How hawala works - KTTC Rochester, Austin, Mason City News, Weather and Sports

Sonia Talati

How hawala works


ROCHESTER, Minn. (KTTC) -- Hawala is a way to move money quickly and efficiently. For many Somalians in Rochester, this means getting in touch with their native land where banks do not exist. Hawala is the only way to send money to families overseas. Money transactions take place completely on the honor system.

However, hawala is also how federal investigators say money was transferred by the two women indicted in the Somali terror fundraising case. A customer, in this case an al-Shabaab fundraiser, approached a hawala broker and gave the name and amount that needed to be transferred. The agent then contacts another agent close to where the recipient lives and that amount of money gets to its respective place oversees.

The money is later wired, usually through a bank like Wells Fargo, agent-to-agent.

Because there is not much of a paper trail, hawala is vulnerable to money laundering. For many Somalis, it exists worldwide because there is no other choice. Barbershop owner, Said Hussain, says "if we could not use this system, then I think our family would not survive."

In the al-Shabaab terrorism case, federal investigators say the Rochester women used the hawala system to divert contributions and pledges to the "mujahidin" in Somalia. The FBI tracked how different hawalas were used to split up contributions and send funds to different al-Shabaab accounts.

Powered by Frankly