Iraqi court recovers $3.5 million in currency fraud case

BAGHDAD — The Second Karkh Investigative Court in Baghdad said Wednesday it had recovered 5 billion Iraqi dinars (around $3.5 million) from two companies accused of manipulating the dollar exchange rate through foreign transfers.

“The amount of five billion dinars was recovered from two companies that violated the law to obtain the difference in the dollar exchange rate through foreign transfers,” the court said in a statement. It added that the recovery was made “under the supervision of the chief judge” and confirmed that further action is underway against other firms using similar methods. “Efforts are ongoing to take legal measures against the remaining companies that follow illegal methods to obtain large profits at the expense of public funds,” the statement said.

Schemes like this typically exploit the gap between Iraq’s official exchange rate of 1,300 dinars per U.S. dollar and the higher parallel market rate of ,currently, about 1,420. By conducting foreign transfers or using payment cards abroad, companies and individuals can withdraw dollars at the official rate and then resell them inside Iraq at the black-market price.

The practice has drawn scrutiny from both Iraqi regulators and law enforcement. On May 3, National Security officers at Baghdad International Airport arrested a suspect carrying 113 digital payment cards, several national ID cards, and SIM cards. Officials said the cards were meant for use in a smuggling operation, part of a wider network that loads Iraqi bank cards with dinars, sends couriers abroad to withdraw dollars, and then brings the cash back for resale.

Iraq’s Central Bank has repeatedly warned against misuse of bank cards and foreign transfers, citing the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015. The Kurdistan Region’s Security Agency issued a similar warning earlier this year, cautioning travelers not to carry multiple cards or engage in trading them.