Whitening of black money through prize bonds

By Farid Sabri

 

The ill-gotten money earned from illicit businesses by smugglers, abductors, drug peddlers, blackmailers, and others is once again being whitened by decades-old method of purchasing prize bonds from bond winners, paying them more than the actual prize amount.

In the absence of any effective anti-money laundering framework, the illicit business is at its peak. It was revealed when a man won 135 times on the country’s prize bond schemes in a short period of 29 weeks.

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It has been learnt by Pakistan Today that the individuals involved in these heinous crimes are busy purchasing the winning bond tickets from venal prize bond dealers and agents who are ubiquitous in the country.

Recently, there were two individuals accused of the same allegations. Kashaf Khan and Malik Abdullah Farooq, the two Pakistani-born British nationals transferred funds abroad and used a large amount of cash to buy an expensive property in the UK, Federal Investigation Agency (FIA) sources told Pakistan Today.

Sources briefed that they had admitted to not winning on the Pakistan prize bond scheme as genuine participants, as they were also found guilty at a UK court regarding money laundering.

An enquiry into the matter was started when the accused, during the investigation, were asked where the cash in the UK bank account came from and they claimed that it is the proceeds of winning many times on Pakistani prize bonds.

However, the National Crime Agency (NCA), Birmingham (UK), the investigators were of the view that it seems impossible and unbelievable that a single man can win the prize bond 135 times in just 7 months. There is something fishy afoot, the suspect may have used criminally earned money to purchase prize bonds that are already known to have won from prize bond agents in Pakistan.

It is worth mentioning here that the Pakistani agencies have paid no attention as the lucky man was paid out 135 times by the State Bank of Pakistan.

Presently, UK’s National Crime Agency is investigating the matter thoroughly.

Pakistan’s prize bond system is in question as the UK authorities believe that prize bond agents and dealers in Pakistan are complicit in the racket of whitening black money.

It may be mentioned here that in 2012, the Parliament had passed a piece of legislation under which, it is now illegal in Pakistan to sell or promote to sell prize bonds unless authorised by the federal government.

At ground, the individuals with ‘looted money’ are laundering illegal funds through prize bonds and unfortunately, the anti-money laundering framework failed to deliver. This has also given rise to a thriving money laundering service in Pakistan.

After legislation, only designated branches of the directorate can offer prize bond tickets. But prize bonds’ dealers in Blue Area, F-7, F-8, F-11, Goldra, Aabpara Market, Raja Bazar, Sadar Market, Nazirabad, and in various other vicinities are actively involved in the selling or purchasing of the prize bonds, an illegal business.

Despite repeated attempts, FIA Director Mazhar Kazakhel wasn’t available for comments.

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