DUBAI, United Arab Emirates – When four of the biggest European cocaine traffickers sat down to discuss business at the seven star Burj Al Arab hotel in 2017 they couldn’t have felt safer.
They certainly wouldn’t have envisaged that just a few years later two of them would be arrested by law enforcement agents on the streets of Dubai and that the remaining two would be targets of the United States’ Drug Enforcement Agency (DEA).
The four men, Ridouan Taghi, a Dutch Moroccan king pin, Raffaele Imperiale, a senior member of the Italian Naples based Camorra mafia, Daniel Kinahan, an Irish mobster and a Bosnian drug lord named Edin Gacanin, were seated in the Burj Al Arab, where DEA agents observed the coming together of a super-cartel. Between them these four men were, according to the DEA, controlling a third of the cocaine trade in Europe.
But by 2022 Taghi and Imperiale would be staring at prison walls back in their home countries and the remaining two on the run from a DEA-led investigation with bounties on their heads, but effectively trapped in their own prison of luxury without access to their bank accounts, now sanctioned by the US Treasury.
In particular, the arrest and extradition of Dutch Moroccan Taghi in December 2019 to face a raft of murder charges in the fortified courtroom in Amsterdam known as "The Bunker", seemed to mark a huge sea change in the often fragile relationship between the Dubai authorities and European law enforcement agencies. Was this some kind of mirage appearing in the Dubai desert? Or was the United Arab Emirates cleaning up its reputation as a safe haven for some of the world's most wanted criminals.
Co-operation on such arrests and extradition once seemed unthinkable to those criminals who have come to know Dubai as a safe haven. By the beginning of the millennium, a number of criminals were lured to Dubai, attracted by the non-extradition, seven star lifestyle, the lax financial rules, its free-trade zones and its international flavour. One of the early pioneers to use Dubai as a hub was British crime lord Robert Dawes, a man who Europol would eventually place in their top ten of Europe’s most influential and powerful gangsters.
By 1999 Dawes had already established a base on Spain's south coast in Benalmadena, moving hashish and amphetamines and latterly cocaine through Dutch Moroccan contacts in the Netherlands and across Europe.
But investigators began to notice frequent visits he was making to Dubai. Soon he had set up two businesses in the UAE entity, one called Argosta Emirates General Trading and a second, cheekily called The English Laundry, all helped by an Emirates resident who sponsored him.
Any significant crime kingpin knew by the 2000s the benefits of contacts who could launder your ill gotten gains safely. Dawes had discovered the underground secret banking system called Hawala which could seemingly move money magically across the globe with no paper trail. It was a system of banking that was thriving in Dubai.
The Hawala system is broadly a system of moving money across the globe without actually physically moving it. It relies on a system of money brokers called Hawaladars. They transfer the money between each other on a trust basis and using an agreed password before it arrives at its intended destination and at the end Hawaladar pays out the agreed sum to the recipient. Hawaladars can operate legally in Dubai and only as recently as 2021 have they been required to officially register their work.
Dawes also used the businesses he set up in Dubai to make a mockery of its archaic financial laws to such an extent that when 200 kilos of 87 percent purity cocaine linked to him was seized in Madrid in September 2007, he already had a plan to avoid extradition.
A Red Interpol notice ensured Dawes was arrested for this crime in June 2008 in Dubai, but it would be a further three years before the Spanish got their hands on him. Dawes utilised a law in Dubai which held that a person bouncing a cheque would receive a mandatory three year prison sentence. He promptly organised for a complaint to be registered about a cheque bouncing from one of his companies and received a jail term which would take precedence over any outstanding requests for extradition. He used his three years in a Dubai cell to good effect, according to an associate, who cannot be named because he is a witness in a murder case, who visited him there.
"He was not being held in some rat-infested facility being tortured as some people have complained on being arrested in Dubai," explained the associate. "One of his closest people managed to produce a letter saying he had authority to act as Dawes' lawyer even though he had no legal qualifications. As a result of this the man was visiting Dawes virtually every week to supply him with new sim cards for his mobile phone. He was absolutely carrying on his business as normal between 2008 and 2011 while being locked up in Dubai. When I visited him the guards would bring us cups of tea and we had our own room to speak in. The suspicion was he was bribing someone in authority in Dubai."
During his time behind bars in Dubai, Dawes was coordinating a 2 tonne shipment of cocaine coming into Antwerp with the help of his Dutch associate Gwenette Martha, who would later wind up pumped full of bullets on the streets of Amsterdam. Dawes used his time in Dubai to dismantle the case against him in Spain.
A source within the Guardia Civil, one of Spain’s two national police forces, who spoke on condition he was not identified, described the frustration dealing with the Dubai authorities.
“There was no extradition treaty and we respected that Dawes had to serve his time for the cheque bouncing offence. But every time we tried to find out when Dawes would be released, so we could execute his extradition, the Dubai authorities would not tell us,” the source said, speaking on condition of anonymity because they were not authorised to speak to the press. “We had to get the British authorities to intervene eventually and Dawes was arrested a few days after he had been secretly released. By the time the case came to court in Madrid various important bits of evidence which had been seized in Dubai, were lost, and the case collapsed. Make of that what you will.”
The authorities would eventually catch up with Dawes in 2015, when he was arrested and subsequently convicted over a 1.3 tonnes cocaine shipment which was seized in Paris. While he remains incarcerated in a French prison on a 22-year sentence much of his assets remain hidden thanks to the lack of a paper trail from the Hawala system he had been utilising. The authorities suspect he still owns a £10 million villa in Dubai’s exclusive Palm Jumeirah zone.
A senior European intelligence officer who has spent more than two decades investigating the organised crime kingpins who have been roaming the “gold-paved” streets of Dubai, who spoke on condition he was not named, believes the Hawala system of banking is just one of the reasons the UAE entity became an attractive hub for criminals.
“It’s the one place in the world which is the nucleus of high end criminality and the source of your funds is rarely questioned. It’s a place where your status as a crime kingpin is underlined. The top people all know each other and if you are not in Dubai you are not worth dealing with, you are not in the club so to speak,” said the intelligence officer, who was not authorised to speak on the record.
“There’s huge amounts of things they can invest in such as the property portfolios which bring rich returns,” he said. For example, new data revealed this week found Dutch people own more than 1,500 properties in Dubai worth an estimated £553 million (630 million euros).
“They could spend their time in the sunshine without being touched. All the top end crime groups and the controllers of the money sit in Dubai and this is where they can mix, trade their knowledge and do deals without being too worried about the usual surveillance concerns they face in other countries.”
In 2020 a report from the highly influential think-tank Carnegie Endowment for International Peace raised concerns about Dubai’s lax financial structures creating a criminal hub.
It reported: “Dubai is a global financial center, a shopper’s paradise, and an oasis for the world’s well-to-do (but)....part of what underpins Dubai’s prosperity is a steady stream of illicit proceeds borne from corruption and crime. The wealth has helped to fuel the emirate’s booming real estate market; enrich its bankers, moneychangers, and business elites; and turn Dubai into a major gold trading hub. Meanwhile, both Emirati leaders and the international community continue to turn a blind eye to the problematic behaviours, administrative loopholes, and weak enforcement practices that make Dubai a globally attractive destination for dirty money.”
The Europe-based intelligence officer points out that, as the report underlines, the Dubai authorities have in the past been at pains to look the other way.
“As far as the authorities are concerned, they see these guys bringing in huge amounts of money and they are not causing huge amounts of trouble in Dubai. Not a great deal is asked about where your funds are coming from. The criminal kingpins themselves understand it’s not a good idea to shit on your own doorstep and if they follow the rules they are going to feel pretty safe. They also know they are highly unlikely to get whacked on the streets of Dubai like they might do, say in the Costa Del Sol or Amsterdam. They are living a rock star lifestyle in the sunshine.”
“The Hawala system is still the favoured option. They can invest in property in Dubai and get good returns. The underground nature of the Hawala system is very difficult to monitor. These people are bringing huge amounts of money and they are not causing huge amounts of trouble in Dubai.”
Nevertheless at the other end of the coal face, European efforts to tackle the organised crime groups using Dubai as a money laundering hub are having some success.
The arrest of a key member of the Kinahan Organised Crime Group in September reportedly revealed a treasure trove of information which lifted the lid on the continuing use of the Hawala banking system. Johnny Morrissey, a regular Dubai visitor who had been laundering money for the group and other organised crime groups, is believed to have washed around €200 million in 18 months using the Hawala system before his arrest in Spain.
And in July this year an Emirati national, Abdulla Alfalasi, was convicted of running the UK’s biggest network of cash mules who managed to transfer more than £100 million to Dubai in just a year before they were taken down by the National Crime Agency.
“The authorities in Dubai are being helpful now, but they are still inadequate in terms of the resources they have put in place. They are being inundated at the moment with extradition requests. Of course they are doing the necessary, but they could do more,” said the European intelligence officer. “To an extent the UAE authorities do not want to look at it too hard because there's billions of criminal money being invested in Dubai and property is king.”
This is backed by the authors of the “Carnegie” report on the UAE which states: “The central government of the UAE, Dubai officials and the Emirati law enforcement agencies largely possess the technical knowledge and capacity to tackle these challenges. (They) are aware of how Dubai is being used as a conduit for illicit financial transactions. This is a feature, not a bug, of Dubai’s political economy.”
While the recent arrests and extraditions of some of Europe’s biggest drug kingpins have been a welcome sea-change in the relationship with European law-enforcement agencies, a new trend has opened in Dubai: wealthy Russians seeking to avoid sanctions brought in over the Ukraine war have been pouring into the country along with an explosion of cryptocurrency start-ups.
In March this year, in response to the Russian money influx, the Financial Action Task Force placed UAE on the dreaded “Grey” list, meaning its financial institutions were being monitored to improve anti-money laundering systems.
A start-up expert working in Dubai for the past 10 years who spoke on condition he remained anonymous for security reasons, said although the landscape was changing for criminals, deep-pockets still brought influence.
“It’s a different environment now to seven years ago when the Kinahans arrived. We heard one of the Kinahans tried to get out of the country last year but was stopped by the authorities. This was before the UAE froze their accounts. He wasn’t arrested but the writing is clearly on the wall. There have been a lot of Russians and Cryptocurrency guys coming in here but I think since the Grey list came into force, the banks here are making it very difficult for them to open an account.
“We have been super super busy trying to help these guys (the Russian and cryptocurrency investors) out with business accounts but things really are changing, a lot of clamping down going on. Dubai really does not want this tag of being the capital of dirty money so the authorities are trying hard to clamp down. But as you know money does eventually talk.”
It seems however that drug kingpins who are flagged up by European law enforcement investigators are more likely than ever to get their collars felt in downtown Dubai. New mutual assistance agreements recently entered into by the UAE with European governments mean extradition will become more likely for those who have been red flagged. The announcement of a UAE liaison officer to be permanently based at Europol’s headquarters could spell the end for high end criminals seeking sanctuary in Dubai.
One security source with knowledge of the Dubai authorities said: “It’s the beginning of the end for some of those involved in organised crime. This will mean much more intel from the Dubai authorities will be shared with their European crime fighting partners about who is where and what they are up to and reciprocally Europol can flag up European criminal threats based within the UAE. We are not in a situation yet where we can definitively be sure to get extradition but it improves the chances on a case by case basis.”
Carl Fellstrom is the author of ‘Hoods: The Gangs of Nottingham: A Study in Organised Crime’