Question:
A person earned big amount of money out of Riba buisneess. can he give charity and to the mosque fund out of that money? If he want to start a halal buisness out of that haram money can he do that? What is the position of new earned halaal money he earned from haram money? Wassalam.
Fatwa:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His Slave and Messenger.
The money that is obtained from Riba (interest and/or usury) is ill-gotten money and it should not be given in charity because Allah is pure and He only accepts that which is pure. Rather, one should get rid of this money by spending it on the general interest of Muslims. Therefore, that man may give this money to the mosque fund which you mentioned in the question so that it can be spent for the benefit of the mosque or that it will be spent on the poor and destitute people.
It is not permissible for whoever gained ill-gotten money to spend it on himself or to invest it even in a lawful business.
As regards the ruling of lawful money that one earns from ill-gotten money (taken unjustly from someone else), then the preponderant opinion of the scholars is that he deserves half of the profit and he should give the other half to the owner of the money which is taken from him unjustly.
Moreover, if he gained this ill-gotten money from Riba or else and then he invested it and made profits from it, then it is an obligation on him to spend half of this profit along with the capital money on the general interests of the Muslims, like building hospitals, schools and on other fields where ill-gotten money should be spent.
Allah Knows best.
Fatwa answered by: The Fatwa Center at Islamweb