Tag Archive | "Corruption"

The latest corruption news from Iraq – company or government bribes, theft, stealing – brought to you by Iraq Business News

Khalilzad Bank Account Unfrozen


By John Lee.

A bank account belonging to Zalmay Khalilzad, the former U.S. envoy to Iraq, and another belonging to his wife, Cheryl Benard, have been unfrozen by the high court in Vienna, Austria.

According to a report from Bloomberg, the the accounts were unfrozen on 3rd September, a week before reports that the U.S. authorities were investigating him for suspected money laundering.

The couple criticized Austrian authorities’ ability to “unlawfully restrain” them from accessing their accounts.

Khalilzad is said to have transferred $1.4 million to his wife’s bank account in Vienna, money that allegedly came from oil and building contracts in Iraq and the United Arab Emirates that violated U.S. laws.

(Source: Bloomberg)

Posted in Banking & Finance, SecurityComments (0)

Fmr US Ambassador Suspected of Money Laundering


By John Lee.

Bloomberg reports that A US probe into alleged money laundering by former Ambassador to Iraq, Zalmay Khalilzad (pictured), has led Austrian authorities to freeze a Vienna bank account linked to him.

Khalilzad allegedly transferred $1.4 million to a bank account owned by his wife, Cheryl Benard, in Vienna. According to reports, the money came from oil and building contracts in Iraq and the United Arab Emirates that allegedly violated U.S. laws.

The documents alleging the misconduct were said to be part of a cache of sensitive papers retrieved from a garbage bin earlier this year by a Vienna-based blogger.

Khalilzad sits on the board of Dubai-based RAK Petroleum, which operates in Iraq.

(Source: Bloomberg)

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When Extremists Become Bad Bank Managers


This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Paying For The Caliphate: When Extremists Become Bad Bank Managers In Mosul

Up until now, locals in Mosul, the northern city under the control of Sunni Muslim extremists, have not been able to withdraw their money from their bank accounts. That changed last week. However every withdrawal comes with conditions, including a three-person committee that asks where the money came from and a compulsory tax for funding the Islamist’s Caliphate.

Locals in the northern Iraqi city of Mosul have been allowed to enter neighbourhood banks for the first time since Sunni Muslim extremists took over the city. Before this fighters from the group now known as the Islamic State, or IS, have been guarding the banks and not allowing anybody inside.

A day after the official IS radio station in Mosul, Al Bayan, broadcast the message about the banks being re-opened, there was a long queue outside Branch 112 of the Rafidain Bank.

“The instructions that the IS group gave were shocking to anyone who has a bank account,” one of Branch 112’s employees whispered to a cement merchant, Abdullah al-Jibouri, who had come into the bank.

To withdraw money the holder of any bank account has to submit a statement to a three-person committee, all of whom are members of the IS group. The members of the group are allegedly experts in finance.

The committee would also check that the accounts did not belong to, or was connected to, any government institution. Nor could it be in the name of any wanted individuals that the IS group was seeking, or in the name of any Christians, Yazidis, Shiite Muslims or Sunni Muslims that the IS fighters considered an enemy – for example, members of the security forces or local politicians.

If all of these conditions are fulfilled and the account holder gets the committee’s approval, then money may be withdrawn.

Posted in Banking & Finance, SecurityComments (0)

US Man Charged with Iraq Investment Fraud


By John Lee.

A 51-year-old American has been charged in federal court with defrauding the co-founders and investors of a company out of approximately $175,000, relating to proposed investments in Iraq.

Prosecutors in Connecticut assert that Joseph T. Morris claimed to have extensive military and business experience in Iraq, and was the company’s in-country manager in Iraq.

According to the Wilton Bulletin, the company’s initial focus was on establishing a pizza restaurant at the U.S. consulate compound in Erbil; it also proposed establishing a business to distribute and install specialty window film on vehicles and at hotels, homes and government buildings that would protect windows and windshields from blast and breakage, and provide heat retention, ultraviolet shielding, and privacy.

The indictment alleges that Mr. Morris used fraudulent emails and photographs, falsely representing that a lease had been signed to establish the pizzeria, that renovations were underway, and that progress was being made towards completing renovations and opening the restaurant.

He also falsely represented that the company had an exclusive arrangement with a specialty window film manufacturer to distribute and install the window film in all of Iraq.

As a result, more than a dozen investors put approximately $175,000 in the company. The indictment alleges that Mr. Morris used large sums of money for his personal use.

(Source: Wilton Bulletin)

(Court image via Shutterstock)

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Afren Shares Slump, “Unauthorised Payments” Investigated


By John Lee.

Shares in Afren plc have fallen by more than 30 percent on the London Stock Exchange on Thursday, following the announcement that the Board has temporarily suspended the CEO, Osman Shahenshah (pictured) and the COO, Shahid Ullah, pending the investigation of alleged “unauthorised payments”.

The company has operations at the Barda Rash,  Ain Sifni, and Simrit blocks in Iraqi Kurdistan.

The company issued the following statement to the markets this morning:

“In the course of an independent review on the Board’s behalf by Willkie Farr & Gallagher (UK) LLP of the potential need for disclosure of certain previous transactions to the market, evidence has been identified of the receipt of unauthorised payments potentially for the benefit of the CEO and COO. These payments were not made by the Company. The investigation has not found any evidence that any other Board members were involved.

“No conclusive findings have yet been reached and the investigation is ongoing.

“Egbert Imomoh has agreed to become Executive Chairman and the Board has appointed Toby Hayward, currently Senior Independent Director, as Interim CEO while the investigation continues.

“Whilst the Board has no reason to believe that this will negatively affect the Company’s stated financial and operational position, the publication of the Company’s Half Year Results due on 4th August 2014 will be postponed. The company will announce in due course a new date for the half year results, which will be no later than the end of August.

“The Board has notified the relevant regulatory authorities that the review is taking place and will update the market as appropriate.”

(Sources: Afren, Yahoo!)

Posted in Oil & GasComments (0)

US Contractor Extradition from Iraq


By John Lee.

A former contractor has been extradited from Iraq after six years on the run, making him the first person to be returned to the United States under the U.S.-Iraq extradition treaty of 1936.

Metin Atilan, 54, who has dual U.S. and Turkish citizenship, pleaded not guilty to fraud and conspiracy charges on Monday.

He is charged with conspiracy to engage in contract fraud, conspiracy to engage in wire fraud and wire fraud. If found guilty on all counts, he could be sentenced to 65 years in prison and fined more than $2 million.

(Source: Dispatch)

(Fraud image via Shutterstock)

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Video: Corruption leaves Military Struggling


From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Bribery, corruption, and nepotism have led some analysts to say Iraq’s military has been “built to fail”.

Billions of dollars have been spent rebuilding the military since the fall of Sadaam Hussein, but it’s clearly struggling to fend off the Sunni rebellion.

Al Jazeera’s Shihab Rattansi reports.

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MP Fined for Offering Land for Votes


By Harith Hasan for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

A video of Mahmoud al-Hassan, an Iraqi member of parliament (MP) from the State of Law Coalition, talking to a group of farmers in the province of Diwaniyah has circulated in Iraqi media.

In the video, he is holding a stack of real estate title deeds and telling the farmers that Prime Minister Nouri al-Maliki has sent him to give them plots of land in exchange for their votes in favor of his coalition in the elections. The video has triggered much controversy in Iraq, as its content constitutes several violations of the law.

Hassan is an MP and does not hold any executive position that allows him to distribute title deeds. Moreover, his actions are seen as political extortion, aimed at obtaining votes by using the state’s resources.

The Independent High Electoral Commission (IHEC) fined Hassan 50 million Iraqi dinars ($43,000) for violating the rules for electoral campaigns. Yet, some felt that this punishment was not sufficient and is not commensurate with the seriousness of the offense he committed.

They believe that the IHEC is being lenient with the prime minister’s allies. What is interesting is that Hassan had been a judge in one of the most critical Iraqi courts — the Supreme Iraqi Criminal Tribunal — which was supposed to make him more vigilant about observing laws.

This incident is further indication of the growing tendency among groups that have strong leverage in the executive branch to use the state’s resources and capabilities to achieve political advantage over their opponents. The State of Law Coalition has become increasingly dominant over many of the state’s departments, which facilitated the use of political patronage in gaining followers and votes in a similar way to that by the Kurdistan Democratic Party in Iraqi Kurdistan.

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