Rep. Keith Ellison pushing bill to free hawala businesses to send money to Somalia

We have written on previous occasions (here is the most recent post) about how banking laws to protect against American money going to terrorists in Somalia have dried up the hawala businesses in places like Minnesota.   Minnesota Rep. Keith Ellison is trying to change the laws so money (remittances) can continue to flow at the rate of $100 million a year to Somalia to help prop up the country.

Here is a lengthy and informative article on the latest news on money transfers from the Daily Planet:

For Aden Hassan, sending $100 a month to his uncle and cousins in Somalia felt like the least he could do. In January, as they were facing a drought-induced famine, most banks were closing accounts with Money Service Businesses, leaving him no way to help them.

Hassan said he felt guilty eating when he knew his family could be left without food or shelter without his support.

But now that a congressional subcommittee is developing a bill that will lower the financial and legal risks and costs banks encounter when holding accounts with MSBs, Hassan may soon find it easier to send money to his relatives.

“Right now the burden is on the banks to comply when really the burden should be on the wiring services,” said Rep. Keith Ellison, D-Minn.

Ellison said the bill would give banks more incentive to do business with MSBs.

Along with commercial banks, MSBs are audited frequently by government agencies, Ellison said. The Bank Secrecy Act puts more pressure on banks to be responsible for keeping records of transactions, when the responsibility should weigh on MSBs, Ellison said.

So, let’s see!—the poor fellow, Aden Hassan, who only wants to send $100 to an uncle every month happens to run a Money Service Business (aka hawala):

Both banks and MSBs have a responsibility to be audited by government agencies, said Hassan, a manager at Cedar-Riverside’s Kaah Express — one of more than 300 MSBs in Minnesota. However, Hassan said banks are more pressured to retrieve records of transactions.

$100 million a year!  And, not all hawalas are legitimate! 

Abdullahi Adan, a University of Minnesota graduate who sends money to his family in Somalia, said it’s necessary for Somalia to receive remittances in order for its economy to survive.

“The entire country relies on it,” Adan said.

The U.S. Treasury Department estimates remittances from American Somalis total $100 million per year.

“If you take this money out, there is no way that this community could supplement the money in remittances in the form of foreign aid,” Ellison said.

Somalia got about $9.3 million in foreign aid in 2011, according to Global Humanitarian Assistance.

“In reality the money transfer industry in Somalia is the only financial sector that really exists there,” said Adan.


Adan acknowledged that the way some use hawalas may not be completely legitimate. [LOL! This is the second to the last line in the story—ed]

Huntington, WV food stamp fraud case has many twists and turns

I haven’t had an immigrant food stamp fraud story in awhile.  I was assuming the Obama Administration was not aggressively prosecuting cases in light of the on-going discussion in Congress about reforming the food stamp program.

But, here is a really interesting case in Huntington, WV where this news channel WSAZ  has had the foresight to list all of their stories on the case since it first broke earlier this year so that readers new to the story could follow the progression up to the recent guilty plea by store manager, Ibrahim Osman Owayda (sounds Somali, does anyone know?).  And, I see that Homeland Security was involved in the investigation.  I bet there is a lot more to this investigation than we see here.

From WSAZ (Huntington, WV):

HUNTINGTON, W.Va. (WSAZ) — A former Huntington store manager has pleaded guilty to defrauding the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program.

Ibrahim Osman Owayda, also known as “Abe,” 34, of Huntington, was a manager of Huntington Mart formerly located at 1117 Hal Greer Boulevard.

Owayda admitted that in June 2010 and until November 2011, he took SNAP benefits and in turn provided cash to customers of the SNAP card. Owayda further admitted that he gave only 50 to 65 cents on the dollar for the SNAP benefits and then pocketed the rest — reaping large profits from the transactions.

Owayda admitted that he redeemed a total of approximately $297,871 in SNAP benefits from the illegal scheme.

Owayda faces up to 5 years in prison and a $10,000 dollar fine when he is sentenced on October 1. He will also owe restitution in the amount of $297,871.

The store was shut down after being deemed a public nuisance by the City of Huntington.

Check it out because the rest of this link has the previous stories on the evolution of the case.

New readers interested in the proliferation of food stamp scams,  mostly at these immigrant-owned or managed convenience stores, should search RRW for ‘food stamp fraud.’  We have posted dozens of cases of this type of fraud—exchanging benefits for cash—and my theory is that this is organized crime generated abroad where would-be store owners use one of several legal programs to get into the US and purchase a ‘mom & pop’ store and set up this sort of lucrative scam.

And, by the way, good luck getting any restitution from these crooks—I’m betting much of their ‘take’ was sent out of the country.