I read somewhere that there is a network for persons of Middle Eastern heritage where you can borrow, send and receive money to/from persons in other countries through individuals, avoiding traditional methods and the charges. It is strictly an honor system. Does anyone know what this network is called?

I have no idea, but it probably should be called "Illegal," as the potential of going against US law is very high.

I think you are referring to something known as a hawala. FinCEN just issued a report to Congress on informal value transfer systems, which include hawalas. Here is a link to the report.
http://www.fincen.gov/hawalarptfinal11222002.pdf

I hope this helps.

Yes , that is it! Thanks a bunch...

They are alive and well in the Dallas area. I found out about them first hand when working at a bank that services the Asian communties in the Dallas area. A young officer was trying to explain how the Pakistan community worked to me and another person who worked in the BSA area. He was just trying to help us understand that things are different and we shouldn't require all of those government documents. I'm sure I learned more than I really wanted to know in my short time there. No it's not the honor system. It's paid up front to the contact here who has a contact where ever the money is going that can pay the funds to the person or business on the other end. All I could imagine was Al Capone with accounts and contacts in many places.

Yes we did tell him it was the law.