German cops have moved to smash a suspected money-laundering scheme centred around an Islamic banking network that is believed to have illegally sent around 200 million EUR to Turkey.
In total, 800 cops raided 60 properties and companies connected to the suspected network in a probe coordinated by prosecutors in the German city of Duesseldorf in North Rhine Westphalia (NRW).
Police say that the gang had been secretly transferring money to Turkey using a Hawala banking system.
The Hawala banking system, which has been in use for centuries, involves money being transferred without the involvement of banks, because the money is simply deposited at the collection point and paid out in another country by moneylenders who take a commission.
The money does not physically move, instead the amount deposited is notified to the person at the other end, who pays the equivalent amount out, and as a result it is popular with criminals looking to launder cash from illegal trades.
They mostly run on trust and rarely have documentation or receipts, and frequently have no bank accounts. As a result, hawala banking is illegal in Germany if they have failed to gain authorisation from the country’s banking regulator Bafin.
NRW Justice Minister Peter Biesenbach said that the raids were a major step in tackling the problem of “illegal cash flows”.
Whether the funds that move between Turkey and Germany were from illegal sources or not is now being investigated. The network is also used for legal money movements, for example by migrants who have no bank account and are looking to send money back to their families.
Arrest warrants have been issued against six people who face charges under the country’s Payment Services Supervision Act, which can be punished with up to five years’ imprisonment. They also reportedly facing an investigation for the formation of a criminal organisation.
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