Iraqi Banks Accused Of Sending Money To Iran
The financial system set up in Iraq after the U.S. invasion in 2003 has become a prime target for exploitation, with shady Iraqi banks funneling vast sums of money to Iranian terrorists.
According to a Wall Street Journal report, three banks run by Ali Ghulam wired tens of billions of dollars outside Iraq to fake vendors using fraudulent invoices. These operations funneled U.S. dollars to Iran and its militias, including the Islamic Revolutionary Guard Corps (IRGC), which the U.S. has designated as a terrorist organization.
What’s striking is that this rampant abuse of the system was known to U.S. officials as far back as 2012. The Pentagon had even warned the Obama administration that Iraqi banks were engaging in fraudulent activity, yet no serious action was taken at the time. In fact, during the Obama era, a large-scale investigation targeting Hezbollah—a group closely linked to Iranian-backed activities—was effectively halted, casting further doubt on how seriously these warnings were treated.
The banks, under Ghulam’s control, were moving large sums of money—some estimates suggest as much as 80% of $250 million in daily wire transfers were untraceable. Some of this money ended up in the hands of terrorist groups, and much of the fraudulent activity was hidden under the guise of normal business transactions.
Fake invoices were submitted to make it appear that legitimate imports were happening, but instead, the funds were being sent to Iran’s militias or laundered through obscure companies.
Despite the Fed’s setup to help stabilize Iraq’s economy by holding its oil earnings and sending cash back to Baghdad, the loophole in the system—where Iraqi banks didn’t need to disclose recipients due to the country’s exclusion from the Swift network—created an easy path for bad actors. Once Iran-aligned terrorists saw the opportunity, they began taking control of private banks to exploit the system further.
Audits revealed the extent of the fraud. Ghulam’s banks sent $3.5 billion out of Iraq over six months to a handful of companies in the UAE, with suspiciously rounded sums—red flags for money laundering. It wasn’t until 2022, when the U.S. finally launched an investigation into Ghulam’s operations, that the Fed shut him down almost instantly.
While Ghulam, now living in a lavish $40 million London mansion, insists he had no involvement in money laundering or terrorism, the audits and red flags tell a different story.
The abuse of Iraq’s financial system by gangs and terrorists has undoubtedly contributed to destabilizing the region while feeding billions into the hands of Iran’s dangerous militias.