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Spanish police arrest 'Europe’s biggest money launderer' in Malaga

Photo via Europol/Guardia Civil

Spanish police arrested one of Europe’s biggest money launderers accused of handling over 200 million euros of dirty money through a centuries old underground banking system known as ‘hawala’.

The suspect, who was arrested in Malaga by the Guardia Civil, is alleged to be linked to Ireland’s notorious Kinahan clan, who police say used a sham vodka brand and a network of companies including one in Gibraltar to hide their identities.

Two other associates of the man were arrested in Spain and 11 property searches were carried out in Spain and the UK.

The main suspect was considered a high-value target by Europol for his involvement in a number of high-profile criminal cases throughout Europe, Europol said in a statement.

Earlier in April of this year, the man and his company were designated by the US Department of the Treasury for providing support to the Kinahan clan.

His arrest follows a complex 18-month investigation led by the Spanish Guardia Civil, who worked together with the British National Crime Agency (NCA), the Dutch National Police (Politie) and the Irish Garda (An Garda Síochána), with international activity coordinated by Europol’s European Financial and Economic Crime Centre.

“Based in Spain, the main suspect and his associates were in charge of collecting large amounts of cash from criminal organisations which they would then ‘deliver’ to other criminal organisations in other countries,” Europol said.

“The money was transferred using the hawala underground banking system, an informal method of transferring money without any physical money actually moving.”

“During the course of the investigation, it is believed that the suspects have laundered over EUR 200 million using this method.”

“The scope of activity of this criminal organisation is worldwide.”

Europol said the main members of the organisation in Spain had created a brand of vodka promoted in nightclubs and restaurants in the Costa del Sol to disguise the source of their earnings.

But data from Spain’s tax agency, the Agencia Tributaria, showed the company did not generate enough profit to support the lavish lifestyles of the people arrested, according to the Guardia Civil.

One of the suspects arrested ran a car dealership and was in charge of providing vehicles to the criminal organisation in which he had built concealed compartments to transport the large amounts of cash undetected.

“In a similar fashion, they had founded a company in the United Kingdom, dependent on another company based in Gibraltar, in order to hide the true identity of the administrators of the companies that were being used to launder the illegal profits using the hawala system,” Europol said.

‘Hawala’ is a trust-based system that has existed for centuries and involves handing cash to a ‘hawaladar’ in one location and having an associate ‘hawaladar’ hading out the same amount elsewhere, with no record of the transaction.

According to the Guardia Civil, the alleged money launderers used a complex modern version of it that involved encrypted codes based on the unique serial number of a banknote, ensuring only the person with the banknote could retrieve the cash.

The investigation was initiated by the Guardia Civil at the beginning of 2021 after a series of actions which led to the seizure of 200 kilos of cocaine and 500,000 euros in cash in vehicles equipped with hidden compartments allegedly owned by the gang.

The case was rapidly brought to Europol due to its international nature.

Europol’s European Financial and Economic Crime Centre has since been providing analytical and operational support, contributing to confirming links with other countries and identifying new connections to extend the operation.

A number of operational meetings were organised by Europol to bring together the national investigators to prepare for the action day. Since then, Europol has been providing continuous intelligence development to support the field investigators.

On the action day, on-the-spot support was provided by Europol financial specialists and analysts who were deployed to Spain to assist with the investigative measures.

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