FBI team in Pakistan to probe money laundering scam

By Rauf Klasra

LONDON: An FBI team is in Pakistan to investigate an international scam involving some Pakistani cabinet ministers, their relatives, top bankers and the mighty stock brokers of Karachi, who have allegedly made millions of dollars overnight from the recent inside trading scheme of the US.

Top sources have disclosed to ‘The News’ that the FBI team was now busy investigating charges of money laundering for al-Qaeda against some top bankers with links with Pakistan’s top government officials, included close advisers to government authorities both in Islamabad and Lahore.

Sources have claimed that Prime Minister Shaukat Aziz is aware of the investigations being conducted by the FBI team against many top people of Islamabad and Karachi as he has discussed the issue with some ministers.

Sources have claimed that the arrival of the FBI team in Pakistan has given jitters among the top echelons in banking, stocks and politics where people are having sleepless nights fearing the FBI’s knock at their doors.

Earlier, it was reported that a 37-year-old Pakistani banker based in New York named Hafiz Mohammad Zubair Naseem was charged for running an insider trading scheme linked to acquisitions involving nine publicly traded United States companies that netted millions of dollars.

This junior investment banker, who worked in Credit Suisse’s energy banking group in Manhattan, is accused of calling an unidentified banker in Pakistan and tipping him about deals shortly before they were publicly announced. The unidentified banker in Pakistan has turned out to be the former head of Faysal Bank (Investment Banking Group), Ejaz Rahim, who while denying any wrongdoing, admitted to a newspaper he made $5 million in a single trade. He has already obtained a bail from USA court.

According to one media report, Naseem and Rahim have a decade-old relationship, which began when Rahim, then employed with American Express Banking Corporation in Lahore, hired Naseem as a subordinate sometime in 1996-97.

Meanwhile, Minister of state Ishaq Khan Khakwani confirmed to The News from Pakistan by phone, that an FBI team was investigating some powerful people of Pakistan who were being accused of having a hand in the multi-million dollars scam. Khakwani said, he can confirm that the FBI is investigating this scandal in Pakistan but he did not tell the names of those who might be questioned by the American investigation agency.

He, however, defended the Shaukat Aziz government and ministers and said they had nothing to do with such scams. But, Khakwani said, if anyone was proved guilty during the investigations by FBI at some stage, then he should be proceeded under the law for indulging in corruption and corrupt practices. He wondered how powerful brokers were minting money and buying big industrial units and banks by using this money.

Khakwani said “we have also to look into one other aspect of this scam that there might be some people who might have invested their money in such schemes with good intentions but they might have no idea that how the things were being manipulated by some bankers and the brokers who were now being investigated by the FBI.”

When asked whether some government ministers and their relatives were being investigated by the FBI, Khakwani said, he had no idea who was being investigated but he can confirm that investigations were definitely underway in Islamabad.

Meanwhile, sources said, the brother of one of the ministers of state, close to the prime minister, was also being questioned by the FBI. Likewise, some top guns linked to a real estate scheme in Lahore were also being investigated. Likewise, sources said, one of the influential advisor of a provincial chief minister operating in Pakistan on behalf of the rulers of one Arab country was also being questioned.

Meanwhile, the media report suggests that the head of Faysal Bank investments saw an opportunity to make millions. He is known to have made billions of rupees in trading on behalf of Faysal Bank, booking loses to bank when they accrued and profits to his personal account when such was the case.

Sources said, one of the known brokers of Karachi who had recently bought some industrial units from the government had also formed a nexus with the accused and allegedly made billions along with a coterie of top bankers and politicians through inside trading that caused stock market crash recently.

Sources said the president of one nationalised bank was also being investigated by the FBI for his alleged role in inside trading. Sources insist that the FBI has also investigated about half of Pakistan’s federal and provincial cabinet ministers, particularly close advisors of top men at the Centre and Punjab.

Sources claimed an FBI team was in Pakistan to see if there was a pattern of inside trading by Hafiz Naseem and Ejaz Rahim; to probe if Gulf country’s Bank was involved in financing international terrorism through money laundering; China’s involvement in the Sukh Chain scheme; the involvement of top Pakistani politicians in the scam. The State Bank has already initiated an enquiry into this but is keeping mum about it as it might jeopardise the entire government at this critical juncture.

http://www.thenews.com.pk/top_story_detail.asp?Id=7964