Funds from drug trafficking concealed by companies

Abu Dhabi: The Abu Dhabi Criminal Court, which has jurisdiction to examine the crimes of money laundering and tax evasion, convicted 6 accused persons, all Pakistani nationals, and two companies owned by the first accused, for committing money laundering by conducting suspicious banking transactions in an attempt to conceal the origin of funds obtained from drug trafficking.

The court decided to punish each of the accused – A.A.A.S, M.S.K.M.A, S.A.S.M.Z, S.A.M.S.K.S, K.T.D.T.M.D and A.Z.A – with ten years imprisonment with a fine of Dh10 million. They will be deported after serving their sentences. The court also handed down rulings on two companies. One is specialised in advertising and the second in ecommerce, a fine of Dh50 million and confiscation of the funds.

The Abu Dhabi Judicial Department (ADJD) stated that the UAE has an integrated and flexible financial legislative system and a specialised judicial structure to combat financial crimes, which has contributed to reduce money laundering operations and helped to arrest those involved in such activities. The ADJD praised the coordinated efforts between the various judicial, enforcement and financial bodies within the framework of a preventive and dissuasive control system aimed at protecting the national economy.

Capacity strengthened

The recent amendment of the Federal Law on Anti-Money Laundering and Combating the Financing of Terrorism has helped to strengthen the capacity of the various competent bodies to combat these crimes more effectively. The legislation has tightened the penalties for those found guilty of any of these crimes. It has broadened the scope of criminalisation to include anyone who proves to be aware of the criminal or illegal origin of the funds. The amended law considers money laundering as an independent crime and provides that “proving the illicit source of the proceeds should not constitute a prerequisite to sentencing the perpetrator of the predicate offence”.

As to the details of the case; the Federal Public Prosecution of the UAE has forwarded a copy of a drug trafficking case file that was discovered in the capital, to Abu Dhabi Financial Prosecution to conduct a parallel financial investigation into the case within its territorial jurisdiction. The investigations showed that the four accused, who were convicted of drug trafficking were in fact working as a gang comprising people inside and outside the country. The gang members who were located overseas used to deal with the buyer (“consumer”) by directing him/her to the whereabouts of the drugs after depositing the price of the drugs into one of the bank accounts of the accused residing inside the UAE or into the account of one of the two companies.

The amounts were transferred later via foreign exchange offices to people in Pakistan. Nearly Dh2 million were found in the residence of the accused persons. The investigations revealed the involvement of two other persons of the same nationality in the money laundering case. However their involvement in drug trafficking was not established.

The Financial Prosecution found that all of the said bank accounts had recorded a significantly higher turnover, which was not commensurate with the financial activities of the accused. The number of deposit operations on a single account of the first accused reached 50 operations on a single day with values between Dh500 and Dh1,000. The investigation revealed that eight of the depositors had a history of drug addiction. The first accused had different accounts in six banks in the UAE and the second accused had accounts in three banks.

Suspicious transactions

The enquiries also showed that the first accused had accounts in two other banks in the name of two companies he owned, and that the turnover of the two accounts amounted to about Dh8 million in six months, in a manner incompatible with the activities of the two companies. The transactions included suspicious deposit operations not supported by any document confirming the legality of their source. This confirmed that the two companies were used as a cover for laundering money from drug trafficking, with the aim of concealing the source of the proceeds.

On the other hand, the financial analysis of the accounts of the accused persons confirmed a correlation and coordination between these accounts in the context of organised operations. The investigations showed that the method used to receive and withdraw the funds was similar to that used in drug trafficking and that all the money deposited in these accounts was withdrawn by the persons involved in several instalments and transferred to other persons in Pakistan through various exchange offices in the UAE.