Pubdate: Sat, 22 Mar 2003
Source: New York Times (NY)
Copyright: 2003 The New York Times Company
Contact:  http://www.nytimes.com/
Details: http://www.mapinc.org/media/298
Author: Benjamin Weiser

PROSECUTORS CHARGE MAN IN MONEY-LAUNDERING SCHEME

Federal prosecutors in Manhattan said yesterday that they had broken up a 
Pakistani money-laundering operation that was being run from the basement 
of a restaurant in Midtown Manhattan.

Prosecutors said that at least some of the money being sent overseas came 
from drug trafficking. The operation was run out of the basement of the 
Kashmir restaurant, on Eighth Avenue and 39th Street.

The United States attorney's office in Manhattan said it had charged 
Shaheen Khalid Butt with money laundering, operating an unlicensed money 
transfer business, currency reporting violations, and conspiring in 
immigration fraud.

Prosecutors said that Mr. Butt's unlicensed business, called Manhattan 
Foreign Exchange, sent more than $2 million to Pakistan between December 
2001 and last month.

Before that, a criminal complaint indicates, the business operated through 
a licensed money-transfer business, and sent more than $33 million to 
Pakistan. That made it one of the New York area's largest remitters of 
money to that country, the complaint said.

Three people were arrested in addition to Mr. Butt. One was charged with 
operating an unlicensed money remitting business, and the others were 
charged in the immigration fraud conspiracy.

Drew Houlihan, a federal agent, said in the complaint that he and other 
agents "observed numerous individuals making frequent deliveries of cash" 
to the exchange, "often in large amounts."

The United States attorney in Manhattan, James B. Comey, said the arrests 
stemmed from an 18-month undercover investigation of Manhattan Foreign 
Exchange that was part of a national task force investigating terrorist 
financing.

The investigation resulted in other arrests around the country, officials said.

Michael J. Garcia, a senior official who oversees the new Bureau of 
Immigration and Customs Enforcement, said, "By dismantling these illegal 
networks, we are denying avenues for terrorist groups to raise and move 
funds in this country."

Mr. Butt's connection to the Kashmir restaurant could not immediately be 
established. Telephone calls to Manhattan Foreign Exchange and the 
restaurant were unanswered. Mr. Butt's lawyer did not return a phone call 
seeking comment last night.

Mr. Butt was released on $500,000 bond yesterday in United States District 
Court in Manhattan.
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