doubt. In my dealings with them, they are very respectful people. But you have this crop up and you go, "What . . . is going on?' "
The local Yemeni community is hardly unique in its efforts to send money back to their native country, although others seem to use more traditional means.
Jim Schmidt, director of the Rochester branch of Farmworker Legal Services, said he thinks that migrant workers from Mexico or Jamaica might send back as much as 60 to 70 percent of their pay.
Often the money is wired through companies such as Western Union, he said, but every year, he sees a case or two of botched attempts to send money through less official means.
"They'll go to a local establishment or a friend or a store owner they know who will take the money and say they'll wire this," he said, "but the money never gets there."
Andres Garcia, a local Hispanic leader, said everyone he knows with family back in Puerto Rico sends money home. But because Puerto Rico is part of the U.S. postal system and has many of the same banks, transferring money is never a problem.
"I talk to my mom every Sunday, and whenever she needs money, I send it," he said. "What the Yemenites are doing is not any different than any other ethic group in the city. The problem is that in Yemen, they don't have the resources that Puerto Ricans, as American citizens, have."
Qazi said he sends money back to his extended family in Kashmir by asking friends who are returning to his native land to carry the money with them. He said that he once sent a bank draft in the mail for more than $1,000 and that the money was lost.
"We couldn't trace it for three months," he said. "I was lucky that I was able to get the refund here, but the reason for that was that I had a very strong paper trail. That is not the case all the time."
Qazi pointed out that his organization has held two sessions this year to inform its members about ways to send money back to relatives that would be preferable to "hawalas."
"After the dust settles in the next few weeks," he said, "we will need a redoubling of our efforts for the education of our Muslim community."
He and other leaders of their community say they have their work cut out for them rebuilding bridges after the arrests of the Lackawanna Six and now one of their community leaders, Mohamed Albanna.
Riyaz Hassanali, a Williamsville physician, said he thinks that the Muslim community will continue to push forward with efforts to break down any mistrust between Muslim and non-Muslims.
He also said he wished that more people would put the story of the most recent arrests into perspective.
"There is so much organized crime taking place in Buffalo alone, whether it's drug lords or money laundering. How come they don't get front-page attention?" he said.
"My worry is that a bigger deal will be made of this than it should be."
e-mail: mbeebe@buffnews.com and stan@buffnews.com
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