New FinCEN proposal: “more hay to the haystack”

FinCEN director Jim Freis

Juan Zarate

 

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Juan Zarate, a former counterterrorism official and U.S. Treasury assistant secretary for terrorist financing and financial crimes under George W. Bush, has come out against the Obama administration’s new sweeping proposal for banks to rat on their customers to the feds for any and all overseas money transfers.  Currently, financial institutions are required to report transactions greater than $10,000 and to file reports on any transactions that appear suspicious. 

In an interview yesterday, Zarate told NPR’s Dina Temple-Raston that the new proposal to report all foreign transactions would be increase the amount of data without isolating truly suspicious activity:

There is already evidence that anti-money laundering and CFT compliance is too invasive and costly.  James H. Freis, the Treasury official responsible for the new proposal, claims the new requirement would present only a “modest cost,” and “will greatly assist law enforcement in detecting and ferreting out transnational organized crime, multinational drug cartels, terrorist financing and international tax evasion.”

Meanwhile, cash smuggling by Muslim American charities into Karachi airport will be mostly ignored…

Islam permits robbery against infidels

It’s not just because we charge interest that makes Islamists despise our banking system.  Western banking and infidel currencies cannot be trusted because the Koran says so.  Some of us pagans can be trusted with a dinar, but most of us cannot be trust.  That is what was revealed to Muhammad in Sura 3, Verse 68:

Therefore, bank robbery, counterfeiting, bank bombings, etc. aren’t such a big deal.  The latest from Indonesia is further evidence:  from the Jakarta Post on Sept. 24:

An armed group held responsible for a bank heist in the North Sumatra capital of Medan last month has planned to rob three branch offices of state bank BRI in the province, three motor showrooms, a money changer and the house of elected Tanjung Balai regent in Riau, police say.

National Police chief Gen. Bambang Hendarso Danuri said on Friday the money collected from the planned robberies would be used to finance terror attacks in the country.

Bambang added that the group was led by Iwan alias Marwan alias Wak Geng, who has been arrested by the counterterrorism squad. Members of the gang came from radical groups in North Sumatra, Lampung, West Java, Central Java and East Java, Bambang added.

“Some of the suspected robbers are former thugs who have been recruited by the radical Islamic network and undergone indoctrination. They believe robbery is permissible if it is perpetrated against infidels,” Bambang told a press conference as quoted by kompas.com…

FBI raids Arab activist’s home, subpoenas financial records

Hatem Abudayyeh in a 2006 interview

On Friday, WLS-TV in Chicago reported that the FBI has raided the home of Hatem Abudayyeh as part of an investigation into material support of terrorism:

There was no answer Friday night at the Jefferson Park condo where Hatem Abudayyeh lives with his wife and young daughter, but he was there at dawn when the FBI came knocking.

Neighbor Sargon Tamo said that between seven and ten FBI agents came to Abudayyeh’s condo.

“It took a few hours, easily four or five hours, just taking some fingerprints, investigating,” said Tamo.

Abudayyeh is the executive director of the Arab-American Action Network, a Chicago-based community group which has been a critic of U.S. support of Israel.

In addition to being the leader of the Arab-American Action Network, Discover The Networks says that Abudayyeh is the member of another organization that sends delegates overseas to be “indoctrinated with the propaganda of pro-Palestinian militants,” that he refers to the creation of Israel “by the term Al Nakba (Arabic for ‘The Catastrophe’),” and that “In an interview with Dollars and Sense, Abudayyeh defended the Global Relief Foundation (a charity shut down by the United States for funneling money to terrorist groups) and its imprisoned co-founder Rabih Haddad.”

The Global Relief Foundation helped fund the bombing of U.S. embassies in East Africa in 1998.

The FBI also raided the home of Chicago activist Mick Kelly, and issued him a subpoena demanding “all records of any payment provided directly or indirectly to Hatem Abudayyeh.”

Another subpoena was issued to socialist Thomas Burke demanding the same types of records relating to Abudayyeh.

Targets of the raids say it’s all just government harassment of friendly peace activists.  Nothing to see here—just move along.

International aid funds Hamas-linked police

Elder of Ziyon came up with an interesting analysis last week of salaries for “security forces” (who overlap with the terrorist population) in Gaza.  Using World Bank figures as a starting point, Elder of Ziyon observed that “between $250M and $600M of PA budget seems to go to Hamas terrorists.”  Take a look.

Earlier EoZ revealed that 60 percent of the Palestinian Authority’s budget is directed into Hamas-controlled Gaza.  The PA receives its money from taxes and international aid, and Reuters reported in March that the West Bank-based PA “still pays salaries to government employees in the Gaza Strip.”

What a mess.

Connecting Faisal’s financial dots

When it comes to following the financial clues behind Faisal Shahzad’s failed bombing of Times Square, all the connections seem to run through Pakistan.

From the Los Angeles Times on Sept. 9:

Pakistani authorities have charged three men with terrorism-related offenses for allegedly helping failed Times Square bomber Faisal Shahzad prepare for the attempted May 1 attack by arranging meetings with top Pakistani Taliban leaders and sending him money, a senior police official in Islamabad said Wednesday.

The three men, Shahid Hussain, Shoaib Mughal and Humbal Akhtar, are relatively young, middle-class Pakistanis who have been close friends with Shahzad for several years, said Deputy Inspector Gen. Bin Yamin. They allegedly facilitated Shahzad’s training at Taliban boot camps in Pakistan’s largely ungoverned tribal areas and arranged for him to meet with Pakistani Taliban leader Hakimullah Mahsud.

When Shahzad ran short of money in the U.S. as he prepared for the bombing attempt, the three men sent him $13,000, Yamin said.

Say, where did three young Pakistani males get $13,000 in spare change in the first place?  They must have had a larger benefactor.

Next, on Sept. 17, we have this article entitled “US man of Pak-origin accused of funding Times Square bomber,” from the Indian Express:

Mohammad Younis, an immigrant from Pakistan living in the US, has been charged for providing money to Faisal Shahzad who has pleaded guilty for trying to blow up part of Times Square in May this year.

Younis, who lives in Long Island, allegedly gave thousands of dollars to Shahzad as part of a “hawala” money transfer from Pakistan, which has come under the spotlight in recent years for being used to funnel money to extremist groups.

However, 44-year-old Younis was unaware that money would be used in a terror plot, which had been hatched while Shahzad was training with the Taliban in Pakistan, according to the prosecution.

Younis, who has been charged for operating an unlicensed money transfer business and conspiracy, pleaded not guilty and could be sentenced up to 10 years in prison if convicted.

With legal prosecutions of Faisal’s financiers pointing back to Pakistan, one suspects that Pakistan’s intelligence service, the ISI, was aware of these financial transactions.  Or was the ISI the source of the $13,000 that Shahzad’s “friends” transferred to him?

Earlier this summer, L.A. writer Karen Fish argued that U.S. tax dollars ultimately funded Faisal Shahzad’s failed Time Square bombing through Pakistan and the ISI.  We don’t have rock solid proof, but it’s a perfectly plausible argument.

Murder for hire, Iran-style

Getting bored by paying Muslims to kill Jews in Israel, Iran is paying Muslims to kill Western troops in Afghanistan.  Remember, Iran’s economy is in the toilet, inflation is out of control, and Ahmadinejad has to tax the stuffing out of the local bazaar businessmen to try to shore up their budget.  Yet somehow they found the money to offer cash prizes to the Taliban for killing American soldiers.

From MSNBC on Sept. 5:

Charities in Europe “hijacked” by terrorists

Europol says that more money than ever is being donated to Islamic charities and being used to finance terrorism.  The Daily Express says the public is being “duped” and that the charities are being “hijacked.”  But how can it be a “hijacking” when one of the Koran’s stated purposes of zakat is for fighting in the cause of Allah?

Or perhaps the Daily Express means that secular and Christian Europeans are making donations in zakat drop boxes because they actually think that their money will go towards causes like Pakistani flood relief, Palestinian orphans, and poverty reduction in the third world.

At least the news is a somewhat encouraging sign that Europe is acknowledging the problem.

TERROR GROUPS HIJACK CHARITY CASH

Sunday September 5, 2010

By Ted Jeory

UNSUSPECTING members of the public are being duped into donating cash to charities that are fronts for terror groups.

Europol, an arm of the European Union that gathers information from national police forces, says “substantial” amounts of money innocently donated to apparently good causes is ending up in the pockets of terrorists.

Even raffles are being used to con people, Europol believes.

It is also highlighting an increasing trend by terrorists to use women. A spokesman for Europol told the Sunday Express: “Women are involved in propaganda, support and financial activities. Men are more likely to be involved in actually perpetrating violence.

“Women are also used as cash couriers and they sometimes smuggle documents and take care of administrative matters.”

In a report detailing trends in terrorism and extremism in the EU, Europol says Britain is the number one target for terrorists.

It identifies Islamic extremism as the biggest threat, with the growing power of radical youth groups of particular concern.

In trying to combat the threat, EU police forces want to cut the lifeline of illegal funds, which also come from organised crime. The EU Terrorism report for 2010 says: “Illegal sources for the financing of terrorism cover a wide range of criminal activities including fraud, counterfeit products, drug smuggling, kidnapping, human trafficking and extortion.

“Alongside criminal activities, funds can also be derived from legitimate sources. Charitable organisations continue to be misused by individuals who misappropriate voluntary contributions destined for genuine purposes to fund terrorist activities.”

Another conviction against Islamic charity leader

The zakat defenders are still out there claiming that there have been “no convictions” of Islamic charities.  They ignore the Holy Land Foundation convictions, the racketeering conviction against the CEO of Benevolence International Foundation, the successful deportation hearing against the founder of Global Relief Foundation, and convictions of Islamic American Relief Agency leaders.

Earlier this month the leader of the Oregon branch of Al Haramain Islamic Foundation, one of the handful of charities designated by the U.S. Treasury Department, was convicted on charges related to smuggling cash out of the country to jihadists overseas.  “Peace activist” Pete Seda now joins the ranks of the other Islamic charity leaders living behind bars.

From the Register-Guard on Sept. 10:

An Oregon federal jury convicted an Ashland Islamic charity leader Thursday of conspiring with a Saudi associate to smuggle $130,000 out of the United States with the intent of funneling it to Muslim fighters battling Russian troops in Chechnya.

The panel also convicted Pete Seda of filing a falsified tax return for his Al-Haramain USA charity to hide that offense. The jurors deliberated for 1½ days before delivering their 6 p.m. decision.

Seda’s face grew grim, but he otherwise was stoic as a court bailiff read the verdict. There was quiet weeping among more than a dozen of Seda’s family members and other supporters in the Eugene courtroom.

U.S. District Judge Michael Hogan set a Nov. 23 sentencing date for the Iranian born, 16-year U.S. citizen. But he ordered Seda taken into immediate custody after prosecutor Charles Gorder, Jr. argued that he might flee the country, as he did in 2003 after learning he was under investigation.

Defense attorney Steve Wax had urged that Seda remain out on bail, noting that his client had voluntarily returned face his charges in 2007.

Seda was indicted in February 2005, along with co-founder Soliman Al-Buthe and Al-Haramain USA. Al-Buthe lives in Saudi Arabia, which has no extradition agreement with the United States.

Though the charity was branded a global terror organization by U.S. officials, charges against it were dismissed when it became defunct after Seda’s 2003 departure. Other former U.S. associates of the group are suing the government for wiretapping their phone conversations without a warrant. A federal appeals judge ruled this spring that those wiretaps broke the law.

Oregon U.S. Attorney Dwight Holton praised the verdict Thursday night.

“Money is the lifeblood of terrorism in these shady, violent, religious extremist groups,” he said. “If we can stop the flow of money, we can significantly reduce the threat here at home and abroad.”

He said the jury found that Seda lied to U.S. customs and IRS officials to duck reporting requirements “vital to our effort to make sure that money does not land in the hands of terrorists or other violent extremists.”

Read the rest of the story here.

Getting the goods into Iran: the story of Amir Ardebili

Amir Ardebilli, an Iranian citizen and supplier for the Iranian military, wanted to secretly amass items for Iranian air defense.  In contradiction to U.S. export control laws, Ardebilli sought sensitive technologies like aircraft parts, communications equipment, and night vision devices. Now he’s serving a 60-month prison sentence.

In a speech to the Washington Institute on Sept. 2, John Morton, the director of U.S. Immigration and Customs Enforcement (ICE) under the Department of Homeland Security, outlined the role of ICE in export control.  Morton provided several examples of successful export control investigations such as the one into Ardebili’s activities.  This portion is 2½ minutes–take a listen: 

Terrorists are minority of money launderers

According to an ABC Bank presentation in 2008 on anti-money laundering awareness, money laundering is perpetrated mostly in the areas of smuggling, drugs, and other criminal activity.  Terrorists make up only a small portion of laundering worldwide.

Slide from ABC Bank presentation

Agreed, terrorists make up a minority of money launderers.  That’s the problem.  Terrorists don’t specialize in taking dirty money resulting from crime, make it “clean,” and reintegrate it into the normal economy. 

What the jihadists do is take relatively “clean” money—money from charitable contributions (some given honestly but much given with the intent of funding terror), money from Koranic mandated sources of zakat and khums—and redirect for jihad.  Although funding terrorism is illegal under Western laws, using zakat to fund the mujahideen is lawful activity within the context of Islam.

Poor follow-through by FinCEN?

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.