Court says he used brokers to launder millions of dollars obtained through illegal drug sales.
A US federal court has found Indian American Harinder “Sonu” Singh guilty of engaging in a “hawala”-type money laundering scheme that used brokers to launder millions of dollars obtained through illegal drug sales.
Federal prosecutors had slapped Harinder Singh with three charges, conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money transmitting business.
According to the Department of Justice, Singh was found guilty on all the three charges within two hours of deliberation that took place on Friday. The sentence will be announced on April 30.
The case is significant in the US judicial history, as this is the first time that someone is found guilty of money laundering through a network of brokers, which is known as “hawala” – a term that has its origin in India, said U.S. Attorney for the Central District of California Nicola Hanna.
Usually, a hawala network operates as a parallel banking system where money is transferred to brokers known as hawaldars, or the hawala dealers located in different countries or cities within a country.
Hawala transactions are done solely on trust basis as there is no transfer of physical cash, nor is there a bank or financial institution involved in it. For example, if an undocumented wants to transfer money to his family in India but is unable to send it through the traditional banking system, he can send it through a hawala dealer. The dealer collects the money in dollars and his accomplice in the receiver’s location delivers the amount in cash at a better exchange rate deducting a commission, which is lesser than the transfer charge levied by the traditional banking system.
According to Singh’s indictment report, he used the hawala network to transfer money he received from narcotics traffickers, including some associated with the Sinaloa Cartel based in Mexico’s Sinaloa province. Federal agents succeeded in wiretapping calls in the Punjabi language that allowed them to track the transfers.
Singh was stopped by the California Highway Patrol in October 2012, which led to the discovery of $274,980 in US dollars. Simultaneously, Drug Enforcement Administration agents monitoring Singh’s Monrovia apartment complex caught his wife carrying a bag found to contain $388,100.
Singh, if convicted, faces a maximum sentence of 20 years for the conspiracy count, and five years for each of the other two charges.