A gang who used banks in Manchester to launder more than £20m drugs money for criminals have been jailed.
The money is believed to have been laundered through banks around Manchester using legitimate bank accounts and an ancient Islamic money lending system.
Police were watching the four defendants – Kamran Butt, Steven McKenna, Instar Ahmed and Sean Moore – in two separate undercover operations, codenamed Crocodile and Mosquito.
But they found they were linked when Ahmed and Butt were seen depositing money into the same bank accounts.
The money was transferred to the defendants, who were recruited by operatives in the Middle East, using the ‘Hawala’ system – an informal Islamic way of lending money based on honour agreements and third-party lenders.
A fifth man, named in court as ‘Akhtar’, was also heavily involved – but was deported back to Pakistan by UKBA in 2012 and has not been traced since.
Watched by undercover police, he and Ahmed were seen depositing huge sums of money at banks in Chorlton, Longsight and Manchester city centre.
The two men would travel to branches of Lloyds, HSBC and Halifax together but then pretend not to know each other once inside.
Ahmed also worked in partnership with others in the gang.
Manchester Crown Court heard how on Monday 22 August 2011, police intercepted Ahmed and McKenna and seized three rucksacks stuffed with up to £200,000 in cash.
On another occasion, Sean Moore was seen in company with Kamran Butt in his Mercedes vehicle. Butt was stopped and a bag seized, which was found to contain about £120,000 in cash.
Butt’s Stretford home was searched and a further £10,000 was seized.
Cash receipts in vehicles traced to the showed they were paying in anywhere from £500-10,000 a time.
All the money is believed to have come from criminal gangs, mainly through drug sales.
The criminal cash was given to a Hawala money lender abroad who then transferred the money to a Hawala lender in the UK and gave them a password. This password was then passed onto one of the defendants allowing them to collect the cash. They then paid the money into bank accounts in Manchester which the criminals had access to.
The four defendants were the bottom of the chain – below controllers and then co-ordinators, working as collectors to receive the money, deliver it and pay it into various bank accounts in the UK.
After being caught, all four defendants pleaded guilty – Moore to two charges of money laundering and Butt, McKenna and Ahmed to one charge of money laundering each.
Butt, of Great Stone Road, Stretford, was believed to be behind £12M in laundered cash, and was sentenced to three years and six months.
Ahmed, of Kelstern Square, Rusholme, who is believed to have laundered £10M also received a sentence of three years, six months.
Moore, from Kingfisher Grove, Liverpool, and McKenna, from Toxteth, Liverpool, both received 14 month sentences suspended for 12 months and 12 month supervision orders.
Moore was ordered to carry out 108 hours unpaid work and McKenna 150 hours.
Sentencing, His Honour Judge David Hernandez told the men: “This has been a sophisticated and long running, large scale operation.
“The criminality in respect of this type of offence has been the encouragement it gives to criminals.
“It rewards criminal behaviour and sees dirty money exchanged for clean.”
Up to two million pounds could have passed through Butt’s modest semi-detached home on Great Stone Road, Stretford by the time police pounced.
Log books found there showed he had been a money collector since 2007 – with #37,000 in cash hidden around his house when it was raided by police in 2011.
Recruited to collect and transfer money through the Middle Eastern ‘Hawalla’ system the 47-year-old was paid £8,000 for every £2M he transferred.
Crucially, all the notes recovered were contaminated with higher than normal levels of diamorphine – a drug often used to ‘cut’ illegal substances, showing the link to criminal activity.
Police surveillance had caught him parked in a Mercedes off Henrietta Street in Old Trafford – with fellow defendant Moore pulling up in a separate vehicle before putting a holdall in the boot.
Police found the bag contained £105,000 – which Butt told them was ‘given to him by a friend’.
Taxi driver Ahmed told police he was ‘oblivious’ to what was in a bag handed over to associate Akhtar in one money-laundering exchange.
But police work showed the 56-year-old, of Kelstern Square, Rusholme, could have played a part in laundering as much as £10M.
A rucksack containing £212,000 was found in the footwell of a car being driven by Ahmed and Akhtar in Old Trafford when it was stopped by police in 2011.
Alongside it was a carefully-kept log book detailing cash deposits made to banks adding up to millions of pounds.
A mobile phones found at an address on Lincoln Grove, Ardwick, used by the pair also contained text messages with code numbers relating to bank notes being laundered.
These linked Ahmed to controllers higher up the criminal chain using the Hawalla system to launder money, with exchanges of at least £6,000 a time taking place.
Described by his defence counsel as ‘a simple family man’, he claimed to police he was receiving just #50 for his work for Akhtar, to cover petrol costs as he drove him around.
Dad-of-three Moore, from Longsight, was described as being ‘close the bottom of the food chain’ of the money laundering scam.
Paid #300 to act as a courier, he twice delivered cash amounts of up to £19,000.
The 35-year-old from Kingfisher Close had been drawn into the money-laundering scam through his own financial difficulties, the court heard.
He was caught along with Butt by undercover police surveillance as part of Operation Mosquito when the pair were seen exchanging a holdall of cash.
McKenna, 56 and from Toxteth in Liverpool, was caught after his fingerprints were found on a bag in a car being driven by Ahmed.
In one exchange, he had met Ahmed and Akhtar near the Trafford Centre off Junction 10 of the M60 at Urmston, where a bag was seen being passed to them from a Punto he had driven.
Arrested in March 2012 as part of Operation Crocodile, he already had 25 previous convictions, the most recent for shoplifting household goods, fruit and vegetables – proof, his defence said, of the small amount of money he had made from taking part in the scam.
The Hawala System
Originating from Islamic law, the Hawala system operates through huge numbers of money lenders across the Middle East – and principles of honour through family and religion.
The system operates outside any legal framework – so although not illegal in itself, is often exploited by criminals needing to move large amounts of money without attracting suspicion.
To move money, a customer approaches a Hawala broker in their native city and gives them the money to be transferred.
That broker then contacts a broker in the same city as the recipient, giving them the cash along with a password or code number.
The recipient, given the code by the original customer, contacts the second Hawala broker and uses the password to prove they are the correct recipient and receive the money.
The two Hawala brokers take a small commission and then settle the debt between themselves – using cash or even goods and property.