Baghdad court recovers $14 million in exchange-rate fraud case

BAGHDAD — A Baghdad court on Sunday recovered more than 21.4 billion dinars (about $14 million at the official rate) from two companies accused of using fraudulent transfers abroad to profit from the dollar exchange-rate gap, the Supreme Judicial Council said.

The Second Karkh Investigation Court, which handles integrity and money-laundering cases, recovered 21.424 billion dinars from two companies “violating the law to obtain the dollar exchange-rate difference through money transfers out of the country by fraudulent means,” the council said in a statement.

The court’s chief judge supervised the recovery, the statement said. It added that legal action would continue against other companies using similar unlawful methods “to obtain large profits, harming public funds.”

The statement did not name the companies, say how much money they had transferred or say whether anyone had been charged.

In such schemes, dollars obtained at the official rate through transfers or bank-card withdrawals abroad are resold inside Iraq at the higher market price.

The same court has announced at least three similar recoveries this year. On Jan. 18, it recovered 6 billion dinars (about $4.5 million at the time) from one company.

The largest came on Feb. 16, when the court recovered 30 billion dinars (about $23 million at the time) from another company. On May 20, it recovered 2 billion dinars (about $1.5 million at the time) from two companies.

On Sunday morning, Baghdad exchange shops sold $100 for 168,500 dinars, about 11% above the official rate of 152,000, according to 964media’s daily rate check. Central Bank Governor Nizar Nasser Hussein said Thursday that the gap between the official and parallel rates had narrowed to 9% from 24%, according to parliament’s media office, which did not say how the figure was calculated.

The dinar was devalued on Oct. 7. The Central Bank now buys dollars from the Finance Ministry at 1,500 dinars, sells to banks at 1,510 and sets the public rate at 1,520, up from 1,300, 1,310 and 1,320. The government says it plans to push the parallel rate down to 155,000 dinars per $100.