Federal prosecutors on Jan. 23 announced the conviction of a Monrovia man in an unusual scheme that used an informal network of brokers to launder money from sales of illicit drugs.
Harinder “Sonu” Singh, 32, was found guilty late Friday by a jury in U.S. District Court of conspiracy to commit money laundering, conspiracy to – and operating of – an unlicensed money transmitting business.
According to the announcement from the office of U.S. Attorney for the Central District of California Nicola Hanna, this was the first major case in the U.S. of someone being tried for laundering drug money through a network of brokers known as hawala.
According to the indictment, a hawala network operates outside of traditional banking or financial systems in a practice that originated on the Indian subcontinent. The transfer of monetary value occurs between the brokers – who are typically located in different countries, but sometimes in different cities in one nation – based solely upon the trust that exists between the brokers. The hawala system relies on trust and long-established connections between brokers that are typically based on familial, ethnic, religious or regional bonds. Through hawala transactions, only the value of the money is transferred, not the money itself.
The indictment alleged that Singh used this hawala network to transfer money he received from narcotics traffickers, including some associated with the Sinaloa Cartel based in Mexico’s Sinaloa province. Federal agents succeeded in wiretapping calls in the Punjabi language that allowed them to track the transfers.
Singh was stopped by the California Highway Patrol in October 2012, which led to the discovery of $274,980 in U.S. currency. Simultaneously, Drug Enforcement Administration agents monitoring Singh’s Monrovia apartment complex caught his wife carrying a bag found to contain $388,100 in U.S. currency.
This operation was part of a much larger four-year investigation in which 17 defendants have pleaded guilty, and several have already been sentenced, receiving prison terms as high as 70 months. Authorities have also seized $15.5 million in cash, 321 kilograms of cocaine, 98 pounds of methamphetamine, 11 kilograms of MDMA (“ecstasy”) and nine kilograms of heroin. The indictment also charges four other defendants who are currently fugitives.
Singh is scheduled to be sentenced by United States District Judge Christina A. Snyder on April 30. He faces a statutory maximum penalty of 20 years in federal prison for the conspiracy count, and five years for each of the other two charges.
Economy, education, energy and transportation reporter Howard Fine can be reached at email@example.com. Follow him on Twitter @howardafine.