Pakistan

WASHINGTON – A US State Department report released on Friday termed the ‘Altaf Khanani’ group as a money laundering organisation and accused it of laundering billions of dollars for organised crime and terrorist outfits.

US Assistant Secretary of State for Bureau of International Narcotics and Law Enforcement Affairs William R. Brownfield told a briefing in Washington that the State Department had delivered its 32nd International Narcotics Control Strategy Report to Congress on Wednesday.

In its section on Pakistan, the report notes: “The Altaf Khanani money laundering organisation (Khanani MLO) is based in Pakistan. The group, which was designated a transnational organised crime group by the United States in November 2015, facilitates illicit money movement between Pakistan, the United Arab Emirates (UAE), United States, UK, Canada, and Australia.”

The group “is responsible for laundering billions of dollars in organised crime proceeds annually. The Khanani MLO offers money laundering services to a diverse clientele, including Chinese, Colombian, and Mexican organised crime groups and individuals associated with designated terrorist organisations”, the report adds.

The report describes Pakistan as strategically located country at the junction of south, central and western Asia, with a coastline along the Arabian Sea. It notes that Pakistan’s porous borders with Afghanistan, Iran and China facilitate the smuggling of narcotics and contraband to overseas markets.

The report suggests that there was a substantial demand for money laundering and illicit financial services in Pakistan apaprently due to country’s black market economy and law and order situation.

The findings also acknowledged that majority of Pakistani’s living abroad used legal channels for transferring money.

‘From January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up by 2.3 per cent from 2015’ said the report.

‘Criminals exploit import/export firms, front businesses and the charitable sector to carry out their activities. Pakistan’s real estate sector is another common money laundering vehicle, since real estate transactions tend to be poorly documented and cash-based’ it adds.

It was also noted that Pakistan’s Federal Investigation Agency which was responsible for investigating money laundering cases lacked the capacity to pursue complicated financial investigations.

Altaf Khanani who was arrested in September last year and is still behind the bars pleaded guilty to a money laundering charge before a US court and signed a plea agreement in October 2016.

He was indicted in the US District Court of the Southern District of Florida on 14 counts of money laundering in June 2015.

The United States blacklisted four individuals including Altaf and his son Obaid in October for purported ties to an organisation accused of laundering money for drug traffickers and Chinese, Colombian and Mexican crime groups.

US Department of Treasury confirmed that the 29-year-old Obaid kept laundering money even after the arrest of his father.

‘Altaf Khanani’s nephew Hozaifa was also involved in real estate investments on behalf of his uncle’s organisation’ the Treasury Department added.

It said Mohammad Javed Khanani, Altaf Khanani’s brother, was “heavily involved in laundering criminal proceeds via money service businesses”.

Javed Khanani, a director of Khanani and Kalia International (KKI) money changers, died in December 2016 after reportedly falling from an under-construction building in Karachi.

A fourth man, Atif Polani, helped move funds on behalf of Khanani’s organisation.

Javed Khanani and Munaf Kalia were arrested in Pakistan by the FIA in a dramatic raid in November 2008 when a complaint lodged against one of their franchises in Gujranwala led to the discovery of a parallel money transfer system being operated by their company — KKI — for purposes of transferring money out of the country through illegal hundi/hawala channels.