Saudi Arabia arrests 32 in $3bn corruption case

More than 30 people have been arrested as part of a corruption investigation involving bank staff amounting to more than SR11.5 billion. (File/AFP)

• Five people were arrested while trying to deposit SR9.8 million at a bank
• Bank staff among those held over illegal cash transfers, investigators say

JEDDAH: Thirty-two people have been arrested in Saudi Arabia as part of a corruption investigation into the illegal transfer of SR11.6 billion ($3.1 billion) out of the Kingdom.
Saudi Arabia’s Oversight and Anti-Corruption Authority (Nazaha) is taking legal action against those involved.
An official source at Nazaha said that the authority, with the cooperation of the Saudi Central Bank (SAMA), received information that bank employees received bribes from an organized gang of expats and businessmen to accept cash deposits from unknown sources and then transfer the money out of the Kingdom.
“After conducting field investigations, bank account analysis of the involved commercial entities, and linking them to the customs imports, we found that the deposited cash to the bank accounts of these entities was more than SR11.6 billion and was all transferred abroad,” the source said.
The source added that five expats were arrested while on their way to a bank to deposit more than SR9.8 million in cash.
“Twelve bank employees, seven businessmen, five Saudis, two expats, and a non-commissioned police officer were also nabbed for being involved in bribery, forgery and illegally exploiting their job powers for an illicit financial gain, commercial concealment and money laundering,” the Nazaha source said.
The source said that one businessman set up a number of spurious commercial entities under his own name, and under the names of his wife and son.
According to Nazaha, the businessman opened bank accounts and allowed access to some expats, who used the accounts in exchange for monthly payments. The expats deposited cash from unknown sources and, with the collusion of bank employees, transferred the money abroad.
Bank employees received money and gifts from the expats in exchange for their help, the source said.
The businessman also paid SR300,000 to a noncommissioned police officer, the source said, in exchange for stalling charges against him over suspicious financial dealings that were already under investigation by the police.
“He also paid SR4 million to Saudi mediators for their efforts to stall the same case in the Public Prosecution,” said the source, adding that five other businessmen and a bank branch manager were also detained over similar indictments.
According to the source, a businessman recruited one of the arrested expats and enabled him to work freely inside the Kingdom in exchange for monthly payments.
Talat Zaki Hafiz, founder and member of the Saudi Financial Association, told Arab News: “Since 2017, Saudi Arabia has decided to crack down on corruption and corrupt individuals regardless of who they are or their position in both the government and private sectors.”
He said that a committee set up as part of the crackdown and headed by Crown Prince Mohammed bin Salman has succeeded in returning more than SR100 billion back to the government as well as fixed assets and other money illegally earned by individuals accused of misconduct.
Hafiz believes this “excellent move” by the government will guarantee justice in the Saudi financial system.
“This will also ensure fair dealings in all our government transactions.”
He explained the term “unknown sources” as money that cannot be traced or confirmed by legal and legitimate sources.
Hafiz said that the corrupt individuals pursued different channels to disguise the original source of the “dirty money.”
“They may create artificial businesses, buy fixed assets and financial securities,” he said.
According to Hafiz, SAMA has granted any bank operating in Saudi Arabia the ability to seize provisions when it suspects fraud or wrongdoing.
Saudi legal consultant Dr. Majed Garoub told Arab News that international treaties and agreements allow countries to trace and confiscate money that has been illegally earned or smuggled outside countries.
“There are international cooperation departments in the Ministry of Interior and Public Prosecution that demand such money. This happens in coordination with the Ministry of Foreign Affairs, after, of course, they (prove) the money has been embezzled or taken illegally,” said Garoub.
This can happen only after a court ruling, he added.
Large amounts of money that have been transferred to bank accounts outside the Kingdom could be regained, said Garoub, but only after long and relatively complicated legal and judicial procedures.
“With their efficiency, the Saudi authorities will be able to get the money back,” he said.
Garoub said that the entire process, including the time needed to regain the funds, depends on the country where the money was sent.
“Different countries have different legal regulations and rules,” he said.