By: Danielle McClellan

A former McKinsey and Co. management consultant is currently facing over 30 years in prison after violating the International Emergency Economic Powers Act (IEEPA) and several other violations involving unlicensed money transmitting. Mahmoud Reza Banki, a US citizen, provided money transmitting services to residents of Iran by operating a “hawala” which allows money to be transferred without physically crossing through the banking system. Basically customers transfer money to a “hawala operator” in one country, and then those funds (less any fees) are distributed to recipients in another country by a “hawala associate” on that end. Banki was a hawala operator and received funds from individuals in Saudi Arabia, Kuwait, Latvia, Slovenia, Russia, Sweden, the Philippines, the US and many other countries.

Banki was fully aware that the funds he was receiving were intended to be dispersed in Iranian currency to recipients in Iran. When Banki received the funds he would informed his Iran co-conspirator who then distributed the funds accordingly. It’s alleged that Banki used specific funds that were transferred into his account to make joint investments in the US as well as to purchase a $2.4 million condo in Manhattan and pay $55,000 in one month’s worth of credit card debt, apparently he isn’t the thriftiest spender.

Banki is charged with violating the IEEPA, along with Executive Orders and US Department Treasury regulations; conducting an unlicensed money transmitting business; and conspiracy. He faces a maximum prison sentence of 5 years for each conspiracy and unlicensed money transmitting count and up to 20 years in prison for the IEEPA count.

Information: http://www.ice.gov/pi/nr/1001/100107newyork.htm