Saudi worker remitted US$213m to Dubai, India, Malaysia, Syria

An Asian man is under arrest in the Kingdom of Saudi Arabia for remitting an estimated SR800m out of the country, according to the Arab News. This staggering figure is the equivalent of around US$213.3m. The man, an immigrant worker whose nationality is not mentioned in the Arab News story, transferred money through Saudi banks’ official remittance channels to Dubai, India, Malaysia and Syria. He achieved this by depositing cheques in different branches of banks.

Mismatched profile

The banks suspected the man was a high powered business executive, dealing in international commerce and this was the cover that allowed him to continue transferring the money with relative impunity. Whether the man told the bank this, or they assumed this identity for him is not clear. Research into the man’s business, revealed him to be a waiter at a restaurant, presumably his salary would not require him to make transfers of several million reals back home to the family.

Under questioning by police officers, the man admitted he received a SR150 (US$40)commission for every transfer he made. He had been transferring money for the past three years on behalf of another foreign employee at the restaurant. Although an extra $40 is a significant addittion to his salary, it is far lower than the going rate for laundering money. Serious launderers make a minimum ten per cent of the value they clean, this ensures they are looked after well enough by their ‘employers’ to remain loyal. The man claimed knew nothing about the provider of the funds nor the ultimate beneficiaries of the funds.

Alarm bells

Bank records show the largest transaction was worth SR97m (US$25.8m) sent to a business in Dubai. A transfer so large should trigger alarm bells at a bank, certainly a transfer from a non-client about whom the bank has no background information. Observers put the amount of value transferred out of the country in the hidden economy, wither via informal transfer or commodities, at SR228bn (US$60.8bn) annually.

The money transfer scheme in this story could be obscuring several different red flags. The transactions could be very large scale terrorist financing, or political funding. Anti-money laundering analysts could see elements of tax evasion in the scheme, further investigations may lead to the discovery of politically exposed persons in the network of beneficiaries.

The suspect laundered an enormous amount of money through the Saudi Arabian banking system before he was caught. There may me more cases like this still in operation.

© Compliance Knowledge Platform 2012

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