Three Men Charged With Running Hawala Scheme Responsible For Illicitly Moving More Than $65 Million Between The United States And The Middle East

Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); and Christopher A. Nielsen, the Inspector in Charge of the Philadelphia Division of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOHANAD AL-ZUBAIDI, SHAKER SALEH MOHAMMED HAUTER, and ABDULKADER NOORI HAMZA with conspiring to operate an unlicensed money transmitting business that was responsible for illicitly moving more than $65 million between the United States and countries in the Middle East, including Yemen, Turkey, Iraq, the United Arab Emirates, and Jordan. 

AL-ZUBAIDI was arrested yesterday morning at his home in New Jersey and presented yesterday afternoon in Manhattan federal court before U.S. Magistrate Judge Robert W. Lehrburger.  HAUTER was arrested last night at John F. Kennedy International Airport in Queens, New York, attempting to board a flight to Turkey, and will be presented today before Judge Lehrburger.  HAMZA is currently at large.  The case is assigned to U.S. District Judge P. Kevin Castel.  

U.S. Attorney Damian Williams said: “This indictment demonstrates our continued efforts to target and disrupt alleged illicit financial networks that are used every day to criminally transfer proceeds across international borders.  Our commitment remains to exposing these unlawful networks and to prosecute those who operate them to the fullest extent of the law.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “These three men are charged with moving more than $65 million in illegal proceeds to the Middle East.  Hawala networks are known to facilitate money laundering and fund criminal organizations abroad, and our investigations look to shut down these networks and stop the flow of dirty money.  IRS Criminal Investigation is committed to following the money to protect the United States from these threats, and we are resolute in building criminal cases against these illicit organizations.”

USPIS Inspector in Charge Christopher A. Nielsen said: “This announcement demonstrates the U.S. Postal Inspection Service’s commitment to stopping anyone from using our products in furtherance of an organized criminal scheme.  As alleged, these defendants went through great lengths to circumvent and deceive financial institutions for personal enrichment while using U.S. Postal Service Money Orders to engage in international illicit financial transactions.  Postal Inspectors will continue to work tirelessly with our law enforcement partners to disrupt networks perpetrating financial crimes and bring all responsible parties to justice.”

As alleged in the Indictment:[1]

Between in or about 2018 through at least in or about 2022, MOHANAD AL-ZUBAIDI, SHAKER SALEH MOHAMMED HAUTER, and ABDULKADER NOORI HAMZA operated an unlicensed money transfer business that was responsible for illicitly moving more than $65 million between the United States and countries in the Middle East.  AL-ZUBAIDI, HAUTER, and HAMZA facilitated hundreds of illicit money transfers, with each transfer ranging from thousands to hundreds of thousands of dollars.  For the illicit transactions they completed, HAUTER, AL-ZUBAIDI, and HAMZA typically earned a commission of between one and six percent of the total amount transferred.  To facilitate these illicit transfers, AL-ZUBAIDI, HAUTER, and HAMZA worked with other members of an international network of money brokers to transfer money through an informal money transmitting system known as “hawala,” which is frequently used by money launderers and other criminals to transfer criminal proceeds abroad.

In furtherance of this scheme, AL-ZUBAIDI purported to operate at least four companies based in Texas or New Jersey:  Itaqwen, LLC, Mirage Energies Inc., Mirage Auto Group Inc., and Mirage Life Style Inc.  In order to open bank accounts and transfer funds through those accounts, AL-ZUBAIDI falsely represented to banks and other financial institutions at which he opened financial accounts for Mirage Energies Inc., Mirage Auto Group Inc., and Mirage Life Style Inc. (together, the “Mirage Companies”) that he used the Mirage Companies to operate an international trading and investment business or to sell cars.  In truth and in fact, and as AL-ZUBAIDI knew, he was not operating a legitimate automobile business (or any other legitimate business) but was operating an unlicensed money transfer business.  Throughout the period charged in the Indictment, individuals, companies, and other illicit money brokers based outside of the United States contacted AL-ZUBAIDI directly — or through other money brokers like HAUTER — to enlist AL-ZUBAIDI to transfer money to others on their behalf in exchange for a fee.

HAMZA, the father of AL-ZUBAIDI, worked directly with AL-ZUBAIDI to operate their unlicensed money transfer business.  For example, HAMZA picked up cash from other members of the scheme (including HAUTER) at various locations, including in the Bronx, New York.  Then, HAMZA delivered that cash to AL-ZUBAIDI directly or used it to purchase money orders that HAMZA later deposited into bank accounts in the name of the Mirage Companies, which were used to complete illicit money transfers.

HAUTER ran his own unlicensed money transfer business based in the Bronx, New York, and served as an intermediary money broker for AL-ZUBAIDI and HAMZA.  HAUTER regularly coordinated unlicensed money transfers for AL-ZUBAIDI and HAMZA by directing customers to them or by enlisting them to complete transactions for HAUTER’s own customers.  In addition, HAUTER regularly connected AL-ZUBAIDI with other money brokers based outside of the United States to facilitate additional illicit money transfers.  Like AL-ZUBAIDI, HAUTER typically received a commission for each illicit transaction he completed.

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MOHANAD AL-ZUBAIDI, 36, of Piscataway, New Jersey; SHAKER SALEH MOHAMMED HAUTER, 51, of the Bronx, New York; and ABDULKADER NOORI HAMZA, 62, of Piscataway, New Jersey, were charged with one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.  AL-ZUBAIDI was also charged with bank fraud, which carries a maximum sentence of 30 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

Mr. Williams praised the outstanding investigative work of IRS-CI and USPIS.  Mr. Williams also recognized the assistance of U.S. Customs and Border Protection.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Matthew J. King and Amanda C. Weingarten are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.