A money-laundering network, over which a man named as a key figure in the Kinahan cartel has been arrested, was capable of handling €350,000 per day, or €200 million in the last 18 months, according to Spanish police.
The authorities in Spain also said “hot vehicles”, modified to include secret compartments to carry large sums of money, were used by the network.
However, the money-laundering was based on the ancient Hawala system, which is trust-based and does not involve the physical transfer of money between accounts or jurisdictions, but rather brokers, or representatives, of the system in different countries.
When a sum of money is given to a broker in one country or region intended for another person, or criminal gang, a broker in the other location gives the intended recipient the money once they have a designated password. The brokers, who are part of the money laundering network, charge a commission for each transaction. The system generates no record of money ever existing or changing hands and no proof of who owns the cash.
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John Morrissey, a 62-year-old Irish passport holder who has been based in Malaga for many years, was arrested in Spain on Monday and is the chief suspect in the case. He has been named by the US authorities as one of the key figures at the apex of the Kinahan cartel, with the role of money-launderer attributed to him.
Commenting on the operation in the Costa de Sol on Monday that resulted in the arrest of Mr Morrissey, the Spanish authorities said the money-laundering network under investigation was targeted under Operation Whitehall. This involved specialist organised crime units in Spain as well as An Garda Síochána, the British National Crime Agency, US Drug Enforcement Administration, Dutch Police and Europol’s European Centre for Financial and Economic Crime.
Spain’s Guardia Civil said the international investigation had “dismantled the most important international criminal organisation that operated in Spain dedicated to money laundering” which in just over 18 months “could have laundered more than €200,000,000 through the well-known Hawala method”.
[ Kinahan crime gang member arrested in Spain on money laundering chargesOpens in new window ]
In addition to Mr Morrissey’s arrest, a man and a woman were also detained in Spain as part of the same operation. Mr Morrissey and the other male suspect have appeared before the courts in Spain, at a closed hearing on Wednesday, and were remanded in custody. The woman has been released without charge. One person was also arrested in England and 11 searches were carried out in the UK and Spain.
Resilience
Assistant Commissioner Paul Cleary, of the Garda’s organised and serious crime branch, said “the actions that have taken place over the past few days in Spain, highlight the resilience and determination of international law enforcement to combine our resources to disrupt and dismantle” criminal networks.
“An Garda Síochána will continue to work closely with all our international partners, targeting transnational organised crime gangs who profit from drug trafficking and impact so negatively on our society and in particular those networks that cause the most harm to our communities here in Ireland,” he added.
Spain’s Guardia Civil added the inquiry in the money laundering network began at the start of last year when more than 200kg of cocaine and about €500,000 in cash were seized in the province of Malaga in so-called “heated” vehicles, which had “sophisticated concealment systems inside”.
Johnny Cash
Mr Morrissey ran a restaurant in Kinsale, Co Cork, in the 1990s before being targeted by the Criminal Assets Bureau (Cab). He had settled in Kinsale in the mid-1990s having left the UK, where he was involved in organised crime. He bought a building in Kinsale and opened a restaurant in it after reportedly spending an estimated €600,000 to renovate it. He paid for much of the work in cash, leading to him being nicknamed ‘Johnny Cash’.
He was regarded as a larger than life, very sociable figure, and his wealth generated interest from the Garda. When Cab was established in 1996, he became one of its early targets and his properties in Kinsale were searched. He was initially served with a demand for unpaid taxes of more than €100,000 while several hundred thousand euro in cash was seized from him as well as vehicles and jewellery, all on suspicion of being the proceeds of crime.
Gardaí also suspected he was behind threats to kill solicitor Barry Galvin, who was Cab’s first bureau legal officer. Amid the Cab inquiry into his assets, and the investigation into the threats to Mr Galvin, Mr Morrissey fled Ireland and resurfaced in southern Spain, where he became part of the high-end social scene around Malaga.
Through a luxury drinks brand he has been involved with, and which the US authorities have said he owns, he sponsored many social events and often posed with minor celebrities, sometimes sharing the photographs on his Twitter account. Gardaí believe his decision to live so openly, and flaunt his wealth, was part of a tactic to pass himself off as a successful businessman whose sources of income were legitimate.
However, in April of this year Mr Morrissey was one of seven men at the apex of the Kinahan cartel that US law enforcement targeted with financial and travel sanctions. Cartel founder Christy Kinahan and his two sons Daniel and Christopher Junior, who have been named in the High Court in Dublin has the day to day managers of the cartel, were also among the seven men sanctioned.
Nero Drinks
When named by the US authorities as they announced the sanctions at an event in City Hall, Dublin, in April, they said Mr Morrissey “worked for the [cartel] for several years, including as an enforcer”. They added he “facilitates international drug shipments for the organisation from South America” and was also “involved in money-laundering”.
The American Department of Treasury further stated Mr Morrissey was the owner or controller, either directly or indirectly, of the Scottish-based Nero Drinks Company Ltd, which sells luxury alcoholic drinks and is one of the three companies now on the US sanctions list.
Mr Morrissey had, according to the department, “given a significant portion of the business to Daniel Kinahan to compensate for loads of drugs seized by law enforcement”.
The Spanish authorities in their statement on Thursday did not name Mr Morrissey, but referred in detail to the vodka company.
“The main members of the (money laundering) organisation in Spain had created a luxurious brand of vodka promoted in show, parties and events of discos and restaurants in luxury areas of the Costa del Sol, appearing to be a successful brand of drinks,” the Spanish said. “(These) facts that were totally far from reality since, according to the data of the Tax Agency, the mercantile company could not be supporting the standard of living of the detainees.”
It added the same parties had founded another company in the United Kingdom, which was dependent on another form incorporated in Gibraltar. This structure intended to “hide the true identity of the administrators of the companies that were used to launder the money” using the Hawala system.
“Several vehicles have been intervened with double funds inside, cash and abundant documentation and electronic devices, of great interest for the investigation, reason that leaves this operation open, not ruling out new arrests,” the Guardia Civil added in its statement on Thursday.
