On November 25, Russian police detained seven leaders of a large ethnic Central Asian organized criminal group whom they have accused of running an underworld financial operation. Their claim is that this 18 billion ruble-a-year (that’s US$550 million) venture was financing the Hizb ut-Tahrir (Islamic Liberation Party) movement, banned in Russia for its links to international Islamist terrorist organizations. The arrest demonstrates not only Russia’s continuing campaign against jihadist terrorists but also a growing concern about its rise in Central Asia and amongst the Central Asian diaspora.
According to police accounts, the organization, which had more than 40 members, was active in major markets across Russia, including Moscow and the Perm Region. Over 178 million rubles ($5.4 million) were seized in the operation. The syndicate reportedly engaged in fraud, protection racketeering, illegal migration scams and laundering not just its own dirty money, but that of other Central Asians, as well as natives of Azerbaijan, Georgia and Abkhazia. The arrested leaders reportedly held Russian, Georgian, and Uzbek citizenship.
The gang also seems to have been highly structured, with separate sections responsible for each stage of their operation, from collecting the money to transferring it to temporary deposits and then moving funds to shell companies. There were some 120 foreign commercial entities and accounts that they used to launder their funds, and they also made use of the global network of informal hawala “shadow bankers” to move substantial sums internationally without turning to traditional banking channels.
According to the police, they have evidence that the group financed Hizb ut-Tahrir. The organization was banned in Russia in 2003 as an extremist group. With jihadist sentiment apparently on the rise in Central Asia and more than 5 million Central Asian legal migrants and temporary workers in Russia — and unknown number of illegals, but possibly another 2-3 million — the Kremlin is concerned that such extremist views will spread. This is contributing to a wider rise in xenophobia, with migrants from Central Asia and the Caucasus being lumped together as dangerous outsiders, even though their labor is essential to the Russian economy.
Hence, the Kremlin has been cracking down on Hizb ut-Tahrir. On November 14, a Tajik was detained in Moscow on charges of membership and deported, for example, and on November 21, five members were convicted in Chelyabinsk, central Russia.
However, this latest operation is also part of a slowly-expanding campaign against dubious financial institutions and “shadow banks.” Last week, mid-sized Moscow-based Master Bank had its license revoked amidst allegation of a variety of malpractices, including illegal encashment transactions which can be used to hide payments to corrupt officials, gangs or terrorist groups.