From the Money Laundering Files: Schenectady Hawala Blues

That was Joe’s first confrontation with The Law.
Naturally, we were easy on him.
One of our friendly counselors gave him
A donut … and told him to
Stick closer to church-oriented social activities
–Frank Zappa, Joe’s Garage, Act I, Scene II

Desperate nerds in high offices all over the world have been known to enact the most disgusting pieces of legislation in order to win votes (or, in places where they don’t get to vote, to control unwanted forms of mass behavior). –Ibid., Act I, Prelude

One of the most interesting Google News Alerts programmed into the unpatented NMM open source Bloomberg box” (Google News Alerts + Gmail, basically) is a standing search on the term “hawala.”

Empire State News, for example, had this recently: A Schenectady man busted for running an informal remittances program that sent disembodied fundage over the Internets to the Sudan.

Although the focus on hawalas is part of the GWOT, no terrorism ties are charged in this case.

Albany – The New York State Police Special Investigations Unit in conjunction with the Albany Joint Terrorism Task Force, the FBI, the New York State Office of Tax Enforcement Criminal Investigations Division and the Attorney General’s Organized Crime Task Force arrested Osman Osman, 51, of 32 Elm Street , Schenectady, NY for Enterprise Corruption and Unlicensed Money Transmitter.

Avoiding Frank Zappa’s Central Scrutinizer:

After an extensive three year investigation culminating in the execution of a search warrant at Osman’s residence, Investigators were able to determine that Osman acted as an unlicensed money transmitter, also referred to as a hawala, and moved over $1.2 million to Sudan over a 21 month period. As a hawala, Osman used a series of individuals and businesses in an attempt to move money in secret to Sudan in order to avoid regulatory scrutiny.

Follow the money:

Most of the money was sent by individuals within the Sudanese community in the Capital District area. The money was sent to unidentified bank accounts and individuals in Sudan.

Other states are apparently starting to classify “unlicensed money transmission” as a crime, and enforce those controls. Michigan, for example, last year.

On January 02, 2008, Osman was indicted by a New York State Attorney Generals Grand Jury on four additional counts of Unlicensed Money Transmission and three counts of Offering a False Instrument for Filing in the First Degree. He remains in the Albany County Jail in lieu of $100,000 bail.

Falsidade ideológica, sort of:

Osman’s wife, Hanan Saeed, was additionally indicted for three counts of Offering a False Instrument for Filing in the First Degree. Saeed was released on her own recognizance.

Hawala how-to:

In the hawala systems most basic form, money is transferred by means of a network of hawala brokers. A customer approaches a hawala broker in one city and presents a sum of money to be transferred to a recipient in another, usually foreign, city. The hawala broker calls, faxes or e-mails another hawala broker in the recipient’s city, gives disposition instructions of the funds minus a percentage fee for the transfer, and promises to settle the debt at a later date.

Why is the Central Scrutinizer bothering these poor people?

Investigators target these illegal operations because criminal and terrorist organizations use hawalas as a means to move illicit funds to anywhere in the world, undetected. Presently there is no evidence of a nexus to terrorism in this case.

Is this really necessary? Debate continues, and I do not know enough about the issue to have a loudmouth opinion — along the lines of the Sullivan Analysis of the Kenyan elections crisis, say. I am perfectly free to voice one, of course, but I would feel stupid and Mainardian if I did did so.

I recommend you stop reading stupid blogs and go ask someone who knows what the hell they are talking about.

For a review of some skeptical views on the subject, however, see


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