A US House Committee on Financial Services inquiry will this week focus on the multi-billion dollar dispute between al Gosaibi business family of Saudi Arabia or their former associate, Maan al Sanea, the head of the Saudi conglomerate the Saad Group as part of an investigation of money laundering by Middle Eastern and US financial institutions.
In a hearing scheduled for September 28, the committee will hear evidence from witnesses concerning the movement of US$1 trillion of funds between Middle East financial institutions and US banks over a six-year period ending last year. That evidence is not expected to involve links to finance of terrorism or illegal activity such as drugs or human trafficking, but will include transactions of Al Gosaibi and Al Sanea. The dispute between the two Saudi groups erupted when institutions of both entities defaulted on payments amid accusations of forgery, fraud and theft.
One focus of the inquiry will be to what degree institutions like Bank of America complied with the obligation for “red flag” notifications of transactions requiring a suspicious activity report (SAR) by banks or regulators. The witnesses appearing before the committee include regulators, officials, financiers and New York lawyer Eric Lawyers wto represents the al Gosaibi family. Al Sanea’s spokesman declined to comment on the House hearing, but reiterated denials that the group had been involved.
The hearing could revive US legal interest in the dispute between the Saudi groups. A New York and Cayman Islands court ruled in July that the dispute should be settled by Saudi authorities rather than in a foreign jurisdiction.
A Saudi committee that includes business, financial and political and political leaders has been looking into the dispute for the past year, but has yet to propose a solution. Global creditors are trying to recover $20 billion owed by the two groups as a result of the defaults.