Original subtitles

A suburban railway station in Sydney's west.

Commuters head to their platforms

oblivious to the undercover

police who are taking up positions

throughout the station.

In this particular case we got some information, in advance,

that a meeting was going to occur between

those involved in the drug supply side,

and those involved in the money laundering side

and so we had information that at that place there

would be a transaction, an exchange of cash.

The man NSW Police were watching is a drug dealer.

He was at Clyde to hand over $200,000 in cash

to a money-launderer he's never met before.

Money laundering is the backbone of organised crime.

Money laundering is designed to hide proceeds of

crime, and the techniques that are used are vast.

(music)

CCTV captured the meeting.

The drug dealer and the money mule had a clever

method to confirm each other's identity.

One has a bank note and the other has

a photograph of its serial number.

They exchanged a token, which in

this particular case was a $5 note.

That was checked against the blackberry message,

which the other party had to make sure that it

matched, and then the two of them, the males,

walked off together to take part in the exchange.

Shortly after that they were arrested.

The arrests led police to a safehouse in this

building alongside Sydney's Darling Harbour.

It was where a major drug syndicate

was storing a large supply of

ice and ecstasy and millions of dollars waiting to be laundered.

What we found was $4,000,000 in cash, 10 or 12 kilos of ice.

So the $200,000 is a small percentage of that.

The money mule was Ali Naderi, a 41-year-old from Afghanistan.

He was a bit player in a massive

international laundering operation

that was helping wash the profits

of Australian organised crime.

We're talking about the upper

echelons of organised crime here.

We're not talking about opportunistic crime, we're

not talking about back yard sort of operators.

This is high volume, very serious

trans-national organised

crime networks that are well established and span the globe.

There's no doubt hundreds of millions was

going from Australia through that network.

And there's also no doubt that worldwide that network was

responsible for billions of dollars of money laundering.

The money laundering operation was

run by this man Altaf Khanani,

a Pakistani criminal who had evaded capture for decades.

Khanani was a bad dude in the in the money laundering business.

I think just by the sheer volume of

amount of money he was able to move,

the network that he built ah on six different continents,

created an air about him that he was an untouchable,

he was somebody that could not be grabbed by law enforcement.

I always kind of liken him to a James Bond villain.

He fits the mould.

He has a world-wide network,

moves billions of dollars, has all of this at his disposal,

is the leader of a transnational organisation,

and is someone that the world looks as a target.

From his base in the Middle East,

Altaf Khanani laundered drug

money for some of Mexico's most dangerous cocaine cartels.

(music and sirens)

He also moved money for terrorist

groups responsible for attacks in

Mumbai in 1993 and in 2008 which

together killed more than 400 people.

He laundered money for Hezbollah, the Taliban

and other extremist groups including Al Qaeda.

He was working and had moved money for Hezbollah,

ah the Taliban, Dawood Ibraham and many others

that ah obviously are very, very bad people.

This guy was laundering money for anybody

and everybody, he didn't care why.

Altaf Khanani was the number one international controller

as far as organised crime and terrorist

funding was in the world at that time,

and we knew that he was causing

significant impact on multiple countries

throughout the world, and that's why we had to take some action.

(tense music)

This is where the Australian operation

to capture Khanani started.

The Australian Criminal Intelligence Commission, a

secretive agency which targets high-level criminals.

It began as an investigation into unusual international money

transfers from small suburban

operators in Sydney and Melbourne.

It was when we started to investigate that and we

started to seize money and we started to make arrests

that we then started to go further

up the tree and understand who

was behind organising these contracts

and the movement of money.

That's when time and time again Altaf Khanani came up.

As the extent of Altaf Khanani's network emerged, Richard Grant

ran the name past his counterparts

in the United States.

We realised that the Drug Enforcement Administration

had an enormous amount of intelligence on Khanani.

The DEA had a significant amount of the jigsaw.

(hip-hop beat)

For years the frontline in America's

long war on drugs was here in Miami.

Basically, it's you against them,

can you get them to make a mistake

so that you can collect the evidence

necessary to get a prosecution.

It's also home to a specialist team of agents

working for the US Drug Enforcement Administration.

Trying to outwit them, you know, usually we have the advantage

'cause we know we are doing it you

know, we know what they want.

So, a phone call from the Aussies,

we're discussing the case

and during those conversations it was mentioned that

there was a target Altaf Khanani who was

a large scale money laundering target that

Australia was looking at for a for quite some time

and they were asking if we would be interested

in assisting in them and their investigation.

When I heard the name and it

registered and I was like absolutely,

we're you know of course we're going to do it.

(music)

Rob Cassitta is head of the DEA's Group 44 which

conducts covert drug investigations across the globe.

We don't say no you know we're Group 44 we just don't say no.

We got outstanding agents in the

group, outstanding investigators.

And their passion to go after the biggest

and baddest violators in the world.

John Clayton, a Group 44 special agent, spent years

targeting cocaine suppliers across South America.

The Drug Enforcement Administration

is an organisation that targets the

top criminals in the drug trade

when you target the source countries and

the main bosses in these organisations,

you basically you dismantle those organisations 'cause when

you, when you cut the head off a snake, the snake dies.

The DEA agents agreed to a joint

operation targeting Altaf Khanani.

We go after the top tier criminals and in this

case Altaf Khanani was a top tier criminal

who dealt with organisations that ah

their business is death and destruction

and he assisted them in completing

those, those jobs on a day to day basis,

and he's a very, a very dangerous man.

They had decided on Altaf Khanani as a

target, now they needed a plan to get him.

(music)

The intelligence trail started here in

Karachi, where Khanani's family had

long been notorious for street-level

gambling schemes and currency trading.

It's in this trade on foreign currency that actually

their the ah their meteoric rise began to happen.

Up until then, they had

been middling and two-bit players

ah competing with dozens and dozens of others

ah sort of where you know hawking their

wares by shouting at ah at passers-by

on the street and occasionally scoring a big um a

big client in the form of perhaps a government

servant or a rich businessman who would need

to whiten a large of amount of black money.

(road noise)

Journalist Khurram Husain has

followed Altaf Khanani for years.

He says that by the mid-2000s Khanani and his associates were

running one of the biggest currency exchanges in Pakistan.

A company called Khanani and Kalia International.

From any country to any country,

if you wanted to move money without

ah leaving either a trace,

without having your name attached to that

money, or giving that money the aura

of legitimately earned money these were

the people who would do it for you.

Khanani made his money by doing the

vast volume ah and charging commission.

His commissions were low,

relatively low, ah three percent.

And I guess they went up as high as eight, nine, ten,

eleven, depending on difficulty in moving the funds.

(road noise)

From his base in Karachi's

financial district, Altaf Khanani

exploited an ancient money transfer system called Hawala.

It's the first banking system where used

predominantly in the Middle Eastern countries and

you'd be able to walk into one place

ah to an individual who would

keep a ledger and you would be able

to drop money off to that person,

and he would then be able to get message

or word back in the old days to another

individual who kept another set of ledgers and

pay a person for you over great distances.

It's an ancient system still in use today and

it's quite- it's probably one of the most

effective ways of evading law enforcement,

because there's really not a paper trail.

Khanani capitalised on an extraordinary gift for numbers.

He had uncanny ability to recall information

ah he could recall phone numbers from memory when asked

ah he um knew bank account numbers, business

names and again he had several businesses an-and

ah bank accounts and he could he could recall from

memory these numbers which was pretty impressive.

The exchange company became a front

for an international money laundry

which surfaced now and then in police

investigations worldwide including in

Birmingham, England where this cash

drop was caught on police surveillance.

Khanani was washing a staggering volume of money.

We would certainly allege that the Altaf Khanani network were

turning over between 14 and 16

billion dollars US annually a year.

So that sort of gives you the scale of the enterprise

globally that the reach that Altaf Khanani's network had.

Senior Government servants who may have

accumulated large amounts of money

ah as ah taken as bribes or kickbacks in

various schemes, rich businessmen who

would have under-invoiced and over-invoiced

their imports and their exports.

Drug dealers who would need to export

drugs from here and then bring

their money back but show it as

legitimate income ah here in Pakistan.

All manner of money that dare not speak

its name, and yet needs to cross a ah an

international boundary, these were the

people who could handle that money for you.

And they could do it so expertly that no regulatory authority in

the world would be able to detect

the movement of that money.

(music and road noise)

In 2008 the Khanani operation almost came to a halt after

dramatic raids in Pakistan and the arrest of his twin brother.

But the court case collapsed.

It's worth remembering that some of

the most richest and most powerful

people in Pakistan and institutions

in Pakistan ah were the clients of KKI.

There was any number of very powerful

individuals who did not want the light of

day to be shone into this racket for fear

of their own identities being revealed.

And a very, very large and a very

wide spectrum of very powerful

interests mobilised in order to try and protect these people.

There's an allegation that a bribe was paid,

but certainly some of the legislation

perhaps wasn't as strong as what

it is today, and there's an

allegation of political interference.

Suffice to say that those charges didn't proceed.

(music)

Altaf Khanani moved his operation to Dubai,

a notorious bolt-hole for organised crime.

He set up shop there which was basically his headquarters where

he operated and um sat over his ah money laundering empire.

Dubai is a black hole for criminals

and ah especially in the

money world, so it makes it very easy to hide money there.

From this corporate office Altaf Khanani laundered dirty

money from across the globe, including Australia.

Australia Khanani had a client base ranging

from outlaw motorcycle gangs, such as the

Comancheros, um, all the way to Lebanese

ah transnational groups such as Hezbollah.

It was very diverse because um he

was able to establish a network of

associates where, and he was reliable,

and he was fairly quick, so all comers

ah who wanted their money moved ended

up hearing about him or getting to

him, even sometimes they didn't know who

he was they were using his network.

Police believed that almost all of

the Middle Eastern organised crime

profits generated in Australia were

laundered by Altaf Khanani's network.

There was no-one else to go to.

And the other people that they did go to usually were an

associate of his which he would work in some way or another.

Granted there are several other players out there

on the stage but Khanani by far was the biggest.

Open the door!

Search warrant!

Outlaw bikies in Australia including

the Lone Wolves were a major client.

They are involved in large amounts of drugs.

Drug trafficking, drug importation,

and involved in very large

amounts of money laundering, and using the money laundering

system not just to facilitate purchase of drugs, but also to

launder the funds back into assets in Australia and abroad.

And when you say large, give me an

idea of how large we're talking.

Hundreds of millions of dollars.

Yeah Altaf Khanani had clients in Australia that again,

yeah would range from outlaw motor cycle gangs

ah to people identified as being linked to extremists,

so he you know in Australia was like all over the world,

he didn't care where the money came from who it was for or why

they needed it cleaned, he was more than willing to do that.

(music)

The extent of Altaf Khanani's operations

in Australia were becoming clear in

2013 when a courier for the Mexican Sinaloa

drug cartel flew into the country.

In October 2013, through looking at the work of Khanani

we identified a Mexican by the name of Onix Mendoza

who had been sent over by one of the Mexican cartels

to move the money on their behalf for moving ice.

He came to collect drug gang profits and

wash them through Khanani's network.

They were then using a Vietnamese group to go around

and launder that money, and pick up the money.

An AFP operation followed Onix Mendoza to

a quiet street in Ringwood, Melbourne.

Police watched as he met an Indian man who

was working for the Altaf Khanani network.

Onix Mendoza handed him a suitcase

from the boot of his car.

And when the Indian man was arrested police found

it contained half a million dollars in cash.

Khanani's network ah was,

it was kind of compartmentalised in a manner that

you know not everybody knew everybody so

one person would be used as a cut-out

who would deal directly with Altaf Khanani

and then that person would reach out to someone

in whatever country the money was that needed to

be moved and that individual didn't

know who Altaf Khanani was directly,

allowing him to do these business

transactions and remain anonymous.

(music)

A week later police watched as Onix Mendoza met

an Italian man in the middle of Melbourne's CBD.

The man had flown into Melbourne only 48 hours earlier.

They used the signature method to recognise each other.

They used the serial numbers on an Australian five

dollar note, and those serial numbers would be their

introduction point to actually confirm that that

transaction is legitimate between those two parties.

(music)

The AFP swooped again, arresting Onix Mendoza and the Italian.

Along with another $500,000 they also found

incriminating text messages on the Italian man's phone.

A day later he replied, denying he was stealing the money.

He said he was...

This is an interesting case because by following the money

and working through the Khanani network we identified

Italian organised crime out of the US, Indian money

launderers, Vietnamese individuals, and Mexicans.

Altaf Khanani was a very bad guy and

he dealt with some very bad people

who did a lotta harm in this world um so he a-a again,

he had contacts in ah Lebanon ah Iran,

South America, Central America, Australia

and these were not your typical businessmen, these were people

involved in all sorts of things, weapons trafficking, drug

trafficking, terrorism finance and so these were, these were

the things that concerned us the most about this guy.

Richard Grant and the Australians

also persuaded the UK, Canada and

New Zealand to assist in the operation

to bring down Altaf Khanani.

It was the first time the Five Eyes intelligence network

was mobilised against an organised crime target.

Khanani had been identified as a

significant risk by a number of different

organisations, and they'd done

their best to try and take him on.

It was only when we moved forward with the work that we

did with the Five Eyes that we started to get the whole,

five countries all working together that you leverage off

each other and it takes a network to defeat a network.

We'd been talking with the Australians,

we'd got some new intelligence...

The operation itself would be run by the DEA in Miami.

This is the business in Dubai that Altaf

Khanani is operating out of, it's Al Zarooni exchange.

The plan was for an elaborate sting, using covert operatives.

We have the undercovers being briefed to

make contact with Altaf Khanani directly.

The plan was to infiltrate a DEA undercover agent

into the Khanani organisation, to establish

ourselves as the highest traffickers or money

launderers that we can appear to be to Altaf Khanani.

It was then to develop the evidence that we would

then be able to indict him in the United States.

We were posing as drug traffickers

and we had money to be laundered

and we solicited Altaf Khanani to launder our money for us

and you know greed is a powerful tool and any time someone can

make money in this world they'll jump at the chance.

Alright, let's give these guys a

call and I'll show you real quick.

Undercover agents across the world

were organised to set up a fictitious

drug syndicate which would contract

Khanani to launder its cash.

What time is it over there did you say?

It's like 7am. -7am.

It was Australia's ability to infiltrate Khanani's

network which was critical to the plan.

I had no scepticism that the Aussies would be able to

deliver it because they showed us right off the bat,

from the start of the

investigation, that they had a way

to ah penetrate the organisation and um working with

us and our resources um we knew from day one that, at

least to my mind, that this was going to be successful.

To look like real drug traffickers, they

needed a substantial amount of cash to launder

into Khanani's network and that's where the

Australian taxpayer came into the picture.

Two federal law enforcement agencies put up the money.

This was one of the more

interesting parts of the strategy

is then going back to our CEO and pitching to him

that we needed a quarter of a million dollars,

and we were going to give it to

somebody that we really didn't know,

with the hope and the promise that he would

deliver that money into another country.

So, most police forces would baulk at the fact that you'll

lose $250,000 because that's the risk that we were taking.

Have to say that our CEO had the view that we needed

to be lawfully audacious and that's what we did.

So, we found $250,000 in the budget

and fortunately at the time that

we were doing that the Australian

Federal Police had come onboard.

The AFP kicked in another $1 million.

The million dollars that was provided

by way of the Australian Federal Police

was actually utilised to launder those

funds in that reverse transaction piece

to identify how the system worked,

and the threshold for the indictment to be realised

in the US under their legislation required

that up to a million dollars would be laundered

before you could secure that indictment.

So when we get the money from the Australians

to go ahead and start the operation

ah it was very, it was a little

nerve-wracking ah I don't even keep my own

cheque book, I let my wife do that so

now I've got another government's money

ah to use in an operation so it was

a bit nerve-wracking but...

the plan that we had in place was solid,

we were confident it would work.

(tense music)

It was vital for a successful prosecution that the

undercover agents made contact with Altaf Khanani directly.

Trust is everything, so we began conversations

um we provided opportunities ah to for Khanani to make money

and then when it came time where the rubber

met the road, we actually followed through

and we gave him what he needed to

make ah the transaction successful,

so we gave him the money, we gave him the accounts,

we told him, we told him who we were,

we told him we were drug traffickers.

An undercover agent in Australia called him personally.

and gained Khanani's trust.

The team prepared to hand over the first bundle of money.

The first cash drop was critical.

The DEA put $100,000 in unmarked bills into a

bag and gave it to their undercover agent.

He was meant to meet Khanani's man in a car park in New Jersey.

(music)

It was at a Dunkin' Donuts up in New Jersey area.

They met in the parking lot and um our

undercover meets 'em they confirm that

the token or the dollar bill is the serial

number's correct and the exchange occurs.

So that was that was the first, that was the first job.

Khanani had promised to wire back

the money minus his commission

via a seemingly legitimate business in the Middle East.

Now the detectives would have to wait

to see if they really had fooled him.

Did I think it was going to go,

yes 'cause I was confident in the

undercover, I was confident in the case agents and the group.

However, there's a level of

anxiety when you're managing it all

ah that it's got to go and there was a lot

of sleepless nights ah over a few months.

Waiting for the money to return was the worst part.

It was the first time we've done this sort of covert operation.

You've got a number of things going through your

mind, not the least of which is losing your $100,000.

What's happening?

After a tense five days Rob Cassitta phoned

Richard Grant to give him the good news.

Khanani had wired back the Australian money.

The first one's always special, and

ah the I think I sent him a text or

a photo of ah the money and I could

feel the sigh of relief down under.

I got the phone call to say the money's gone through.

So thankfully my backside was no longer in that sling.

But the money had gone through and the job

was a success, so we knew we were on a roll.

With the first batch of money through the cash

drops continued in Houston, Atlanta and New York.

It happened so quickly and it was working

um as we moved from city to city

that I know there was the moments where I was

with the guys John and the other guys in

the office and it was holy shit, this is

working, we can do this as long as we want to.

It was kind of amazing to see

how we can throw out a state or ah an

area where we needed money picked up

and Khanani was able to reach into his Rolodex

and dial up somebody to ah help us with that.

Hello? Do you hear me?

In one recorded conversation Altaf

Khanani revealed he was worried.

Here is too much.

You know everywhere is too much problem

for changing, now we have to do

very, very, very carefully, changing,

because sometimes they ask questions.

At one point the operation appeared to stall.

There was a moment where we were waiting I think up to

twelve days for money to come back and the undercover

um who ah brilliantly ah on his feet

um rather than threaten violence to

Khanani which we wouldn't do um utilised

the threat of violence against him.

The undercover when he talks to Khanani tells him hey,

listen, if you don't give me this money back soon,

the cartel's gonna cut my head off and use it as a soccer ball.

And I think that got Khanani's attention that um

oh okay I you know I need to move faster ah with this.

The detectives needed visual

confirmation it was Altaf Khanani.

At the time what we had was a number of

conversations between the undercover

operative and Khanani which were all

recorded and they're very damning.

But at the time we actually

couldn't put a face to the voice.

We had no physical meetings with Altaf Khanani so to get the

identification confirmed ah it was

decided to do a Skype video call um

and that, that's kinda what put us

over the top with the identification.

In the Skype call, the undercover who was in

Australia invited Khanani to come and visit.

The agent told Khanani he was calling

about a new business opportunity ...

He said his new contact needed to

move more money more quickly ....

Khanani had no idea that the noose was tightening.

We had pictures of Khanani, we knew what he looked like,

we'd been talking to him on the phone but

to actually get a picture of his face

and him communicating to us

and the undercover did a fantastic

job in when that call was made,

he basically rehashed all the

transactions we had done up to that point

and Khanani confirmed every one of 'em so, it was a

great job by the undercover and phenomenal evidence.

What's going through my head is I still

go back to him being some super villain

and looking at that video and he's

sitting you know in the frame

and just controlling you know like a money empire

um I thought it was quite impressive

that this guy had all that going on

and um he's been doing it for that

long he's good and then it felt more

like, we got you, and ah I knew his

time was ah soon coming to an end.

(music)

After 36 days the operation reached a critical point.

The undercover told Khanani he needed money picked

up in Texas and Khanani, as always, made it happen.

This was where they had another cash drop.

And it's where they hit the magic number:

$1 million US dollars laundered through the Khanani network.

If he moved over a million dollars US,

then the penalties were significantly higher

and we wanted to move over a million dollars, because

that would reflect the level of criminality that he was

exhibiting and the impact he was having on the countries.

All the stuff pertaining to the undercover

drops is gonna be in this file.

All the banking records are in that one.

Rob Cassitta and John Clayton were closing in on one

of the world's biggest money-laundering bosses.

The US and Australian detectives had successfully

laundered more than a million Australian dollars

through Khanani's network, now they needed to find a country

where he could be arrested and extradited to the United States.

Once we went to the lure and capture phase we had to find

a place that ah Khanani would be comfortable travelling to.

We're developing the plan like how are we gonna do

this, how are we gonna how are we gonna catch this guy

and so we basically drilled down to

Panama, was a good country for us,

we do a lotta work down there and they

were they were interested in helping us.

(music)

They needed to come up with a way to persuade

Altaf Khanani to get on a plane and leave Dubai.

The undercover started building a story about his travel

and down south of central America and um that we had,

we had more business as drug

traffickers, we had more business um

that was happening there in South America and

that if Khanani could come there and meet some

the cartel members is what we would say, then

we would be able to give him more business.

The final sweetener was the offer of a Panamanian passport.

So, I think that was a too big of a carrot for him to refuse.

When he booked his travel to Panama,

he sent the undercover his itinerary

which was a big relief and kinda gave us

an idea hey this guy's really coming.

(music)

The operation was about to reach its climax.

From an unmarked hangar at Fort Lauderdale Airport in Florida,

DEA special agent John Clayton got ready

to fly to Panama to confront Khanani.

Once Khanani was airborne en-route to Panama

and we were notified um I think that was ah a big moment

where we ah just knew, slight of a fate of God, he was going to

land in Panama and um we were going

to end this case at that point.

(music and plane engine noise)

Khanani flew in expecting to meet the

heads of a major South American cartel.

He was in for a shock.

The DEA plane on the tarmac ah surrounded by armed guard's

there's police, police cars everywhere

and um so we're brought into the detention or holding area

and Altaf Khanani's brought out of his cell

and and then he has to sign some paperwork and then he's

turned over along with all his

property, he's turned over to us.

He was kind of in shock 'cause he you

know he was expecting the big trip and

to meet all these big players and so he

had no idea that this was happening.

What's going through your head?

I can't believe this is really happening,

this is ah this is a pretty amazing moment

um very happy that the case has come to

a culmination and we've got this guy.

Well the iconic photo for me in all this ah in this whole

investigation was ah John Clayton

putting the handcuffs on Khanani.

To me that just summed up everything.

It's everything we promised, everything we said we were

going to do, we delivered, and I think we delivered

in less than a year's time, which to get a guy like

Khanani is yeah, I think it's pretty remarkable.

I immediately forwarded it to the Aussie

counterparts and ah said it's done, basically.

I remember, I think I'd gone home at that stage,

and I had my phone and then suddenly the phone binged,

and I looked down there and there was a text with a

photograph of Khanani

surrounded by DEA agents in cuffs.

It was a wonderful thing.

(music)

Altaf Khanani was frog marched to this very plane, a specialist

DEA aircraft used for operations across central America.

After decades in the wild financing the world's criminal

kingpins Altaf Khanani realised it was finally all over.

He was going to jail.

(music)

Khanani was flown out of Panama and back to Florida.

As the wheels lift up and when the plane takes

off you can tell he's he's starting to think

about like what is, what is really going on

and so then he starts asking us questions.

Like ah you know well what, what is it

I can do to get out of this situation,

well unfortunately for him there was no way to get out of this

situation, this was the end of the line for Altaf Khanani.

(music)

At the DEA headquarters he was

finger-printed and put in this cell.

It was an immense sense of pride in the people that had

worked on this particular matter for such a long time

then collaborating with international partners

to achieve this outcome was something unprecedented.

It actually disrupted a significant

organised crime threat to the country.

And that's the thing I was most proud of.

Altaf Khanani pleaded guilty.

In return for assisting authorities in March last

year he received only five-and-a-half years in jail.

With US sanctions in place against his family and

associates the Khanani network has been dismantled.

Others have emerged to take its place.

There are other networks.

For example, out of Vietnam, out of Dubai, out of Hong Kong.

The business that is lost if the Khanani network has taken

down, simply gets picked up by

another money laundering network.

I'm quite confident that Khanani was

the top of a fairly large tree.

Unfortunately, it's a forest, there's lot

of trees, and lots of people at the top.

So, the job of this agency and working with

other law enforcement partners is to really

identify those trees and identify the people

at the top of them, and take them out.

I think the biggest message that everyone

can take from this and all the drug

traffickers and money launderers in the

world is that nobody's untouchable.

(music)