h1

Sheltering the ill-gotten gains of Dawood Ibrahim

April 9, 2013

Dawood Ibrahim, the second wealthiest terrorist ever, and his criminal D-Gang syndicate sit atop a multi-billion empire.  Much of that wealth has been offshored to the Nassau branch of Bank of Baroda in the Bahamas, according to new investigative reporting.

Firms in Dubai have served as the intermediaries for Ibrahim to transfer funds from Pakistan through the United Arab Emirates to secondary tax havens.  Ibrahim is able to get away with his terrorist operations and criminal financial activities because 1) he is basically supported and shielded by the government of Pakistan, and 2) Dubai can facilitate just about any illicit transaction you can imagine.

The Bank of Baroda has denied the allegations.

Thanks to Shreekant Sahu for sending us a link to this excellent article from the India-based news website Firstpost:

Dawood Ibrahim’s blood-money washes up in Nassau

Twenty years after he paid for the bombs which tore through Mumbai in 1993, killing 257 people, organised crime kingpin Dawood Ibrahim Kaskar’s cash has begun washing up on the shores of Nassau island – known for its perfect beaches, perfect weather, and zero-tax, high-secrecy banking. Ibrahim, a Firstpost investigation has found, has emerged as the principal provider of financial services to narcotics traffickers and jihadists across South Asia – a business pegged at over $3.5 billion a year, which uses front companies to access the global financial system.

Ibrahim, transnational crime expert Gretchen Peters says, has become the, “the Goldman Sachs of organised crime. They’re highly transnational, they move billions of dollars annually, and service a wide range of clients from corrupt officials, to drug traffickers to terrorists”.

Last year, highly-placed government sources told Firstpost, the Bank of Baroda’s Nassau branch saw successive wire transfers of several hundred thousand dollars from Dubai-based currency exchanges suspected of laundering organised crime proceeds. The firms, sources have told Firstpost, included the al-Dirham Exchange named in an Indian government dossier on Dawood Ibrahim’s operations.

“From the bank’s point of view”, the source said, “they’re doing nothing illegal, or even wrong. From our point of view, there’s a real concern: whose money is this, and where is it going”? The Bank of Baroda’s Nassau branch did not respond to an e-mail from Firstpost seeking comment.

New Delhi had provided Islamabad with the dossier in 2011, naming at least 11 United Arab Emirates-based entities controlled by Ibrahim’s crime cartel. The list, seen by Firstpost, includes Dolphin Management Services, a firm with multiple interests in real estate and trade. In 2006, Dolphin sought to invest in duty-free investments in the Maldives – an effort which was terminated after India’s concerns were brought to the attention of local authorities. The dossier also names entities which include al-Dirham Currency Exchange, Almas Electronics, Yusuf Trading, Reem Yusuf Trading, Falaudi Trading Company, and Gulf Coast Real Estates.

In addition, the dossier says Ibrahim has interests in three hotels controlled by United Arab Emirates-based tycoon Vardaraj Manjappa Shetty. Shetty has often been named in media reports as an associate of D-company, but vehemently denies the allegations.

Peters, at the Terrorism, Transnational Crime and Corruption Centre at George Mason Univeristy, has been working to answer just that question. In a recent report, she showed how the al-Qaeda and Taliban—linked jihadist warlord Jalaluddin Haqqani funded his operations. The Haqqani network, she wrote, taxes “drug shipments that move across its control zones, and collects tax from other entities that smuggle narcotics through its territory”. It also imports “the precursor chemicals used to process raw opium into morphine base and heroin, including lime, hydrochloric acid and acetic anhydride”.

Even United States taxpayers have ended up funding the Haqqanis. “When USAID contracted the American firm Louis Berger Group in 2007 to build a highway between Gardez and Khost”, she noted, “the contracting firm paid a staggering $1 million annually to a local strongman suspected of having links to the Haqqani network. The 64‐mile highway, which is yet to be completed, has cost about $121 million so far, with the final price tag expected to reach $176 million – or $2.8 million per mile”.

In 2011, the United Nations Office on Drugs and Crime estimated that the Afghan Taliban earned around US$155 million in 2009, mainly from levies on drug traffickers, and the Afghan druglords themselves some US$2.2 billion. The Taliban imposes a 10 percent ushr tax on the poppy harvest, and another 2.5 percent zakat on traders’ earnings.

In a recent testimony to the United States senate, Peters said Ibrahim’s networks launder these funds, enabling it to be funnelled into properties and new businesses. “He’s the super-facilitator”, she explains, “he is the man who has the connections and resources to make investments.

Pakistani defence analyst Ayesha Siddiqa believes these abilities derive from services Ibrahim has rendered to the Pakistani state over the years. “I think it’s because he is part of the jihadi network which is linked to the Pakistani defence establishment”, she says. “He bankrolls a lot of things, and therefore he continues to have a value. Do not forget that many years ago, there was a smuggler called Seth Abid, who had helped construct the nuclear programme. He was given a lot of importance by [former military ruler] General Muhammad Zia-ul-Haq”.

Sushant Sareen, at the Institute for Defence and Strategic Analyses in New Delhi, concurs. “Ibrahim is highly embedded in the system”, Sareen says. “Say, there is a General’s son who needs his studies at an élite American university paid for, or a politician who is in financial trouble, well, Bhai can help”.

In 2001, journalist Ghulam Hasnain wrote that Dawood “lives like a king”. “Home is a palatial house spread over 6,000 square yards, boasting a pool, tennis courts, snooker room and a private, hi-tech gym. He wears designer clothes, drives top-of-the-line Mercedes and luxurious four-wheel drives, sports a half-a-million rupee Patek Phillipe wristwatch, and showers money on starlets and prostitutes”.

Former president Pervez Musharraf has said in an interview that many in Pakistan see Ibrahim as a “hero”, because the 1993 bombings were vengeance for the killings of Muslims in the riots that followed the demolition of the Babri Masjid. Gulbahar Bano, a Bahawalpur-based singer summoned to Dawood Ibrahim’s house in Karachi’s Defence area for a performance, told friends the audience was full of people from the city’s civilian and military élite.

Dawood Ibrahim’s operations matter to Pakistan more than most people understand. Last year’s economic survey showed that the government had missed almost all of its significant macroeconomic targets. GDP growth was 3.7 percent against a hoped-for 4.2 percent; the fiscal deficit climbed over the projected 4 percent to 4.7 percent; large-scale manufacturing grew at just over 1 percent, instead of the target of 2 percent; services at 4 percent, instead of 5 percent. Pakistan’s pre-eminent foreign-exchange source, the textile industry, is in serious trouble because of an ongoing energy crisis, fuelling an economic crisis that economist Shahid Burki as described “the most serious in its history”.

Yet, a tidal wave of cash is flowing into Pakistan. In just the first eight months of fiscal year 2012-13, remittances of $9.23 billion flowed into Pakistan—up over 7 percent from the same period in 2011-12.

Pakistan’s remittance earnings have more than quadrupled since 2001. Part of the reason, some believe, are laws providing tax-exemptions for remittance earnings, which provide businesses an incentive to illegally send funds out of the country and then have them remitted home – much like what is suspected to be happening in India through the Mauritius route. This doesn’t, however, explain the sustained growth of the remittances, leading to suspicion that much of the money is laundered organised crime money, sheltered at home.

Last year, Bank of Punjab officials told Peters “they had more cash deposits in their tiny branch in Landi Kotal in the Khyber Pass, more than $70m, than they took in across the entire city of Lahore”. Landi Kotal is in the heart of Taliban country. There’s also been a surge in inexplicable banking activity in other terrorism-hit areas, like Parachinar.

Even though Karachi is in the middle of something of a civil war, its stock exchange is booming. The stock exchange began at 11,447 points in 2012 to close at 16,905, providing investors sparkling annual returns of 49 percent in spite of an overall decline in foreign investment. “I can tell you”, Peters said in a recent speech, “that Karachi stockbrokers believe that a small group of firms leading the highly speculative growth in the stock exchange are backed by Dawood Ibrahim”…

Previously, Israel has blacklisted Al Taqwa Bank in the Bahamas for supporting terrorism, and a French parliamentary report after 9/11 implicated Bahamian firms for financial ties to Osama Bin Laden.  The Basel Institute rates the Bahamas as a “medium risk” for financing terrorism.

The Caribbean has become an incubator of terrorist growth including the Yucutan, Cuba, Venezuela, Guyana, Haiti, Trinidad, and Florida.

12 comments

  1. bank of baroda denying the allegations is expected
    Why not outside agency make an independent enquiry
    bank should take stringent action against the persons involved
    probably thy may be occupying in a very high position as on date to cover up this matter
    need for independent enquiry is the perfect solution
    How a terrorist group has reported ly f such a big bank
    for all illegal transaations
    What RBI was doing?
    where are our FEMA REGULATIONS/
    what happened to RBI inspection?
    need an answer


    • Agreed, the government of India where Baroda is based should investigate. But one problem may be that Baroda is technically accurate in saying that the Nassau branch complied with Bahamian law. The Bahamas wants to encourage banking. They’re not really going out of their way to “know your customer.”


  2. The Bank of Baroda has denied the allegations-
    Finance minister to make a detailed statement in parliament
    such a reputed bank such wild allegations
    public has a right to know about the correct position
    if true what stringent strict action RBI IS GOING TO TAKE


  3. NEWS AS REPORTED IN MEDIA
    Last year, highly-placed government sources told First post, the Bank of Baroda’s Nassau branch saw successive wire transfers of several hundred thousand dollars from Dubai-based currency exchanges suspected of laundering organised crime proceeds. The firms, sources have told First post, included the al-Dirham Exchange named in an Indian government dossier on Dawood Ibrahim’s operations.

    “From the bank’s point of view”, the source said, “they’re doing nothing illegal, or even wrong. From our point of view, there’s a real concern: whose money is this, and where is it going”? The Bank of Baroda’s Nassau branch did not respond to an e-mail from Firstpost seeking comment.
    what is true?
    RBI TO CLARIFY TRUE POSITION


  4. […] money distributed through terror mogul Dawood Ibrahim’s illegal hawala network.  While it has long been known that Dawood Ibrahim is a bankroller for terrorism, his specific ties to the Indian Mujahideen are […]


  5. Dawood ibrahim has a good person and he is not a terrorist and i am a big fane of him plz dawood sir give me a chane to meet with u plzzz i am 17 year old 03142220677


    • You could probably meet with your hero in Dubai. On the way, you could visit the Taliban’s office in Qatar. Those countries don’t seem to mind harboring people like that.


    • You Bastard son of a Bitch I will kill you and screw your sister and wife Bhadva.


  6. Asking India or RBI to investigate this is like asking the complicit and corrupt to confess…….not going to happen.


    • Why do you say that. Are they controlled by the Congress Party?


  7. […] purchases have been a tactic used by terrorist groups and their financiers in both the UAE (see here and here) and Kenya.  Rediff points out that this isn’t the first time that terrorists in India […]


  8. […] Sheltering the ill-gotten gains of Dawood Ibrahim | Money … – Apr 09, 2013 · bank of baroda denying the allegations is expected Why not outside agency make an independent enquiry bank should take stringent action against the …… […]



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: