Posts Tagged ‘MSB’

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Barclays severs ties with Somali wire service over terror finance, money laundering concerns

July 4, 2013

Of course, the Somali company in question is Dahabshiil—the same money transfer service that reportedly pays the terrorist group al-Shabaab $1 million a year in protection money.  It’s the same money services business that East African musicians say promotes “tribalism and extremism.”  And it’s the same company with whom, for some reason, Minnesota-based U.S. Bancorp still intends to do business.

Thank goodness Barclays has acknowledged the warning signs.  Thanks to El Grillo for sending over this Jun. 25 article from the AP:

Terror financing fears stop transfers to Somalia

By ABDI GULED and JASON STRAZIUSO

Associated Press

MOGADISHU, Somalia (AP) — When a bank transfers money to Somalia, can it be sure it’s not sending money to terrorists? That question is forcing one of Britain’s largest banks to cut ties with the largest cash transfer bank in Somalia, a company that brings in the majority of the country’s $1.2 billion in yearly remittances.

Many in Somalia are in desperate need of money. Payments from family and friends overseas are how many get by, and that’s why more than 100 aid workers and Somalia experts signed a letter this week pleading with the British government to find a solution.

Barclays bank will no longer allow customers to send money to Somalia via the Somali bank Dahabshil. A financial power-house in Somalia, Dahabshil describes itself as “the most trusted money transfer company for many immigrants willing to support their families and friends.” But anti-terror laws hold banks – like Barclays – responsible if they transfer money to criminal or terror elements. As a result, fewer are willing to send money into Somalia.

Such transactions for Somalis in the United States became more difficult in late 2011, when a bank in Minnesota closed accounts that facilitated such transfers. Sunrise Community Banks decided to halt the transactions after two women were convicted of sending money to the terrorist group al-Shabab.

“It is recognized that some money service businesses don’t have the proper checks in place to spot criminal activity and could therefore unwittingly be facilitating money laundering and terrorist financing,” Barclays said in a statement. “We want to be confident that our customers can filter out those transactions, because abuse of their services can have significant negative consequences for society and for us as their bank.”

Abdirashid Duale, chief executive of Dahabshiil, noted that his company is one of a number of transfer businesses affected by of Barclays’ decision.

“Naturally, Dahabshiil is appealing this decision and would like to emphasize that to date Barclays’ has acknowledged that our Anti-Money Laundering and Anti-Terrorist Financing policies are fully compliant with industry regulations,” he said.

Dahabshiil, he said, remains operational while it explores alternative banking arrangements.

The group of aid workers and researchers said the decision at stake here “is a lifeline that provides essential support to an estimated 40 percent of the population of Somalia.” The group said it has seen firsthand the impact remittances have on families in the Horn of Africa.

“My son is in the U.K. He sent us money every month for our sustenance and school fees for the children. Where are we going to get the money to pay our bills?” said Dahabo Afrah, a longtime customer of Dahabshil in Mogadishu. “This is unfair to us and will affect hundreds of thousands of Somali people.”

Many big banks in the U.S. have already stopped handling transfers to Somalia, saying the federal requirements designed to crack down on terrorism financing were too complex and not worth the risk. Last April, U.S. Bank confirmed it is working with Dahabshil to allow Somalis in Minnesota to send money back home. U.S. Bank spokeswoman Teri Charest said Monday that the bank is working closely with Dahabshil but the transactions have not yet started.

Barclays said it remains happy to maintain a relationship with businesses that have anti-financial crime controls…

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Terror bankrollers bombed for stiffing al-Shabaab

April 24, 2013

The Somali-based Dahabshiil money transfer company normally pays the terrorist group al-Shabaab half a million dollars annually, according to a new report from the Dutch-Somali Suna Times.  This year, however, due to sagging business, Dahabshiil could only afford to offer al-Shabaab $100,000.  Al-Shabaab threatened to attack the financial institution if payment wasn’t made in full, and followed through on the threat by bombing Dahabshiil’s offices in Mogadishu on April 2.

This version of events differs from the explanation by the bank and Reuters that the Dahabshiil was being threatened by al-Shabaab for working with international aid agencies.

On its website, the Suna Times displays documents showing money transfers to the current emir of al-Shabaab.  The documents came from whistle-blowers at a separate website called WaagaCusub.  These reports may reinforce the claims of two East African musicians who say they have received death threats for singing about Dahabshiil’s role in financing terrorism (accusations which legal counsel for Dahabshiil has previously contacted Money Jihad to deny).

Meanwhile, Minneapolis-based U.S. Bancorp is finalizing a partnership with Dahabshiil to expand remittance options for Somali immigrants in the U.S. to wire money to Somalia.  Continuing to pursue such an agreement in light of the Shabaab-funding revelation would be a ghastly decision that U.S. Bancorp would have to explain to its customers and federal financial regulators.  It would also put U.S. Bancorp at odds with all other Minnesota financial institutions which have ceased Somali remittance programs due to the risk of financing terrorism.

Somalia:  Secret Dahabshiil documents of Al-Shabaab Finance

Monday, April, 15 2013

The documents include the bank accounts of al-Shabab leader Ibrahim Jama Mead (Ibrahim al-Afghani) and former Emir Ahmed Godane as well as Muktar Robow and Hassan Dahir Aweys.

MOGADISHU (Sunatimes)- Whistleblowing website WaagaCusub (New Dawn in Somali) has published hundreds of Dahabshiil financial and secret documents dating as far back as 2004.

The website, founded by Somali investigative journalist, Dahir Alasow, has promised to release more damning documents in the near future.

The new records were released just few hours after Paris-based Africa Intelligence said the largest money transfer company in Somalia was struggling to stay in business. As well as trying to cover its links to al Qaeda affiliated al-Shabab, the bank was recently forced to close most of its branches in central and southern Somalia due to lack of funds and security threats.

The paper said following the 2nd April explosion outside its Mogadishu headquarters in the Bakara market, the funds transfer company closed more than 10 branches in Hiraan, Bay and Bakool regions.

Furthermore, the Indigo Publications owned paper said Western intelligence were carefully monitoring the financial activities of the bank.

Al Shabab has threatened to bomb Dahabshiil after the bank refused to pay its annual $500,000 support to the terror group due to Western pressure. The Hargeisa-based bank instead offered to secretly channel them $100,000, which al Shabab rejected.

Now WaagaCusub says it has sufficient proof and documents supporting Dahabshiil’s financial links to the outlawed group.

The documents include the bank accounts of al-Shabab leader Ibrahim Jama Mead (Ibrahim al-Afghani) and former Emir Ahmed Godane as well as Muktar Robow and Hassan Dahir Aweys.

The files show that between 23 September 2010 and 11 of January 2013, the current Emir al-Afghani received USD$4,326,727.50 through his account in Dahabshiil.

Similarly, Ahmed Abdi Aw-Mohamud (Ahmed Godane aka Abu Zubeir) received over USD$4, 415, 411 from 31 September 2004 to 3 January 2013 of this year.

The website has said it will release more cables on the financial history and activities of the payment firm.

Meanwhile, investors and remittance receivers have been rushing to Dahabshiil branches to withdraw their funds since the April explosion. Many said they fear for their own safety security scare while others are worried that Western governments might close down the bank.

Dahabshiil has been trying to silence the Somali media for many years in an effort to conceal its financial activities and materials. It has on several occasions taken Dahir Alasow to criminal courts while threatening many with lawsuits.

In July 2012 it made international headlines when Anonymous hacked into their databases publishing thousands of account numbers, names and details online thousands of account numbers, names and details online.

The hack activist group accused Dahabshiil of aiding Somalia’s al Shabab.

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Somali conspirators found guilty as charged

March 6, 2013

San Diego imam and three cohorts laundered money, financed terror

http://bloximages.chicago2.vip.townnews.com/indianapolisrecorder.com/content/tncms/assets/v3/editorial/d/5d/d5d091ae-7f65-11e2-a3e7-0019bb2963f4/512b8cf9a77f9.preview-300.jpg

Two of the four financiers: Imam Mohamed Mohamud (left) and Issa Doreh (right)

Many readers are probably already aware of the conviction as it has received fairly extensive print news coverage.  The best report on the Feb. 22 verdicts comes from the FBI itself:

San Diego Jury Convicts Four Somali Immigrants of Providing Support to Foreign Terrorists

Defendants Sent Money to al Shabaab in Somalia

SAN DIEGO, CA—A federal jury today convicted four Somali immigrants, including a popular imam at a City Heights mosque, of conspiring to provide material support to the terrorist group al Shabaab.

The jury found that the four men—Basaaly Saeed Moalin, a cabdriver in San Diego; Issa Doreh, a worker at a money transmitting business that was the conduit for moving the funds; Mohamed Mohamed Mohamud, the imam at a mosque frequented by the city’s immigrant Somali community; and Ahmed Nasiri Taalil Mohamud, a cabdriver from Anaheim—conspired to raise money for the foreign terrorist organization and send it back to Somalia.

During the three-week trial, the United States presented evidence that Moalin, Mohamud, Doreh, and Nasir conspired to provide money to al Shabaab, a violent and brutal militia group in Somalia that engages in suicide bombings, targets civilians for assassination, and uses improvised explosive devices. In February 2008, the U.S. Department of State formally designated al Shabaab as a foreign terrorist organization.

At trial, the jury listened to dozens of the defendants’ intercepted telephone conversations, including many conversations between defendant Moalin and Aden Hashi Ayrow, one of al Shabaab’s most prominent leaders who was subsequently killed in a missile strike on May 1, 2008. In those calls, Ayrow implored Moalin to send money to al Shabaab, telling Moalin that it was “time to finance the Jihad.” Ayrow told Moalin, “You are running late with the stuff. Send some and something will happen.” In the calls played for the jury, Ayrow repeatedly asked Moalin to reach out to defendant Mohamud—the imam—to obtain funds for al Shabaab.

According to the evidence presented at trial, the defendants conspired to transfer the funds from San Diego to Somalia through the Shidaal Express, a now-defunct money transmitting business in San Diego.

The United States also presented a recorded telephone conversation in which defendant Moalin gave the terrorists in Somalia permission to use his house in Mogadishu, Somalia, telling Ayrow that “after you bury your stuff deep in the ground, you would, then, plant the trees on top.” Prosecutors argued at trial that Moalin was offering a place to hide weapons…

Basaaly Moalin, the most malicious and vocal of member of the conspiracy, could be sentenced to a maximum of 80 years in prison, with his co-defendants facing shorter terms.

The disturbing (but frankly unsurprising) involvement of an imam in the conspiracy is not the only important takeaway from this trial.

The critical lesson illustrated by this case is that remittances to Somalia are fraught with risk; ordinary Somali customers undoubtedly used the services of Shidaal Express prior to its closure.  Even customers who had no intention of funding terrorism supplemented Shidaal’s business and indirectly aided al-Shabaab.

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Shidaal Express in San Diego

This is why banks have to make very careful decisions about money services businesses (MSBs) that they may take on as commercial clients.  Banks must evaluate whether the risk of supporting terrorism is too high to continue doing business with a particular individual or MSB.

Why on earth would anybody still criticize banks in Minnesota for ceasing to providing money transfer services to Somalia?  The evidence has become far too clear that Somali remittances bear an unacceptable risk of being siphoned off for terrorist purposes.

IPT has previously reported on the details of the money transfers in the San Diego conspiracy, which further illustrate the fundamental riskiness of the Somali remittance business:

The men used hawalas—both registered and unregistered—to move money from the United States to African countries. Two of the hawalas identified—Shidaal Express, Inc.,and North American Money Transfer, Inc.—have a history of money laundering and terror-financing violations, public records show.

Take, for example, North American Money Transfer (NAMT) which is incorporated in Georgia, but has branches in Missouri and elsewhere throughout the United States. In August 2009, the Justice Department charged the company with a series of financial crimes, including operating as an unlicensed money transmitting business in the State of Michigan. According to the indictment, between Jan. 3, 2008 and April 15, 2009, “NAMT wire transferred approximately $12,820,000 from the United States to Africa Horn in the United Arab Emirates, for distribution to the intended recipients in Somalia and other countries located in the Horn of Africa.”

Over a period of 10 months, the defendants in the cases announced Wednesday raised and transferred approximately $26,000 from various locations within the United States to Somalia. Separating the payments into 20 separate transactions, each of them were structured to evade the $3,000 limit that would have required the hawala to verify a name and address of the sender through a photo identification.

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Bank offers $2-3m bounties on singers’ heads

February 22, 2013

UAE-based money transfer business accused of plotting contract killing of two East African musicians

The Dahabshiil money transfer company is promising a $3 million reward for the murder of Djibouti singer Nimo Djama after singing about Dahabshiil’s role in financing terrorism.  This allegation by Djama herself was nearly impossible to find in English-language print media (or even by the blogosphere) when the story began circulating among Somali sources last fall.

One outlet that did report on it was the Somali-Dutch news site, the Suna Times, excerpted below with some light editing for readability:

Dahabshiil—Facts, Violations, and Terrorism

The Djiboutian singer Nimo Djama accused Dahabshiil company of putting a three million dollar bounty for her death.

“Dahabshiil Bank, Ottawa branch has been assigned to assassinate me. They have received three million dollars to carry out the assassination. Dahabshil or Dhiigshiil wants to kill me. I’ve informed the Canadian law enforcement agencies. They installed cameras in my home,” said Nimo Djama in an audio interview on Oct 13, 2012.

Nimo Djama, aka the Mother of Djiboutian Singers, is a popular figure, and was part of the independence struggle in her country, but fled from Djibouti after being arrested by the administration of president Guelleh.

The well-known Somali singer Sado Ali Warsame who overthrown [sic] said Barre regime with her songs also accused Dahabshiil of putting a two million dollar bounty for her death, shortly after she released a song called Dahabshiil ha dhigan (“Don’t Deposit with Dahabshiil”).

Concern over Dahabshiil’s threat, which lost around 70% of its customers, resulted [in] reinforcement of Sado’s security…

A written description accompanying a video published on YouTube on Feb. 11 reveals further details about the hit ordered against Ms. Warsame (whose name may also be written as Saado Cali Warsame):

A Somali super star singer sings against Dahabshiil money transfer

A top Somali super star Sado Ali Warsame, had released an album against the Dahabshiil money transfer which she warns the people to send their money to the company because of what the singer called ‘a linkage to tribalism and extremism’.

The nationalist icon of Somalia top ten super stars, Sado Ali Warsame, who is well respected for her role in fighting against the military dictatorship through her cultural-rich music, is now taking the platform to challenge against all the actors against the pan-Somalia.

Her new song “Ha dhigan Dhiigshiil” which means don’t send your money through Dahabshiil, is a great challenge to the company which currently lost a court case against a well-known investigative journalist Dahir Abdulle Alasow in Breda Netherlands after the company accused the reporter of humiliating figures in the company, goodwill defamation and accusation related to Dahabshiil’s attempt to assassinate singer Sado Warsame.

The song relates Dahabshiil to Alshabab [al-Shabaab], a militant group allied to Alqaeda [Al Qaeda] which rules much of Southern Somalia with brutal laws, and a slow genocide going on in the Sool, Sanag and Ceyn (SSC) regions in Somalia by Somaliland forces, which Warsame is originally from.

Dahabshiil rejected the accusation and sued the investigative reporter whose website waagacusub.com published the articles relating Dahabshiil attempt to assassinate the artist Warsame and the linkage to the terror group and the slow genocide in SSC regions.

But the judge in Breda district court ruled out Dahabshiil’s argument and ordered the reporter to keep doing his job freely, and states the accusation as baseless.

The company’s name Dahabshiil means Goldsmith, while the singer calls it in the song as Dhiigshiil, which means Bloodsmith, a previous name of the company in early 2000s, which the company owners refute to be called now for their business goodwill.

The song had attracted a big number of listeners who clicked more than 30,000 times on one link in waagacusub website and the controversial comments on the songs divided the public opinion.

A comment with anonymous person says, “The song is true, Dahabshiil feeds Alshabab, and I agree that we don’t need to send our money to it”…

It’s not just an anonymous person on Youtube, or even an enterprising Somali-Dutch reporter.  A presiding judge at a 2005 hearing in Guantanamo Bay told detainee Mohammed Sulaymon Barre, “I am convinced that your branch of the Dahabshiil company was used to transfer money for terrorism.”

Now, we leave you with a music video by Warsame.  She sings about peace, national unity, satirizes the terrorists, and tells the truth about the financing of extremists.  For this she gets death threats from Dubai?

UPDATE—FEB. 28, 2013:

Money Jihad has again (see comment below) been contacted by legal counsel for Dahabshiil, who makes the following response to this post:

Dahabshiil refutes the allegations made about it in this article in the strongest possible terms. The allegations are absurd and entirely false. For the avoidance of doubt, Dahabshiil has no involvement whatsoever in violence or terrorism of any kind.Dahabshiil considers these allegations to be highly defamatory and has accordingly commenced legal proceedings in The Netherlands to restrain further publication of them by their original author [of the Suna Times].

By way of background, Dahabshiil is a major international financial organisation, founded in 1970. Dahabshiil operates in approximately 150 countries across the world (including the USA and most European territories) with over 5,000 employees. Dahabshiil has a large and loyal customer base and a number of major international organisations rely on Dahabshiil to provide payment services for their staff, contractors, government institutions and partner NGOs. Dahabshiil has its headquarters in the United Kingdom where it is regulated by the Financial Services Authority.

For further general information about Dahabshiil , please visit Dahabshiil’s website at www.Dahabshiil.com

For media enquiries, please e-mail news@dahabshiil.com

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10 years after 9/11, Treasury looks at hawala

June 17, 2011

The failed Times Square bombing has prompted FinCEN to consider tightening the screws on hawala.  The shocking thing about this article from MoneyLaundering.com on June 14 is that it has taken so long for FinCEN to become concerned about hawala.  The 9/11 Commission found that hawala played a significant role in Al Qaeda’s financing, particular after the East Africa embassy bombings, but also including 9/11 itself.  We also already knew that Italian hawaladars played a role in financing the 26/11 terror attacks against Mumbai.

The sad thing is that, even though FinCEN has become more worried, the only apparent “solution” offered in this article is closer cooperation with law enforcement.  Here’s a suggestion:  outlaw hawala in the U.S., and as soon as any hawala operator is discovered, get a warrant, seize his records, cuff him, jail him, put him on trial, and bulldoze his office after his conviction.

Failed Bombing Prompted Treasury to Scrutinize Unregistered MSBs, Hawala Networks: Sources

By Brian Monroe

Last year’s failed Times Square car bombing has been the chief impetus behind a recent U.S. Treasury Department’s initiative to identify unregistered money services businesses and hawala networks, according to sources.

The department’s Financial Crimes Enforcement Network (FinCEN) began more closely screening the suspicious activity reports (SARs) it receives after it was disclosed that Pakistan-born Faisal Shahzad, who attempted in May 2010 to blow up an explosive-packed Nissan in the heart of Manhattan, had received funding for the operation through hawala brokers, said an individual familiar with the matter.

After the disclosure, the bureau began more closely working with regional law enforcement officials and regulators to determine how to better identify similar brokers, known as hawaladars, said the person, who asked not to be named. In May, FinCEN asked money services businesses (MSBs) to report the names and tax identification numbers of their agents, among other data.

After the attempted bombing, FinCEN officials were “very worried” because, along with the Internal Revenue Service, the bureau is responsible for oversight and enforcement of MSBs, said the person. FinCEN officials wanted to find a way to thwart transfers similar to those received by Shahzad, who accepted $12,000 in funding via a hawaladar from co-conspirators in Pakistan.

Following Shahzad’s arrest, there is a “greater realization in law enforcement that these hawalas can be tied to some pretty serious stuff,” including terrorist financing, said Martin Ficke, a former U.S. Immigration and Customs Enforcement special agent. “These agencies have to do something to close that gap.”

The number of hawala brokers in the country remains a guess at best. While FinCEN lists more than 42,000 registered MSBs on its Web site, the number of unregistered MSBs, including hawala operations, is close to 160,000, according to a 1997 estimate by a third-party consultant commissioned by FinCEN…

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Poor follow-through by FinCEN?

September 19, 2010

Over the past five years, the anti-money laundering staff of the IRS has referred 60 significant money laundering cases to FinCEN which has resulted in only four fines by FinCEN.  This embarrassing revelation comes from an Aug. 31 article by MoneyLaundering.com:

IRS AML Exam Violation Letters, Referrals Lead to Few FinCEN MSB Penalties

By Brian Monroe

The division of investigatory and enforcement powers between two U.S. Treasury Department agencies has resulted in few monetary penalties for anti-money laundering compliance lapses by money services businesses and tension between the two agencies, say current and former government officials.

While the IRS’s anti-money laundering (AML) examination division issued more than 10,000 letters to money services businesses (MSBs) and referred more than 60 cases of “significant noncompliance” to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) over the past five years, only four have resulted in monetary penalties, according to government data.

It’s a system that undermines AML compliance, said Dave Tilzer, the former head of the New York IRS AML division. MSBs that deserve monetary penalties, including those who have shirked off several warning letters, are not being penalized, he said.

“We are the biggest paper tiger,” Tilzer said of the IRS’s AML examiners. The New York IRS division referred several cases to FinCEN the group believed were deserving of monetary penalties, “but the referrals didn’t go anywhere,” he said…

Some officials have argued that there were few penalties because the MSBs corrected their noncompliant behavior before the case progressed any further.  Nevertheless, one wonders why FinCEN can’t fine an MSB for prior noncompliant activity while acknowledging that it has taken the steps to correct it going forward.

It doesn’t look like MoneyLaundering.com could get a quote for this story from FinCEN Director James H. Freis, Jr. or Deputy Director Charles M. Steele, but I’d love to hear their reaction.

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FinCEN adds Somali language to its brochures

September 17, 2010

Gee, wonder why?  From FinCEN’s press office on July 28:

VIENNA, Va. – FinCEN today announced the availability of Somali language brochures to facilitate money services businesses’ (MSBs) ability to more easily comply with the requirements of the Bank Secrecy Act (BSA). The materials made available today cover BSA compliance obligations, currency transaction reporting, and suspicious activity reporting.

The Somali language brochures are in addition to outreach materials for MSBs that are already available in English and the following seven foreign languages: Spanish, Chinese, Vietnamese, Korean, Arabic, Farsi, and Russian. These new materials are intended to enhance FinCEN’s outreach efforts to communities with significant numbers of MSBs…

Just for “outreach.”  Couldn’t possibly have anything to do with illegal money transfers from Somalis in Minneapolis to the old country to support jihad in Somalia, right?  See here, here, and here.

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Weekly word: structuring

September 8, 2010

Paul Freeman, an anti-money laundering investigator and educator, defines structuring as “the act of altering a financial transaction to avoid a reporting requirement.”

Criminals in the U.S. know that money services businesses are required to report transactions under the Bank Secrecy Act (BSA) if those transactions occur in a specific manner above a specific amount of money.  So they structure their transactions to fall just under the amount that would trigger a filing.

FinCEN created a 15 minute video about the BSA.  The middle five minutes are especially useful for the examples they include about structuring:

If an MSB suspects that a customer is engaging in structuring, they need to file a Suspicious Activity Report (SAR).  But when you have hawaladars who are in bed with their customers to avoid all reporting requirements, there’s only so much FinCEN can do…

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