Six Sentenced in $15 Million Underground Money Transfer Scheme

NEW YORK, NY – Six individuals have been sentenced for their roles in a large-scale, unlicensed money transmitting operation that moved over $15 million in a matter of months through an informal system known as "hawala." The sentences, handed down in the White Plains federal court, mark a significant victory for federal investigators in their efforts to curb illicit financial activities.

What is a "Hawala"?

Essentially, a hawala is a way to transfer money, often across borders, without any physical cash actually moving. It relies on a network of brokers who receive money in one location and then have an associate in another location pay out the same amount to the intended recipient. While not inherently illegal, operating such a service without a license from state and federal authorities is a serious crime, as these networks can be used to launder money for criminal enterprises.

The Investigation and Convictions

Between February and September of 2023, the group ran a sophisticated operation, moving approximately $15 million. One of the key figures, Rajendrakumar Patel, 52, was directly involved in 42 cash deliveries that totaled more than $7.7 million.

Neither Mr. Patel nor his co-defendants were licensed or registered to operate a money transmitting business, placing their activities firmly outside the law. The investigation, a joint effort by the FBI, the U.S. Postal Inspection Service, and the U.S. Attorney’s Office for the Eastern District of Kentucky, successfully dismantled the network.

"The outstanding work of our law enforcement partners was essential in bringing this illicit operation to a halt," praised Mr. Clayton of the U.S. Attorney's Office.

The Sentences

The defendants received the following sentences for their convictions on charges of conspiracy and operating an unlicensed money transmitting business:

Rajendrakumar Patel, 52: 27 months in prison

Hirenkumar Patel, 40: 21 months in prison

Brijeshkumar Patel, 32: 18 months in prison

Naineshkumar Patel, 51: 12 months and one day in prison

Nileshkumar Patel, 33: 3 years of probation

Shaileshkumar Goyani, 36: Time served

This case serves as a strong reminder of the legal requirements for money transmitting businesses and the serious consequences for those who operate in the shadows. The prosecution was handled by the White Plains Division of the U.S. Attorney's Office.