Court recovers $1.4M in currency fraud case

BAGHDAD — Iraq’s Karkh Second Investigative Court said Monday it has recovered 2 billion dinars (about $1.4 million) from two companies accused of exploiting the country’s exchange system.

In a statement, the Supreme Judicial Council said the firms conducted fraudulent foreign transfers to profit from the gap between the official exchange rate and the higher parallel market rate. The recovery was made “through extensive efforts and under the supervision of the court’s chief judge.” Legal proceedings are continuing against other companies under investigation.

The Central Bank of Iraq sells dollars at the official rate of 1,300 dinars to the U.S. dollar, while the parallel market often exceeds 1,410. Companies obtaining dollars abroad at the lower rate can resell them in Iraq for quick profits.

The Sept. 22 recovery follows a similar case earlier this month, when the same court retrieved 5 billion dinars (about $3.5 million) from two companies. Authorities said the investigations fall under the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015.

Iraq’s exchange system has faced longstanding abuse, drawing scrutiny from the United States and international regulators. In May, National Security officers at Baghdad International Airport detained a suspect carrying more than 100 digital payment cards, IDs, and SIM cards linked to smuggling networks.