On June 24, 2002, a man walked into Global Imports Sales in Fremont's Little Kabul district to sell some jewelry. He was no ordinary customer. Unbeknownst to the proprietor, he was an undercover government informant, wired for sound and looking to bust an international heroin-smuggling ring. He carried $50,000 worth of jewelry -- proceeds from the smack trade. The drugs had originated in Pakistan, been traded for jewelry by the ring's operatives in Thailand, and continued on for distribution in the United States, Thailand, and the United Kingdom. The informant's job was to unload the baubles for cash, then transfer the money back to the dope suppliers.
The target of the sting -- which was headed jointly by the FBI, Drug Enforcement Administration, and the US Attorney's Office -- was Qader Qudus ("coo-dis"), a 45-year-old businessman who'd immigrated to Fremont from his native Afghanistan more than twenty years ago.
Qudus is the East Bay's Afghan connection. Prior to his arrest, he ran a side business that was, for all practical purposes, the sole monetary lifeline between thousands of local Afghan and Pakistani residents and their desperately poor friends and relatives back home.
Now, based on evidence that appears tenuous, the businessman sits in a Maryland federal prison awaiting arraignment on charges related to money laundering and heroin trafficking. And whether he's guilty or innocent, the ramifications of his case extend far beyond his own family.
ZSQ Exchange, which Qudus named by combining the initials of his wife and two young sons, is a hawala, or traditional Middle Eastern money exchange. The physical business consists of little -- a few comfortable chairs, a glass-topped counter, and some computers located at the back of his jewelry shop -- but the service it provided was of the utmost importance to the people of Little Kabul and countless others around the Bay Area.
Hawala transactions are fast and simple. Customers brought their cash into the shop or deposited it directly into ZSQ's bank account. The names of the sender and recipient and the amount to be paid went on a master list the Fremont office then faxed to its partner branches in Afghanistan and Pakistan. Since hawala exchanges operate strictly on trust, the overseas partners paid recipients immediately upon receipt of the fax from America. A man in Little Kabul could plop down $100, and within hours his sister in Kabul would be $95 richer. ZSQ charged only a modest 5 percent commission and paid recipients in stable US dollars rather than the often-erratic local currencies. Qudus would complete the business transactions by wiring lump sums to his foreign partners, who earned a cut of his commission.
For the past several years, East Bay Afghans have depended almost entirely on Qudus to deliver money to their families back home. No other hawalas existed in the area, and before last month, Afghanistan had no international banks. Its economy has remained so unstable that, until its currency was relaunched in October 2002, it traded at 46,000 afghanis to the dollar, which meant the largest Afghan denomination was worth about 20 cents US. And Western Union, which charges far higher commissions, doesn't have branches there anyhow.
While many of Qudus' customers have relatives in Pakistan, international banks and Western Union outposts are bitter alternatives for the hawala's impoverished recipients: A $100 transfer from California to Pakistan through Western Union costs $13. And since the money is paid out in Pakistani rupees, unfavorable exchange rates often means the recipient walks away with well under $87. Sending bank checks raises several additional problems. The checks often take weeks to arrive and get processed, fees can be prohibitive, and a bank account -- which many of Qudus' recipients are too poor to maintain -- tends to be a prerequisite for check-cashing. Qudus' American clients also complain that Pakistani bank workers sometimes demand bribes before they'll deliver the money.
Given all this, ZSQ maintained a thriving business. With between 2,500 and 3,000 people moving mostly modest sums -- $100 here, $200 there -- Qudus' monthly transactions averaged $750,000. The figure always shot up in November, during the holy month of Ramadan, when Muslims are expected to fast and donate money they would have spent on food to others less fortunate.
It seems destined to be a rough Ramadan this year, both for the Qudus family and those on the other side of the humanitarian aid pipeline he constructed. The businessman himself will most likely spend his holidays in a jail cell, pending developments in the complicated federal legal drama that shuttered his hawala nearly two months ago.
It's a drama that began when someone walked into his store with a wire and something to sell. Or perhaps it began in late 2001, when the federal government launched the two-year, five-nation investigation that culminated with the arrest of Qudus and ten others. Or maybe even earlier, on the day al-Qaeda operatives turned passenger planes into deadly weapons and forever altered the way the US government views the efforts of the Afghan diaspora to send its money home.
Zarghuna Qudus remembers her confusion the day they took her husband away. It was 6:30 a.m. on August 29, and Qader was still asleep when federal agents knocked on the door of their Fremont home. They allowed him to dress but not shower, Zarghuna says, then led Qader away as she held their three-year-old son Zamir in her lap. Their older son Shabir, nine, was sleeping and didn't see his father go.
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