Sharif family laundered quake victims’ aid money to UK: report

LONDON/ISLAMABAD: A new investigative report by the Daily Mail has claimed that Opposition Leader in the National Assembly and Pakistan Muslim League-Nawaz (PML-N) President Shahbaz Sharif and his family were involved in money laundering in Britain.

According to Daily Mail report, Shahbaz Sharif visited Downing Street when David Cameron was prime minister, held talks with successive international development secretaries – Andrew Mitchell, Justine Greening and Penny Mordaunt – and hosted Boris Johnson when he was foreign secretary. Last year, he was guest of honour at a party to celebrate the Queen’s birthday at the British High Commission in Lahore, photographed toasting Her Majesty with mango juice.

Yet, say investigators, according to the report, all the time that DFID was heaping him and his government with praise and taxpayers’ cash, Shahbaz and his family were embezzling tens of millions of pounds of public money and laundering it in Britain. They are convinced that some of the allegedly stolen money came from DFID-funded aid projects.

Last week, The Mail on Sunday – which has campaigned against Britain’s policy of spending 0.7 percent of national income, currently about £14 billion a year, on foreign aid – was given exclusive access to some of the results of a high-level probe ordered by Prime Minister Imran Khan. “We were also able to interview key witnesses held on remand in jail, including a UK citizen Aftab Mehmood,” he report said. He claims he laundered millions on behalf of Shahbaz’s family from a nondescript office in Birmingham – without attracting suspicion from Britain’s financial regulators, who inspected his books regularly.

Last year, Daily Mail claimed disclosing the case against former prime minister Nawaz Sharif, who had built up a London property empire worth £32 million (PKR6.3 billion). Convicted of corruption, he is now serving a seven-year jail sentence. But according to Pakistani investigators, the wealth accrued by Shahbaz and his family is still greater.

The Mail on Sunday can reveal:

Legal documents allege that Shahbaz’s son-in-law received about £1 million (198.7 million) from a fund established to rebuild the lives of earthquake victims – to which DFID gave £54 million from UK taxpayers;

Investigators have launched inquiries into alleged thefts from DFID-funded schemes to give poor women cash to lift them out of poverty and to provide healthcare for rural families;

Stolen millions were laundered in Birmingham and then allegedly transferred to Shahbaz’s family’s accounts by UK branches of banks including Barclays and HSBC;

Self-confessed Birmingham money-launderer Aftab Mehmood told the MoS that he had his accounts audited every three months by Her Majesty’s Revenue and Customs – who failed to notice anything was amiss;

Britain’s National Crime Agency is working closely with Pakistani investigators and Home Secretary Sajid Javid is discussing the possible extradition of members of Shahbaz’s family who have taken refuge in London;

Aware of how widespread corruption is in Pakistan, the report said, DFID has been running a £1.75 million (PKR347.7 million) project designed to ‘reduce the exposure to fraud and corruption’ of UK aid. But although it says it is already vigilant, DFID admits that, to date, it has referred just one individual to the Pakistani authorities for trying to steal UK funds.

On Saturday night, former International Development Secretary Priti Patel, who is widely tipped to rejoin the cabinet if Boris Johnson becomes PM, demanded an inquiry. She told the MoS: “As someone who has served as secretary of state at DFID, I find it shocking that British funds may have been abused, especially given the background of poverty in Pakistan which aid is meant to alleviate.

“We spend millions on anti-corruption initiatives and yet it seems clear that Britain is still a money-launderers’ paradise.

‘It’s vital we now co-operate with the Pakistani investigation, to ensure those allegedly responsible come up against the full force of the law.”

According to Duncan Hames, policy director of Transparency International, corruption often first comes to light through evidence of money-laundering: “First you identify suspicious transactions in the banking system and then you follow the money trail back to discover where they came from.”

Indeed, this is how the investigation into Shahbaz and his family began. After winning election on a pledge to combat corruption, Imran Khan set up a special team to deal with it, the Asset Recovery Unit, headed by a UK-educated barrister. They have examined a series of suspicious transactions running to many millions and shown that Shahbaz’s family’s assets grew enormously during the years he was in power.

A confidential investigation report, seen by the newspaper, says the family was worth just £150,000 (PKR29.8 million) in 2003 but by 2018 their total assets had grown to about £200 million (PKR39.74 billion). Among other properties, Shahbaz owns a 53,000 sq ft palace in Lahore, which has its own large security force.

According to the report, the family’s legitimate income sources could not account for their riches. The money, the report says, was channelled from abroad – via several elaborate money-laundering schemes, in which Britain played a central role.

The report claims laundered payments were made to Shahbaz’s children, his wife and his son-in-law Ali Imran. But it adds that Shahbaz ‘was the principal beneficiary of this money-laundering enterprise, by way of spending, acquisition of properties and their expansion into palatial houses where he lived.’

One of the most audacious schemes was said to be focused on Birmingham. The report lists 202 ‘personal remittances’ from the UK and the United Arab Emirates into the bank accounts of Shahbaz’s wife, two sons and two daughters.

Under Pakistani law, before the recipients could accept these payments into their accounts, they had to sign ‘due diligence’ forms saying they had been sent as ‘investments’ by people they knew personally.

Samples – signed by Shahbaz’s family – have been seen by the newspaper. But investigators claim the reality was different.

“We noticed that someone called Manzoor Ahmed had sent a series of 13 payments from Birmingham worth £1.2 million (Rs238.47 million) to Shahbaz’s wife Nusrat and his sons Hamza and Suleman,” said one investigator, who asked not to be named. ‘But who was he?’

He was traced through his identity card, whose number was on the forms. In the words of the report, he turned out to be ‘a small home-based tuck shop owner’ in a remote village, who scraped a living selling poppadoms. Needless to say, he had never had £1.2 million, nor travelled to England.

Another man who was said to have sent about £850,000 (PKR168.91 million) to Shahbaz’s family from Birmingham via HSBC was Mehboob Ali, a Lahore ‘street hawker’, who lived from taking tiny commissions from collecting old banknotes and changing them into new ones.

He said: “When I discovered my identity had been stolen, my life overturned. I never met any of these people. But my old clients think I must have done something wrong, because the investigators interviewed me.

“Now I try to live by selling glasses of lime juice and it’s hard to feed my family.”

Sending the money to Shahbaz’s family apparently from these and other poverty-stricken ‘investors’ was Briton Aftab Mehmood, the proprietor of Usman International, a money-changing firm in the Sparkbrook area of Birmingham.

Arrested during a visit to Pakistan in April, he agreed to meet the newspaper’s reporter in a hot, airless room at Lahore’s city jail. He explained how the money-laundering worked. “I would just receive a fax from Pakistan with the names of the people I was to wire money to. I knew who they were: they were famous. It wasn’t my business to ask where the money came from. I simply transferred it, and I did it through the proper channels.

“I was audited by HMRC every three months. They wanted to make sure I wasn’t money-laundering. I always passed with flying colours. That meant I had no problem with the banks.”

So where had this money come from? In fact, say investigators, it had been taken as kickbacks and ‘commissions’ from government-run projects and delivered by ‘cash boys’ in bulging sacks to the office of Mehmood’s Lahore contact, Shahed Rafiq. In jail, Rafiq confirmed this, adding: “I don’t know where the cash came from. It was just business.”

The last part of the scheme was ingenious. How did Rafiq ensure that when Mehmood wired money to the accounts in Pakistan, he was not out of pocket? The answer is that Mehmood’s company in Birmingham also did legitimate money transfers and had thousands of clients who wanted to send money to relatives in Pakistan.

If he was asked to send £100,000 (PKR19.87 million) to one of Shahbaz’s sons, he would simply wait until he had funds from UK customers who wanted to send equivalent sums to Pakistan.

Then, instead of wiring the money to his customers’ relatives, it is claimed he would send it under the names of fake investors to Shahbaz’s family’s bank accounts. In Lahore, Rafiq would give the relatives the stolen money which had been brought by the cash boys. The investigators say payments made by this method totalled £21 million (PKR4.17 billion) – but were merely the tip of the iceberg.

They say they have traced a further £9.1 million (PKR1.8 billion) from ‘ghost’ investors who do not exist, and fake loans and investments in family companies. Their value, they claim, amounts to a further £160 million (PKR31.79 billion).

Having established the scale of the money-laundering, the investigation is now moving into phase two – finding out where and how the laundered funds were stolen.

One case has already come to court – a guilty plea by Ikram Naveed, the former finance director of ERRA, Pakistan’s Earthquake Relief and Reconstruction Authority, set up after the devastating quake of 2005, which received £54 million (PKR10.73 billion) from DFID between then and 2012, both for immediate relief and long-term schemes to rebuild victims’ lives.

Naveed is described in Pakistan as the ‘right hand man’ of Ali Imran – Shahbaz’s son-in-law who is married to his daughter Rabia. Naveed pleaded guilty and confessed last November to embezzling about £1.5 million (PKR298 million) from ERRA during the period DFID was funding it, of which he passed on almost £1 million (PKR198.7 million) to Ali Imran.

Naveed said half of this was transferred directly from ERRA’s accounts – a claim confirmed by banking records. Ali Imran has been summoned to answer questions from investigators, but has failed to appear – because he is in London, and refuses to speak to them. He did not respond to a request for comment from the MoS. Other family members, who documents suggest received laundered millions, have also sought refuge in Britain, including Shahbaz’s son, Suleman.

An internal DFID report, drawn up in 2008, warned that ERRA ‘had yet to develop effective and transparent accountability systems’. Nevertheless, DFID continued pumping millions into ERRA. The report stated that DFID aid to ERRA was not ‘earmarked’, but paid into its general budget.

Shahbaz has already been summoned numerous times to answer investigators’ questions, while his son, Hamza, is being held for questioning in custody.

Imran Khan’s Asset Recovery Unit chief Shahzad Akbar said Saturday: “Our investigations have already uncovered evidence of money-laundering on a vast scale, much of it conducted via the UK. The international community needs to get much more serious about this: despite concern expressed by world leaders, money can still be plundered from developing countries such as Pakistan and washed in the global banking system with only minimal checks. Our investigations into the sources of the money which was laundered are ongoing, but it already appears that some of it – perhaps very large sums – may have been stolen from aid and development projects financed by British taxpayers. There have been claims that the current government is doing all this for political reasons. Nothing could be further from the truth. ‘The people of Pakistan have suffered from organised criminal activity on a colossal scale and this has damaged the country’s economy. If we did not pursue these investigations, we would be negligent in our duty. We are working closely with the National Crime Agency and the Home Office. We are grateful for this assistance and we hope it will ensure that theft and money-laundering of this magnitude will never happen again.”

Meanwhile, Shahzad Akbar said in a statement that Suleman Shahbaz is the main culprit in the laundering of UK aid fund for earthquake victims.

Shahzad Akbar said that Suleman Shahbaz was summoned to Pakistan several times in relation to the allegations, but he didn’t appear. He requested the UK government to extradite the suspects or give access to them.

Federal Minister Ali Zaidi said that since years Nawaz Sharif and Shahbaz Sharif have been causing embarrassment to Pakistan internationally. Zaidi alleged that the Sharif family sheltered criminals, pressurised judiciary and tried to bribe them.

Special Assistant to Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan said that a the theft of Shahbaz and sons has been exposed by the British newspaper.

Talking to the media, she said the Sharif family, especially Shahbaz Sharif, plundered 500 million pounds relief aid, donated by Britain for the earthquake victims in Pakistan. She said that Shahbaz also deceived the British people as well as Pakistani nation through massive money-laundering. She said that the shameful act by the ''Corruption King'' Shahbaz Sharif and his gang brought a bad name to Pakistan globally and created a bad impression of the country in the comity of nations as well.

Federal Education Minister Shafqat Mehmood said while commenting on the report that the Sharif family will never sue the British newspaper.

Punjab Information Minister Sumsam Bukhari has said the real face of self-proclaimed Khadim-e-Aala is getting exposed. He said Shahbaz even did not spare donation money of quake victims.