Iraq’s Dollar Auction: The ‘Monster’ Funneling Billions to Fraudsters and Militants Through the U.S. Federal Reserve

A system set up to channel dollars from Iraqi oil sales to importers has been exploited by money launderers and militant groups for years. An OCCRP investigation shows how the fraud works in practice.
Key Findings
- Al-Huda, an Iraqi bank whose owner was sanctioned after a drone attack on U.S. forces, allegedly exploited the dollar auction to obtain billions of dollars.
- Files from an Iraqi parliamentary investigation show how Al-Huda and two other banks used apparently fake documents to manipulate the process.
- Over 99 percent of the money obtained by one bank in a single month in 2012 was cleared based on documents that appeared fraudulent.
- The dollar auction has been used to fund U.S. adversaries including Iran-backed militias, the Islamic State, and Syria’s Assad regime, experts say.
- At least $28 million was sent to a company the U.S. says handled funds for a Revolutionary Guard member later sanctioned for financing Yemen’s Houthi rebels.