‘It’s very common and it was started by the Lebanese, really, they're the experts at it’
Ex-CAB target Johnny Morrissey was arrested on Monday near Marbella as part of a European probe into money laundering.
Manchester born crime figure Morrissey is regarded as a key enforcer and money-launderer for the Kinahan cartel.
Spain’s Civil Guard said Morrissey is supected of using the “Hawala” method to wash dirty money.
Hawala is described as an informal way of transferring currency without any actual money being moved which originated from an ancient Middle Eastern trading system that used brokers to safely deliver funds.
Today’s crime gangs use code numbers or tokens to ensure the safe transfer of money.
Speaking to RTE, ex-Garda Commissioner Michael O’Sullivan explained that the system is “unfortunately” getting more common.
“It was very common when we were investigating the cartels in South America,” he told Prime Time last night.
“A lot of them (Hawalas) were in South America, working with the South American cartels with the result that it was very difficult to see the money transfers.
“(All it would take is) a phone call from one continent to the other for people to okay a quarter of a million or $1,000,000 and a shipment would come over.
“It’s very common and it was started by the Lebanese, really, they're the experts at it.
“But it was particularly used by crime groups, terrorist groups, and (by those behind) the Bataclan shooting.
“They tracked a lot of the money afterwards to Hawalas in and around various areas in Antwerp and Brussels in Belgium. A lot of the money they were using to buy explosives and to buy arms because they could move money through the Hawalas.”
Due to the fact that the Hawalas operate on an ‘honour’ system, Spain’s Guardia Civil says there is no legal record of these operations or identification of clients, while the origin and destination of funds are also unknown.
“For this reason, they are used by criminal organisations around the world, as well as terrorist groups, serving to hide profits of illicit origin or to send them to tax havens,” the force said.
And in a fascinating insight into the criminal organisation led by the Irish mafia family, Spanish detectives revealed they believed the cash had not been physically moved out of Spain but spread throughout the world by using the system.
The informal method of moving money, originating from an Arabic term for transfer or trust and involving a network of brokers, is known to have been adopted by criminal gangs who use code numbers or tokens like banknotes torn in half to prove cash is due.
The arrest of Morrissey, a man international police forces say is a key cartel financier, has further tightened the stranglehold on the Kinahan hierarchy, who are scrambling to shore up their cash flow system.
Gardaí believe Morrissey, described by Europol as one of the Continent’s biggest money launderers, is an important link between cartel boss Daniel Kinahan and his associates.
The 62-year-old’s arrest was captured on police video as he sat bare-chested and in colourful shorts on the couch of his palatial Malaga home, where he continued to live openly despite pressure from global crime-fighting agencies.
The unceremonious manner of his arrest is the least of the Kinahan leadership’s worries – sources say they have now lost one of their main cash handlers.
Morrissey is suspected of having laundered more than €200m in little over a year and a half for various crime gangs and is considered a leading ally of the Kinahan cartel.
His standing within the criminal organisation was confirmed last April when he was hit with financial sanctions by the US government for his links to the Kinahans, along with six other senior cartel members.
The Guardia Civil estimates that Morrissey has laundered more than €200m in 18 months, equating to about €350,000 a day
As he sits in a Spanish jail cell waiting to learn what charges he might face, efforts are already under way to keep the cash flowing.
“Morrissey is the man that deals with the pay,” a source said. “If you need money, he’s the link, and if you need to get money to Dubai, you go to him. But without Morrissey that link is closed – for now at least.
“It will cause issues for the foot soldiers in Dublin, Birmingham, Manchester or wherever, who obviously won’t be happy if they’re not getting paid. And for Kinahan himself, who will be worried about his own cash flow.
“He needs money to stay ahead of the game and keep the show on the road. When that stops, he’s in serious bother, and they will no doubt already be trying to fix this problem.”
While Kinahan attempts to avoid prosecution, efforts are continuing to bring charges against him for organised crime-related offences.
The arrest of Morrissey is the first among the Kinahan Seven, but police forces are confident it will not be the last.
The gang’s hierarchy remain in Dubai as they attempt to stay out of the reach of law enforcement agencies in Europe and the US – including boss leader Daniel, his brother Christopher Jr and their father Christy Sr.
Another senior associate, Crumlin man Sean McGovern, is also in the Middle East. Gardaí are seeking to charge him in relation to murder and organised crime offences.
The other two members of the Kinahan Seven are Ian Dixon, suspected of acting as a cartel accountant, and Bernard Clancy, a key lieutenant tasked by Daniel Kinahan with providing wages to cartel members.
While Morrissey became known globally in April when he appeared on the US government’s sanction list, he had been linked to organised crime in Ireland and the UK for four decades and was one of the first targets of the Criminal Assets Bureau (Cab).
Even the investigation that resulted in him being arrested on Monday pre-dated his designation by the Office of Foreign Asset Control (OFAC).
The Kinahans were not his only affiliation, and police believe he cleaned the dirty money of several different crime groups. Spanish authorities described him as a “high-value target” and “the most important” money launderer there, while Europol believe he was one of the biggest operators in Europe for laundering cash.