CAPITALISM'S ACHILLES HEEL Dirty Money and How to

46 CAPITALISM’S ACHILLES HEEL
dealers who know and trust each other arrange the transactions. In a simplified
example, suppose you want to send $5,000 to someone in Pakistan. You walk
into a hawala dealer in New York City and give him the $5,000 plus whatever
commission he requires, perhaps five percent or $250. You also provide the
name of the person in Karachi who is to pick up the money, and you are given
a code word that person is to use. The New York dealer telephones the Karachi
dealer, with whom he has done business many times, and provides that information.
The designated party in Karachi walks in, identifies himself by name
and code word and, presto, he’s handed the rupee equivalent of $5,000, perhaps
less another commission charged on that end or some profit extracted on
the dollar/rupee exchange rate. New York hawala keeps a record that it owes
Karachi hawala $5,000. Over the next few months, Karachi hawala has the
same sort of transactions with New York hawala for money going the other
way. He keeps a record of what he owes New York. Eventually, if the balance of
what is owed gets tilted excessively on one side or the other, they will settle up
and then start a new set of records. Basically, what flows is, not cash, but accounts
receivable. Hawala, hundi, and chop move tens of billions of dollars
around the sphere. Most of it is in small amounts, often remittances by working
family members in one country sending money to struggling family members
in other countries. It is, however, available to move six and seven figure
amounts and has been an effective mechanism for positioning terrorists funds
where needed.
Finally, you shouldn’t forget the use of plain old credit cards. When you
have money in an offshore bank account, often that bank can issue you a
credit card in its own name, without your name or signature appearing anywhere.
With this you can live high on your ill-gotten gains, and no one is
the wiser. Perhaps the perfect method for maneuvering hidden money has
already arrived: electronic banking. From a bank in the Caribbean, funds
can be transferred via personal computer to a bank account in Europe. With
a credit card on that bank, money can be spent anywhere. Or that bank can
make a credit to a smart card that is usable today in some countries and
could in the future be accepted universally.
So, keep in mind some of these gimmicks, like concentration accounts,
smart cards, credit cards in bank names, the hawala system, asset swaps, cash
smuggling, and so on, as you plan to move your money from place to place.
You never know when one of these techniques might provide just the right
way to meet an opportunity or handle an emergency.