Saudi using PC said to have laundered $1 trillion

Monday, October 25, 2010   E-Mail this story   Free Headline Alerts

WASHINGTON The bank of a Saudi national accused of massive money-laundering has filed for bankruptcy in the United States.

Awal Bank, controlled by a Saudi said to have laundered up to $1 trillion in the United States, has filed for bankruptcy protection in the United States. Awal, controlled by Saudi Arabia's Saad Group and Saudi national Maan Al Sanea, reported that Awal contained assets of between $50 million and $100 million and more than $1 billion in liabilities.

"You have a gentleman in Saudi Arabia, Maan Al Sanea, who is using a PC, who is moving money around the world in circular fashion," Eric Lewis, an expert on money-laundering and attorney for a rival Saudi family, said.

The Chapter 11 petition, filed in U.S. Bankruptcy Court in New York, asserted that Al Sanea owned 47 percent of Awal Bank, with Saad Investments another 48 percent. Both Saad and Al Sanea have been involved in lawsuits in the United States that included Saudi industrialist Ahmed Hamad Al Gosaibi.

"This is all directed by a single Saudi national, using a Saudi Arabian remittance company, or hawala, called the Money Exchange," Lewis told the House Financial Services Subcommittee on Oversights and Investigations on Sept. 28. "The fraud appears to have deprived its victims of $20 billion, making it larger than the Madoff fraud in actual out-of-pocket losses. Yet there were no questions asked, not by banks, not by regulators, not by prosecutors, until the whole scheme collapsed."

In July 2010, a New York State judge rejected a petition to hear the lawsuits against Al Manea. The judge ruled that some of the suits should be filed either in the United Arab Emirates or Saudi Arabia.

Awal Bank and Al Gosaibi's International Banking Corp., both of which operated in Bahrain, have been regarded as troubled financial institutions. In July 2009, the Bahraini Central Bank, pointing to insufficient assets to cover increasing liabilities, took over both institutions. The two banks began to default on loans in 2009, which sparked lawsuits between Al Manea and Al Gosaibi.

In his testimony to the House committee, Lewis said Al Manea also controlled companies in Switzerland and the Cayman Islands. He said Al Manea established a series of firms that could have laundered up to $1 trillion through U.S. banks.

"They were created and used by Mr. Al Sanea to borrow money and then funnel it through the U.S. financial system to dummy customers and then to his own companies," Lewis said.

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