Major forex dealers arrested: FIA to seek Interpol assistance in forex scam

[Naveed Yaseen]

LAHORE: Director General FIA Tariq Pervez, while talking to Geo News, said the government would seek Interpol assistance to arrest those culprits abroad who received illegally transferred currency there.

Revealing the biggest ever monetary-scandal of the country DG FIA claimed that government had figured out culprits who transferred billions of dollars abroad illegally and soon government would take massive action against them in the country as well as abroad.

Meanwhile, dollar dealers across the country including dealers at all the major airports of country are being strictly monitored, sources said.

Earlier, the Federal Investigation Agency (FIA), Lahore arrested two persons accused of running an illegal currency business and initiated an interrogation regarding their alleged involvement into laundering millions of rupees abroad.

The FIA has launched a country-wide crack down against those running a business of ‘Hundi’ and illegal business of currency transfer. As a result, two persons allegedly carrying on illegal business of currency transfer locally known as ‘Hundi’ have been arrested from Gujranwala and shifted to FIA Lahore Headquarter for interrogation.

Assistant Director FIA, Arif Aiwan arrested two persons, Naimatullah (Manager) and Tariq Mehmood (Cashier) associated with a local forex company.

Director General FIA, Tariq Pervez says on the directive of Federal Government some of the persons involved in creating economic crisis in the country were arrested after they were identified.

Talking to Geo News, he said Javed Khanani was arrested from Lahore while Manaf Kalia from Karachi.

He said two persons Rustam Ali Khan and Tariq Mehmood were arrested from Khanani and Kalia’s franchised companies Duniya Enterprises

DG FIA Tariq Pervez said important evidence has been collected in the ongoing operation including computerized database, documents and large amounts of currencies.

He said further investigation is underway after lodging a case in this connection at FIA Gujranwala Region.

http://www.thenews.com.pk/updates.asp?id=59645

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Munaf Kalia admits link to forex swindle: FIA

KARACHI (updated on: November 08, 2008, 21:30 PST): Renowned money changer Munaf Kalia has admitted his involvement in illegal transfer of foreign exchange to abroad, Federal Investigation Agency (FIA) sources told on the condition anonymity.

Munaf Kalia was arrested during raids in Karachi to arrest people involved in illegal transfer of foreign currency to abroad.

Another money dealer Javed Kalia was detained in Lahore.

According to the sources, during the fiscal crisis in previous weeks massive amounts of foreign exchange were illegally transferred out of the country.

Earlier, State Bank of Pakistan (SBP) had warned the Forex companies not to involve in illegal activities.

According to details, in the operation against people who are involved in foreign money scandal FIA Authorities have arrested Chief of Local Money Exchange Khanani and Kalia, Munaf Kalia.

The operation was put in action after intelligence agencies gathered reports regarding illegal activity.

Meantime, some Nadra people have also been arrested. According to sources, these people abetted the money-changers through duplicate identity cards.

Furthermore, Khanani and Kalia office situated at II Chundrigar and through put the country has been sealed off and the security personnel of a federal intelligence agency have been deployed outside the office.

http://www.brecorder.com/latestindex.php?latest_id=9598

[Naveed Yaseen]

Kalia, Khanani held in forex scandal
Confess to transferring billions of dollars abroad illegally; FIA arrests several others, seizes records in raids

By Salman Siddiqui

KARACHI: Munaf Kalia and Javed Khanani, two top officials of the Khanani and Kalia International (KKI), on Saturday confessed to having illegally transferred billions of dollars outside Pakistan for the last five years.

They were arrested on Friday night and were being interrogated by a team led by the Federal Investigation Agency.

Munaf Kalia surrendered late on Friday night after the FIA sent a message to him that if he did not surrender his family would be taken into custody.

Earlier, the agency conducted raids on places pointed out by his colleagues at the KKI. Javed Khanani was arrested in Lahore on Friday night.

The FIA, Lahore Crime Circle, had conducted raids for three days after it intercepted a telephonic conversation on Nov 5 about the illegal transfer of about 0.5 to one million dollars from Gujranwala.

The agency raided a KKI franchise called Dunya International Moneychangers in Gujranwala and seized $ 786,000 and four vouchers of Havala (an illegal way of transferring foreign currency), sources said.

The agency also detained franchise manager Rustam Ali Khan and accountant Tariq Mahmood and seized data about the illegal transfer of greenbacks.

During the interrogation, franchise officials told the FIA that they knew very little about the embezzlement of foreign currency and named Munaf Kalia and Javed Khanani as masterminds of the game.

The FIA-led interrogation team also seized computers and records from the KKI office located on the II Chundrigar Road, Karachi, the sources said.

Officials of the State Bank of Pakistan (SBP) and the government have been expressing apprehension for quite some time about involvement of some money changers in the smuggling of dollars.

Havala and Hundi are the two most popular channels of illegal transfer of foreign currency from one country to another.

The sources said Munaf Kalia and Javed Khanani had confessed that they were asked by various locals to transfer their foreign currency to their relatives and friends living abroad. This smuggling of foreign currency has resulted in a massive downward slide in the country’s forex reserves, which have depleted from over $ 16 billion in Oct 2007 and now stand at below $ 7 billion, the sources said.

As per reports, money exchangers have transferred around $ 10 billion for the last five years from the country. On an average, they were transferring about $ 10 million every day through the “Havala” and “Hundi” system.

They have also reportedly accepted that this smuggling had caused the slump in the shares business at local bourses. Since April 2008, the Karachi Stock Exchange has witnessed a 41 per cent fall in its chief 100-Index.

The sources said the interrogation team has also arrested eight officials of the Nadra, who are accused of issuing fake CNICs on which the illegal transfer of dollars was made. The officials were reportedly arrested from the Nadra offices in DHA, Awami Markaz, Lyari and Keamari in Karachi.

The investigators also detained Dawood, Abdul Wasay, Qasim Ibrahim and Walli Yar from the Yadgar Chowk, Peshawar on Saturday.

Moreover, the FIA also arrested four men at the Karachi Airport last evening, who were carrying dollars, pounds and travellers cheques of about one million dollars.

APP adds: Director Federal Investigation Agency (FIA) Mir Zubair Mehmood has assured the leaders of the Forex Association of Pakistan (FAP) that the agency will not harass innocent money changers.

He told a delegation of the FAP led by its Chairman Malik Bostan here at his office on Saturday that directors of the Khanani and Kalia International (KKI) were arrested after securing proper evidence of illegal transfer of foreign currency.

Other office-bearers of the FAP, including Haji Haroon and Mehboob Moti, were also present on the occasion.

Director FIA said action against the KKI was initiated when record of its franchise Duniya Exchange in Gujranwala showed illegal transactions of foreign currencies under “Hawala”.

“Investigations exposed several transactions of billions of rupees in the past by the Duniya Exchange through the KKI. This encouraged us to confiscate the IT record from the KKI head office in Karachi which provided evidences of all these transactions,” Mehmood said.

The FIA director told the FAP delegation that the State Bank had the authority to take action against illegal money changers as a license-issuing body and the FIA will hand over the arrested persons to the SBP for further legal action.

It may be noted that the SBP had warned money changers to refrain from illegal money transfers to avoid legal action.

Malik Bostan asked the FIA director to suggest his officials not to harass those money changers who were not involved in any illegal activity.

He said that the association will itself hand over such money changers to the FIA if any complaint was received against them.

Hoti said if the FIA harassed money changers they would close their businesses, depriving the country of remittances.

“FAP members collect $ 7 billion foreign exchange annually and give it to the government. If we are targeted and harassed, this money will not be received,” he added.

Talking to APP, Bostan said a similar crackdown was initiated in 1998 by the Nawaz Sharif government. But it was stopped on the request of the FAP and the dollar was brought down from Rs 67 to Rs 50.

He said an emergency meeting of the FAP had decided to hold a meeting with the director FIA to convince him to stop the crackdown against the money changers.

Zubair Azam adds from Lahore: The director FIA, Lahore has revealed that investigation of the case showed that Javed Khanani and Munaf Kalia shared equal responsibility in the illegal business.

Sources said that the FIA had found that accounts of illegal transactions were deleted on a daily basis from the computers and no record was kept. The FIA has dispatched the confiscated computers to the Special Investigation Group’s forensic lab to retrieve the deleted files.

The sources said Munaf Kalia would be brought to Lahore in two or three days for further questioning.

DG FIA Tariq Pervez, while talking to The News, confirmed the raids but declined to disclose any further details. He said it was the first day and investigations were under way. However, he said the Economic Crime Wing of the FIA had been tasked with the responsibility of collecting intelligence reports regarding activities of money changers.

http://www.thenews.com.pk/top_story_detail.asp?Id=18240

[Naveed Yaseen]

FIA to probe forex smuggling scandal
By Ikram Hoti
ISLAMABAD: The FIA is taking over a foreign exchange smuggling investigation from Pakistan Customs after making arrests of a number of big shots in the foreign US dollar outflows scandal, say credible sources.

They said the FIA is also being handed over a Customs Intelligence (CI) case that suffered long for want of conclusive evidence on account of CI-ANF wrangle over seizure of multimillion-dollar consignment of heroin-producing material. Arrests are expected in this case too, said sources requesting not to be identified.

Gangs operating across Pakistan and China were last week busted after the Pakistan Customs seized substantial consignment of Pakistani currency a fortnight ago which was being transported from China in exchange for foreign currencies like US dollar, pound sterling and euro at Sost border. The smuggling of currency out of Pakistan contributed to a substantial crunch on the country’s forex reserves and jacked up their open-market prices over the past 3-4 months.

The seizure and the high-level inquiry, including interrogation of one such gang members, brought the relevant government agencies closer to deeper information on the racket, and the subsequent investigations resulted in the arrests on Saturday, say these sources.

Talking to The News spokesman for Federal Board of Revenue (FBR), Mahmood Alam said, “Pakistan Customs made the seizure and it is already conducting a high-level inquiry.”

The FIA officials pointed out that the gangs in China were only some of the operators that were buying up foreign currencies in Pakistan and smuggling them out of the country, not only to China but to India and Iran as well.

The other case FIA is taking over relates to the inconclusive inquiry into the identity and arrest of importers of huge heroin-producing material into Pakistan.

A gang of three Pakistanis had been unearthed that was behind the shipment of history’s largest consignment of heroin-making material caught by Pakistan Customs on March 23, 2008. The Senate Committee on Narcotics Control was also kept on board on this issue, but no inroads could be made into the gang network.

The Director General ANF and the Chairman FBR had to represent their respective sides at the hearing of conflicting claims over the seizure of a container at the Karachi Port.

The shipment was caught by the Customs with convincing evidence presented to the Senate Committee with photographs and the container’s original seal of import. However, the ANF-Customs wrangle continues to prevent conclusion of investigations that could do more.

One of the three men that formed the purported gang included Kamran Iskandari an importer-cum-clearing agent now in ANF custody. The other two were, Amir Khan and Randhawa.

It was a Pakistani company by the name of M/s Randhawa in Korea that shipped this, as the committee was told.

To the members of the committee, the ANF took the plea that Customs was attempting a cover-up, while the FBR pleaded that the ANF was trying to make an unjust claim on the seizure.

The consignment caught by Pakistan Customs contained hazardous materials worth hundreds of millions of dollars. Later, the Customs top authorities confirmed to The News that it was Sana Trading Company, Karachi, in whose name the shipment arrived. However, ìthis company disowned the shipment, only to further complicate the issue and to obstruct investigations.î

http://www.thenews.com.pk/top_story_detail.asp?Id=18247

[Naveed Yaseen]

Clampdown on foreign exchange firms: FIA nabs four for illegal trading of dollars
RIZWAN BHATTI
KARACHI (November 09 2008): At least four money changers, including a CEO of a leading company, were arrested on Saturday by Federal Investigation Agency (FIA) on directives of Interior Ministry to start raiding suspected exchange companies, to curb cross-border smuggling of dollars, sources said.

The crackdown had a positive impact on rupee value which in some cases shot up by 100 paisa against dollar in the open market. Sources said that the State Bank of Pakistan (SBP) was conducting a probe into the exchange companies for last three weeks to ascertain reasons for hike in the value of dollar. However, as the central bank lacked legal support Foreign Exchange Regulations Act (FERA) 1947, it could not do anything effective against the exchangers, they said.

Therefore, the SBP recently requested the government to clamp down on exchange companies suspected of involvement in what the bank claimed 'dollar monopolisation', sources said. Thereby a special FIA cell was set up by the Ministry of Interior after SBP request to investigate and, if found guilty, take legal action against exchange companies suspected of smuggling and illegal transfer of dollar.

Sources said a special FIA team, led by Mir Zubair, raided the head office of Khanani & Kalia International (KKI), a leading exchange company located at Saima Trade Tower I I Chundrigar Road, late at night between Friday and Saturday. According to sources, the raiding party took all record, computers, harddisks and data of foreign currency on transactions in their custody and sealed the office. Some four employees of the company were also arrested.

They said those arrested included Munaf Kalia, CEO, KKI, and general secretary of Exchange Companies Association of Pakistan, Karachi and Anees, Jaweed and Saleem Lahore on charges of illegal trading and cross-border smuggling of foreign exchange, particularly the dollar.

On Thursday, an FIA team Lahore raided a franchise of KKI in Gujranwala and arrested two employees, with some evidence of illegal currency transfer, said sources, adding that the Karachi raid was a continuation of Thursday crackdown. They said the Agency had decided to shift the arrested KKI staffers Karachi to Lahore, where an FIR has already been launched against the exchange firm.

Meanwhile, a delegation of exchange companies met FIA officials in Karachi and requested for release of KKI employees, but the request was turned down before completion of investigation. However, a positive impact of the crackdown was witnessed in the currency market, where the rupee climbed by Re 1 to Rs 80.50 Rs 81.50 to a dollar.

http://www.brecorder.com/index.php?id=834490

[Naveed Yaseen]

KKI director arrested in Lahore
MUHAMMAD SALEEM
LAHORE (November 09 2008): A raiding team of Federal Investigation Agency (FIA) has arrested Director of Khanani and Kalia International (Pvt) Ltd, Javed Khanani, in a case involving transfer of millions of dollars abroad, through 'Hundi'.

The FIA team made the arrest his residence in Gulberg area late on Friday night, following alleged transaction of huge amount of forex Gujranwala through Duniya Enterprises, which is a franchise of Khanani and Kalia. The FIA also obtained remand of Javed Khanani and is interrogating him to get further details of the scam.

His arrest, however, has caused scare among moneychangers in Lahore, as FIA is further keeping moneychangers under vigilance in a bid to stop illegal transfer of forex abroad. However, action would only be taken after accurate information and solid proofs.

Sources said that FIA is expanding the scope of its investigation, as some fake ID Card numbers were used by the moneychanger firm. Sources in the FIA told Business Recorder that after continuous depreciation in rupee value, the FIA Crime Circle team received information that some moneychangers and foreign exchange companies were involved in transfer of forex abroad through 'Hundi'.

On November 5, a team of FIA Crime Circle, Lahore, following a raid at Duniya Enterprises, Gujranwala, which is a franchise of Khanani and Kalia, arrested its Manager, Rustam Ali, and Accountant Tariq, with 'Hawala' money of Rs 786,000. The FIA team also seized computers and Identity Cards.

On their pointation, the FIA team late on Friday night arrested Director of Khanani and Kalia International (Pvt) Ltd, Javed Khanani, his Gulberg residence here. A case has been registered against him under Electronic Transaction Ordinance. Moreover, Khanani and Kalia's two offices situated at Mecleod Road and Gulberg, Lahore, were found locked.

Sources told this scribe that the State Bank of Pakistan had also called a report about this incident FIA high-ups. The central bank had introduced strict regulations and also warned the forex companies not to involve in illegal activities. The SBP may take action vis-à-vis cancellation of licence of Khanani and Kalia in the light of the report of FIA.

http://www.brecorder.com/index.php?id=834484