Baghdad court recovers $1.4 million in fraud case tied to dollar exchange rates

BAGHDAD — The Karkh Second Investigative Court said Thursday it has recovered more than 2 billion dinars ($1.4 million) from two companies found to have profited illegally from exploiting Iraq’s currency exchange system.

In a statement, the court said the firms had used “fraudulent methods” in money transfer operations abroad to obtain exchange-rate differences. It added that the recovery was made “through extensive efforts and under the supervision of the court’s chief judge,” with legal action continuing against other companies suspected of similar schemes.

On Sept. 10, the same court announced the recovery of 5 billion dinars (about $3.5 million) from two other companies accused of manipulating the exchange rate through foreign transfers.

Such schemes typically take advantage of the gap between Iraq’s official rate of 1,300 dinars to the U.S. dollar and the higher parallel market rate of about 1,420. By withdrawing dollars abroad at the official rate and reselling them in Iraq, companies and individuals can make large profits at the state’s expense.

Authorities have stepped up enforcement in recent months. In May, National Security officers at Baghdad International Airport arrested a suspect carrying 113 digital payment cards, national IDs, and SIM cards, which officials said were part of a wider smuggling network.

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