The rise of financial markets has made money laundering easier than ever. Almost in every country of the world, the money laundering happens. The schemes typically involve the transfer of money through different countries in making its origins unclear. It is a process where criminals try to disguise the origins of money obtained through illegal activities so it appears it was obtained from legal sources. The international community loses hundreds of billions of dollars every year due to money laundering practices.
Like all the other countries of the world, Pakistan is also facing a significant form of money laundering which makes it lose large amounts of money every year. One of the most sophisticated methods that allow the currency mafia to launder hundreds of billions of dollars is among the red flags that are hardest to detect. The same happened with the country’s one of the most sophisticated exchange companies. The directors of the largest foreign exchange company Khanani and Kalia International (KKI) were arrested on the charges of money laundering and illegal transfer of money of ten billion dollars.
They were arrested by the FIA for being involved in the physical transfer of foreign currency from Pakistan. According to the US Treasury Department, the clients of the KKI included Chinese, Columbian, and Mexican. The authorities revealed that the company managed and transferred more than $16 billion a year and was reportedly managing 40% of the country’s entire foreign exchange currency during 2008.
The KKI Company claimed to be Pakistan’s first certified Exchange Company and had an online due diligence manual along with a franchise policy as well as know-your-client policy. Khanani was renowned for being an amazing strategist and became one of the most powerful people in the country. He was sharp and was very careful of his actions which made him operate for so long without ever being caught. Located in a five-story building the company had their own software house where hundreds of employees were dedicated to build and upgrade the money-transfer software. It connected their branch network across Pakistan with the branches and franchises that were spread around the world.
The dealings of the company were done in Karachi and Dubai as these were the two places where he thought the authorities were not very focused. For many years the exchange company transferred money into or out of the country without arousing the suspicions of the authorities. But the government was under increasing pressure to choke off illicit pathways of money transfer since they were extensively used for terror financing and moving funds from criminal activity. In 2015, Khanani was caught off guard by the American Drug Enforcement Administration in Panama.
The team led by Richard Grant asked for around $1 million of Australian taxpayers’ money in order to trap Khanani into meeting him. A fake drug cartel was created that needed Khanani’s help into legitimizing the black money. One million collected for the purpose could have been easily lost because of Khanani being known to be elusive. For the purpose, certain traps were placed in different parts of the world and one of them was in the parking lot of New Jersey. The $100,000 were cleaned and paid by the Khanani’s handler and a series of traps was set in order to gain his trust.
In order to prove Khanani’s crimes, the team needed to have a proof to present to the court. The agents got the evidence in the form of recorded transactions between Khanani and the fake drug cartel. A place which was easily accessible by Khanani was chosen and the cartel bosses arranged a meeting with him in Costa or Panama. To their surprise, Khanani agreed to come as he was also excited to meet the people whom he had been dealing with. The spot where the $1 million dollar deal was supposed to take place became a place of arrest for the director of KKI.
He was sentenced to jail for five and a half years after at a trial