Hawala scandal in Vienna: brothers and second wife in court!

Hawala scandal in Vienna: brothers and second wife in court!

The trial surrounding the largest hawala office in Austria began on June 6, 2025, in which a Syrian trio is accused. They ran a restaurant in Vienna-Ottakring and earned primarily through the hawala payment system, which is known for its informality and trust. The defendants, two brothers and the older brother's second wife, are suspected of being responsible for processing payments for hundreds of smuggler trips between August 2021 and March 2024. The 41-year-old defendant is considered the “boss” of the restaurant, while his younger brother and 45-year-old second wife act as his “right-hand man”.

According to information from the investigating authorities, money couriers transported several million euros in cash on a total of 21 trips in the first quarter of last year. Some of the money transported was stored in the 45-year-old's home in Vienna-Floridsdorf. Despite the seriousness of the allegations, the defendants have pleaded not guilty to smuggling. The defense attorney has emphasized that the prosecution actually wants to fight the hawala system, which further complicates the background of the case.

The hawala system: background and functionality

The Hawala system, which means “remittance” in Arabic, has existed in the Abbasid Caliphate since 750. It works on the basis of trust and mutual support without direct monetary transactions and without official government approval. A payer hands over cash to a hawaladar, who then informs another hawaladar at the destination. The recipient receives the amount of money in cash in his local currency, while there is no direct flow of funds between the Hawaladars. This process allows large sums of money to be transferred quickly and easily, which can be used for both legal and illegal purposes, including money laundering and financing terrorism.

The World Bank estimates that approximately $200 billion is transferred through hawala networks annually. Hawala is often used as an alternative method, particularly in regions where traditional banking systems are lacking. Welthungerhilfe has used this system in the past to support millions of people in crisis situations because it works faster than traditional bank transfers. This highlights the dual role hawala plays in society – as a means of support and as a potential tool for criminal activity.

Legal challenges and illegal use

The use of hawala is regulated in the EU and requires an appropriate license, making the activities of such systems illicit financial transfers. Since Hawala often works “paperless, accountless and bankless”, there is no documentation of cash flows and transfers. This makes it much more difficult to uncover criminal activity. Government authorities and organizations such as BaFin have therefore identified that hawala systems are often linked to money laundering, terrorist financing and tax evasion.

BaFin and the Federal Criminal Police Office have developed strategies to limit illegal financial transfers, but the hawala system remains a challenge due to its nature and the various networks that are active worldwide. As the Syrian trio's trial continues in court, attention is being drawn to the tension between hawala's usefulness for humanitarian purposes and its concerning use for criminal activity.

Given these developments, the presumption of innocence for the accused remains, while the legal and financial implications of their allegations and the functioning of the hawala system continue to be intensively debated.

The background and current incidents surrounding the hawala system underline the need for a differentiated view in order to find the balance between legal requirements and humanitarian needs. 5min.at reports that the processes surrounding such financial systems must not only focus on the perpetrators, but also on the mechanisms of money transfer themselves. Meanwhile lit Tagesschau.de the extensive criminal entanglements associated with their use. A deeper analysis of BaFin also shows how unregulated money transfers can pose a serious risk to national and international security.