39 charged in money laundering case

A federal grand jury indicted 39 defendants in an international money laundering case that includes one person accused of concealing terrorist financing, the U.S. Attorney's office said Thursday.

The four-year undercover investigation targeted defendants in the United States, Belgium, Canada and Spain, U.S. Attorney Rod Rosenstein said. It was unclear whether the indictments affected the financing ability of terrorists, he said.

According to court documents, cooperating witnesses posed as drug smugglers, cigarette smugglers and other criminals, and in one case as a terrorist who wanted to send money to al-Qaida.

They asked the defendants to help transfer money. Those transfers were between Maryland, New York, Spain and Australia using an informal system known as "hawala," court documents said. One, in Barcelona, involved a transfer equivalent to more than $450,000.

Rosenstein described hawala as a "crude form of Western Union" in which someone gives money to a money transmitter in one country and receives a code word or number. The sender then gives the code to a recipient in another country, who uses the code to get the money from the hawala counterpart in that country.

While such businesses are not illegal, they must comply with state and federal requirements, including licensing, reporting transfers of large amounts, and refusing to transfer proceeds from illegal activities.

Rosenstein said cracking down on such activities represents an area of focus by the federal government after the Sept. 11, 2001 terrorist attacks.

"Our goal is to send a pretty strong message that we're out there," Rosenstein said, adding that "these pipelines are being monitored by federal officials."

Raids were conducted in Maryland, Washington D.C., New Jersey and Spain on Thursday, and 32 of the 39 indicted had been arrested as of Thursday afternoon, federal authorities said. The U.S. District Court clerk's office said it did not have records of attorneys being assigned to the defendants.

The defendant accused of accepting money from a witness posing as a terrorist was identified as Saifulla Ranjha, who operated a Washington, D.C. money-transfer business called Hamza, Inc. He conspired with five defendants to launder more than $2.2 million received from the cooperating witness, prosecutors said.

Ranjha relied primarily on a Canadian to arrange bank deposits, and provided the unidentified witness with coded contact information for associates in Canada, England, Spain, Pakistan and Australia, prosecutors said.

An attempt to reach him at Hamza, Inc. was unsuccessful. The business was closed following the raid by federal authorities.

Federal prosecutors are seeking $5.1 million in criminal forfeitures and ownership interest in two convenience stores located in Snow Hill, Md., where raids were also conducted Thursday. A home in the Eastern Shore town was also raided Thursday.

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Associated Press writer Kristen Wyatt in Snow Hill, Md., contributed to this story.