Alleged money launderer transferred €2.5 million to 13 countries with no banking license, court hears

A man arrested in connection with an investigation into a suspected cell of Islamic extremists transferred a total of around €2.5 million to 13 countries in the space of two years.

Ebrahim Ahmad, a Syrian national, had been arraigned on October 20, charged with money laundering, offering banking services without a licence and conspiracy to commit an offence in Malta. 

He had been arrested in connection with a magisterial inquiry into the publication of terrorism-related materials on social media by a number of Syrian nationals residing in Malta. Seven men were subsequently charged with terrorism-related offences last April.

When the case against Ahmad continued on Wednesday, a police inspector from the Financial Crimes Investigation Department (FCID) testified before magistrate Donatella Frendo Dimech, explaining that around mid-April this year, the department had been asked to assist the antiterrorism squad on an investigation into a group that was spreading pro-ISIS material. The FCID’s expertise had been needed to look into the financial aspect of the case, he said. The defendant, Ahmad, was known as “the banker,” and would use the Hawala money transfer system to pay for travel and other goods and services, the inspector said.

Ahmad was found not to have any bank accounts in Malta, but in spite of this, was registered with the VAT and Inland Revenue departments as a self-employed plasterer. He had also been given a Maltese social security number, but had never received any social benefits, said the inspector.

Ibrahim Ahmad and his brother Ahmad Ahmad had been arrested in a police operation conducted jointly with the Counter Terrorism Unit, the Special Intervention Unit and others. Ahmad Ahmad is being charged with terrorism-related offences in separate proceedings, he said.

During the anti-terror raid, the police officers had to force open the front door to the apartment in question, finding three men, two women and four children inside - all relatives of Ahmad.

While searching the apartment, the inspector had looked out of a bathroom window that opened onto the shaft and noticed an object that appeared to be a mobile phone at the bottom. It was retrieved and found to have a picture of the defendant’s youngest son on the lock screen.

“At first he tried to justify his financial dealings by claiming that he would help the local Syrian community in dealing with banks in Turkey,” said the inspector. “Later, he admitted to using Hawala to transfer money to a relative in Syria and another man on the Turkey-Syria border.”

Ahmad told the police that he would travel abroad every so often to deliver the money and explained how the transfers would take place.

More importantly, data recovered from his mobile phone showed that the men who were currently accused of terrorism offences had used his services to send money to their families in Syria.

The device also contained receipts from overseas companies that are involved in money transfers, involving 13 different countries, which include Australia, Belgium, Iraq, Syria and the UAE.

“In 2 years he transferred a total of around €2.5 million….He would charge 3-8% on the money transferred. Sometimes up to 10%,” said the inspector, explaining that the amounts transferred were also reflected in chat records with his overseas contact in Syria.

An MFSA representative testified next, to exhibit any licences relating to banking or financial services that had been issued to the defendant.

“It appears that the MFSA never granted a licence to Mr. Ebrahim. He never had, nor does he hold a licence from the MFSA,” reported the witness.

A licence allows its holder to lend, hold deposits, withdraw money and provide insurance services, he said, in reply to questions from the prosecution.

Legal procurator Colin Galea, who is assisting the defendant together with lawyer Nicholas Mifsud, cross-examined, asking “where the line is drawn between acting as a bank and lending €50 to my brother.”

“Can a person receive a sum of money, travel to another country and pass it on to a third party? “ the lawyer asked. “Does he require a licence to do so?” 

“If used legitimately he can,” replied the witness, who went on to explain that a banking licence “means you can accept deposits and lend money.”

“So if I’m not holding other people’s money and I’m not lending money, does that mean that I don’t require a banking licence?” asked Galea.

Prosecutor Antoine Agius Bonnici re-examined the witness, asking whether a licence was needed by individuals wishing to offer a service by transferring money that doesn’t belong to them, abroad. 

Clearly stumped, the witness stuttered about there being “certain limits” to accepting deposits from people and controls being in place. “The bank must see the money,” he added.

“Is Hawala banking an accepted banking practice? Would you need a banking licence for it?” asked the court. The witness replied that he had never heard of it.

As the sitting drew to a close, Galea requested a reduction to the €40,000 bail deposit and €80,000 personal guarantee imposed during Ahmad’s arraignment. He pointed to the court decision in a case filed by Maximilian Ciantar, which established that unattainable bail deposits were a breach of human rights. The court announced that it will be issuing a decree on the matter from chambers.

Recusal in separate terrorism case

Magistrate Frendo Dimech recused herself this afternoon from presiding over another terrorism-related case, against Farhan Mohammed Sheikh and Abdulla Aliwi, two Syrian men who are charged with possession and dissemination of terrorism-related material, after it was pointed out that she had also led the magisterial inquiry.

The magistrate dictated a note in open court, stating that she would be abstaining from continuing to preside over that case, as she had been informed that reference would be made in these proceedings to part of the inquiry in which she had participated and expressed her views through the decrees given.

The case must now be reassigned to another magistrate.

“It’s very obvious that this case shouldn’t have come before me,” the magistrate remarked, rebuking the prosecution for not pointing out this issue as soon as it was informed that she had been assigned the compilation of evidence. “You should have seen this before today…It’s not fair on the judiciary or the defendants who now have to spend another 15 days in preventive custody until the case is assigned to a new magistrate.”

Police Inspectors Jean Paul Attard and Zachary Zammit are prosecuting Sheikh and Aliwi, assisted by lawyers Antoine Agius Bonnici, Francesco Refalo and Rebekah Spiteri from the Office of the Attorney General. Lawyers Jose’ Herrera and Franco Debono assisted the two defendants.