Iraqi investigators say most of stolen $2.5 billion has been recovered

Senior judge in 'theft of the century' case says court has seized cash and property from fraud suspects and their families

Protesters mark the third anniversary of the anti-government protests in central Basra, Iraq. AP

Iraq's judiciary claims to have traced and seized “most” of the $2.5 billion embezzled from government funds in the latest corruption case that has shocked the country and drawn UN condemnation.

The announcement of the recovered funds was made by a senior judge in charge of the investigation on Tuesday.

The latest scandal, revealed earlier this month by a government minister, has caused a political storm in corruption-plagued Iraq and is being dubbed domestically as “the theft of the century”.

In the embezzlement, an amount of 3.7 trillion Iraqi dinars (almost $2.5 billion) was fraudulently paid to five companies by the General Commission of Taxes, an office within the Ministry of Finance.

The money was paid through 247 cheques between September 9, 2021, and August 11, 2022, from the commission's account at the state-run Rafidain Bank.

According to the findings of an internal investigation conducted by the ministry, the companies — at least three of them established last year — submitted fake documents for their claims.

Those funds were deposited by trading companies and individuals as a guarantee to pay taxes after finishing projects commissioned by the government or importing goods. The companies and individuals can later apply to withdraw what is left from their deposits after deducting the taxes.

“The court has seized the cash and transferable and non-transferable properties of the accused, their wives and sons,” Judge Dhia Jaafar Lafta of the Baghdad-based Integrity Court told Iraqi News Agency.

“Most of the stolen money is still inside Iraq and has been seized,” Mr Lafta said. The seized assets are in the form of cash in bank accounts and properties, he said. He didn’t give a specific amount.

The court summoned senior government officials, including the director of the Financial Department and the two deputies of the accused, he said.

The tax commission’s general director and his deputy have been arrested, while the other suspects have been released on bail, he said.

Judge Lafta said another person has been arrested in the northern semi-autonomous Kurdish region but didn’t identify him.

On Monday, the Interior Ministry announced the arrest of a businessman identified as Nour Jassim, 42, the chief executive of Al Mubdioon Oil Services company.

The businessman, who was trying to flee the country from Baghdad International Airport, is one of four suspects sought by the authorities over the case. The whereabouts of the others is unknown.

The former chairman of the Parliament’s finance committee, who earlier recommended to the government to ease the long process of reclaiming stolen funds, was also summoned by the court on Tuesday, said the judge.

The investigations are ongoing and “they are expected to lead to new names”, he said. All the suspects are in the country, he said.

Corruption has been rife in Iraq since the 2003 US-led invasion that toppled Saddam Hussein. Many politicians have been arrested or removed from office for the practice.

Iraq is considered one of the most corrupt countries in the world. It ranked 157th out of 180 nations on Transparency International’s 2021 corruption index.