12 Indicted On Iraq Money Laundering Charges

SEATTLE - A federal grand jury in Seattle indicted 12 people in an alleged international money-laundering scheme that funneled more than $12 million to Iraq.

The indictment, handed up Wednesday and unsealed Thursday, alleges that between April 2000 and January 2002, a ring of agents throughout the United States collected money domestically and sent it to a company called Alshafei Family Connect in suburban Edmonds.

The company, owned and principally operated by Hussein Alshafei, an Iraqi native and naturalized U.S. citizen, then shipped the money to London and other overseas cities and eventually to Iraq, the indictment alleges.

The actions violated the International Emergency Economic Powers Act, the indictment states, by sending $12.07 million to Iraq. The indictment includes one count of conspiracy to launder money and 34 counts of money laundering. It charges people in Dallas, Phoenix, Nashville, Tenn., St. Louis, Roanoke, Va., London, Jordan, the United Arab Emirates and Iraq.

Investigators say the money was sent from U.S. cities including New York, Seattle and suburban Lynnwood and then on to England, India, Canada, Brazil, Taiwan, Egypt, Jordan and the UAE.

The funds eventually were forwarded to a business in Iraq called Al-Nour Trading, run by a man whose last name is Fakher and whose alias is Abu Haider, the indictment says.

Alshafei, the owner of the Edmonds business, was to appear before a U.S. magistrate in Seattle Thursday afternoon.

More Seattle Jihadis & terrorists.

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Grand jury indicts 12 in Iraqi alleged money-laundering scheme

By Ray Rivera
Seattle Times staff reporter

A federal grand jury has indicted the owner of a Mountlake Terrace money-transfer company and 11 other people from Washington state to Jordan to Iraq allegedly involved in a money laundering scheme that funneled more than $12 million to Iraq, violating U.S. and United Nation’s trade embargoes.

The 35-count indictment centers around Hussain Alshafei, owner of Alshafei Family Connect, a money-wiring business popular among immigrants wanting to send money to family members in Iraq.

Early this morning, federal agents arrested Alshafei and five other individuals in a nationwide sweep. The arrests took place in Seattle, Nashville, St. Louis, Roanoke, Va., Dallas, and Phoenix.

Search warrants were served in Seattle, St. Louis, Portland, and San Diego.

Today’s indictment is the result of a year-long investigation, according to U.S. Customs agents.

Earlier this year, Alshafei settled a claim with Bank of America for racial- discrimination after it summarily dropped his account.

In a Jan. 9 declaration filed in the civil suit, Alshafei said his customers made deposits into the AFCI bank account and identified people in Iraq to whom they wanted the money sent. Every two or three days, Alshafei said, he would pool the deposits and wire them to a bank in Jordan.

Once the money arrived, Alshafei faxed a list of the intended recipients to his agent in Jordan. Iraqi family members then collected the money from the agent, Alshafei said in his declaration.

Alshafei’s profits came from collecting a service fee on his end.

Elsewhere in his court declaration, Alshafei asserted that he had never conducted any business in Iraq nor sent any funds to any person there.

"It is not possible to send money directly to Iraq because of the trade embargo," he said. He estimated 80 to 90 percent of Iraqi refugees in the U.S. use his business to send money to their family members in Iraq, often to support their survival.

Two days after Alshafei settled his claim against Bank of America, a swarm of FBI agents and U.S. Customs officials raided his office, alleging his operation violated President Bush’s 1990 executive order prohibiting any unauthorized "commitment or transfer, direct or indirect, of funds or other financial or economic resources to the government of Iraq or any person in Iraq."

Money given to Alshafei Family Connect was sent from banks in Lynnwood and Seattle to places outside the U.S., including England, India, Canada, Brazil, Taiwan, Egypt, Jordan and the United Arab Emirates with the intention of feeding the money into Iraq.

The indictment lists 35 such transfers, totaling more than $12 million. In each instance, the recipient was Abu Haider, a resident of Iraq who operates a firm known as "Al-Nour Trading," according to charging documents.

The indictment does not state the intended purposes of the transfers.

Alshafei and others are expected to make an initial appearance before U.S. Magistrate John Weinberg today at 4 p.m. Alshafei’s attorney did not immediately return phone calls this morning.

Ray Rivera: 206-464-2926 or rayrivera@seattletimes.com.

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