Archive for September, 2012

h1

Islamic charity gun-running for Syrian rebels

September 21, 2012

The Turkish Islamic charity IHH is sending guns and money to Syrian rebels according to the Jewish Chronicle.  It’s just the latest in a long series of partnership with violent Islamist groups:  in addition its role in the Gaza flotilla, IHH has been banned by Germany for funding Hamas, and IHH has worked cooperatively with al-Shabaab in Somalia.

IHH is proving to be very similar to Hamas and Hezbollah.  It uses its widespread charitable endeavors as cover for militant, jihadist objectives.

From TGMDBR on Sept. 16:

Turkish IHH Involved In Gun Running To Syria?

Jewish media in the U.K. is reporting that the IHH, a Turkish charity tied to the Global Muslim Brotherhood and sponsor of the June 2010 Gaza flotilla that was involved in a violent altercation with Israeli naval forces, may be involved in transporting weapons to Syria on behalf of the Syrian Muslim Brotherhood. According to a Jewish Chronicle report:

There is evidence to suggest that IHH, the Islamic charity that helped organise the 2010 flotilla to Gaza, has been involved in gun-running to Syria on behalf of the Muslim Brotherhood. Free Syrian Army commanders have told The Times that a boat containing weapons that docked in Syria this week was registered to members of the IHH, which has ties to the Muslim Brotherhood. Samar Srewel, an FSA activist who had helped to organise the consignment, told The Times: ‘It was clear from that second what was happening. The Muslim Brotherhood, through its ties in Turkey, was seizing control of this ship and the cargo. This is what they do. They buy influence with their money and guns.’ In Syria, rebel groups that have ties to the Muslim Brotherhood are said to have the best weapons and equipment. About a quarter of the 130 members of the Syrian National Council have links to the Muslim Brotherhood.

A post from June reported that the President of the Humanitarian Relief Foundation (İHH) was being investigated for allegedly financing al-Qaeda through his organization.

h1

Iran attempts cyber strike at U.S. financial firm

September 20, 2012

Last year, Ayatollah Khamenei and Mahmoud Ahmadinejad promised that the new Iranian year would be “A Year of Economic Jihad.”  Now we have a better understanding of what they meant.

The Washington Free Beacon (h/t Rantburg) is reporting that Iran launched a failed cyber attack against a major U.S. financial institution:

The Iranian government recently conducted a major cyber attack on a major U.S. financial institution that a military intelligence report said is a sign Tehran is waging covert war against the West.

The cyber attack was not successful but was one of several Iranian-backed electronic strikes detected in recent months that highlights the growing threat from Tehran, a major backer of international terrorism, according to a recent report by the Joint Staff intelligence directorate, known as J-2.

“Iran’s cyber aggression should be viewed as a component, alongside efforts like support for terrorism, to the larger covert war Tehran is waging against the west,” the report, dated Sept. 14, concluded.

Iran’s hostile posture against the United States is well known. However, the Joint Staff J-2’s hawkish assessment of the Iranian threat contrasts sharply with the more conciliatory policies of the Obama administration, a defense official familiar with the report said. For Pentagon’s J-2 to acknowledge in the internal report that a covert war is underway was unusual, the official added.

Since 2009, the administration has avoided supporting the Iranian opposition groups that took to the streets to opposed rigged elections. The administration also opposes a near-term Israeli military strike on Tehran’s nuclear facilities favoring instead the use of economic sanctions, which critics say have not slowed Iran’s drive to develop a nuclear weapons capability.

The International Atomic Energy Agency reported earlier this month that Iran is building up stockpiles of enriched uranium and continues to stonewall the U.N. nuclear watchdog on its nuclear arms-related work.

No other details were available on the previously undisclosed attempted Iranian financial cyber attack…

Also recall that author Kevin Freeman has said that leading up to the 2008 financial collapse, the NASDAQ was hacked, that Lehman Brothers was a financial target of terrorists, that German intelligence has reported financial terrorism activities since then, and that damaging the credit of Western nations was an objective of Osama Bin Laden shortly before his death.

h1

Peace in our time… if the price is right

September 19, 2012

Possible Arab thumbing U.S. cash

The Taliban is willing to accept truce with the government of Afghanistan contingent on the replacement of U.S. military presence with U.S. “economic assistance,” according to a report published this month describing interviews of Taliban leaders conducted by the Royal United Services Institute.

Can you imagine the pain that the 9/11 victims’ families would endure if their tax dollars were spent on foreign aid to a Karzai-Taliban coalition government?  It is outrageous that our government would even consider negotiations under terms floated in the RUSI interviews.

h1

U.K. reviews Islamic charity for Boko Haram ties

September 18, 2012

Britain’s charity regulator is looking into whether the London-based Al Muntada Trust is the same entity that Nigerian authorities say is funding the radical Islamic terrorist group Boko Haram.  At least one member of the House of Lords believes there is evidence to justify the investigation.

But don’t get your hopes up for positive identification by the Charity Commission—the same entity that whitewashed the links between the British Islamic charity Muslim Aid and the Palestinian Islamic Jihad terrorist organization.

From the Third Sector on Sept. 10:

Charity Commission examines terror funding allegation

The Charity Commission is trying to establish the identity of a charity linked to allegations of funding the Nigerian Islamist group Boko Haram.

A commission statement said it was aware of claims made in The Observer that a charity called the Al-Muntada Trust has given financial support to Boko Haram, which has links to the terrorist group Al Qaeda and is connected with attacks against churches and Christians in Nigeria.

A spokeswoman for the Charity Commission said it was trying to establish which particular charity the allegations concerned.

“The commission is aware there may be some concerns with regards to an organisation entitled ‘Al-Muntada Trust Fund’ and specifically allegations that this organisation has provided financial support to the Nigerian group, Boko Haram,” she said.

“There are a number of registered charities with a similar name to this organisation. The commission is not able to confirm at this stage whether or not this relates directly to a UK-registered charity.”

There are two organisations on the Charity Commission register called the Al-Muntada Al Islamia Trust and the Al-Muntada Al-Islami Trust. Neither could be contacted by Third Sector for comment.

A spokeswoman for the Metropolitan Police said it was aware of the allegations, but there was no criminal investigation under way.

“We are aware of the information and are in close contact with the Charity Commission, who are assessing it,” she said. “Should any allegations of criminal offences come to light we would investigate.”

Boko Haram has also been known to finance its activities through bank robbery, which they have some basis for believing  is permissible under Islamic law.

h1

UN sanctions only 6 of 34 Taliban governors

September 17, 2012

The Taliban has powerful shadow governors overseeing operations in nearly every province in Afghanistan.  But the UN-imposed asset freeze, travel ban, and arms embargo against the Afghan terrorist group excludes dozens of these Taliban governors from international sanctions.

A new report from the UN’s Taliban sanctions monitoring team indicates that at least six, but no more than 11 Taliban provincial governors, are blacklisted under UN Resolution 1988—the 2011 resolution that separated the Taliban and Al Qaeda sanctions lists.  At least 42 individuals are known to be serving or have served as provincial governors in the past year.

The monitoring team recommends that the UN security council consider sanctioning these individuals, saying “it would seem logical to add the missing names.”

The report notes that the provincial governors often move across borders, and applying the travel ban would help increase pressure against them.

Although the UN report received ample media coverage for its analysis of the Taliban’s revenues, the revelation that so few Taliban governors are sanctioned was totally overlooked by the news wire services.  Reuters didn’t mention the recommendation, the Associated Press focused on sanctions as a negotiation tactic, and Agence France Presse focused on Taliban fundraising.

Hat tip to Twitter user El Grillo for sending a link to the text of the UN report.

h1

U.S. banks should review Nicaraguan accounts

September 16, 2012

While the report that Hezbollah operates a training camp in Nicaragua has garnered a lot of attention, the terrorist financing implications have barely been discussed.  Fortunately, Kenneth Rijock has taken up the issue, and offers some astute analysis on how the news should affect compliance officers at U.S. and Canadian financial institutions in their evaluation of correspondent relationships in Nicaragua and Honduras.  From Rijock’s financial crime blog last week:

HEZBOLLAH MONEY LAUNDERING OPERATIONS IN THE WESTERN HEMISPHERE

The international media today discussed the reports of a Hezbollah terrorist training camp, located in Northern Nicaragua, near the frontier with Honduras, where 30 cadre are reportedly preparing trainees for attacks upon the United States, in the event that America, or Israel, attempts to destroy Iran’s illegal nuclear programme. This is extremely disturbing; Hezbollah Venezuela has existed for several years, but an organised Hezbollah presence in Central America presents a clear & present danger to the Continental United States.

There is an even more ominous aspect to this camp: buried in the reports about the camp is the information that it is also being utilised for money laundering activities. We know that one of Hezbollah’s principal methods of financing its operation is the sale of cocaine, but are they also laundering the criminal proceeds of others?

Regular readers of the blog will recall the seizure of millions of dollars, in the general area recently, in the possession of a well-prepared group of Mexican bulk cash smugglers, posing as media employees arriving to cover a criminal trial. If Hezbollah is laundering Mexican cartel, or Colombian trafficker profits, it will probably be using commercial banks in Central America to accept the dollars, which means they will later transit US banking centres.

If you are a compliance officer at a North American bank that has correspondent relationships with Nicaraguan commercial banks, casas de cambio, or non-bank financial institutions (NBFIs), you may want to determine whether volume from those correspondents has increased of late, and whether your correspondent’s clients have legitimate lines of business to justify the additional funds.

h1

HSBC’s mixed record on Sudan

September 14, 2012

Since 1997, the U.S. has maintained sanctions against Sudan, a state sponsor of terrorism.  The United Nations has imposed an arms embargo on Sudan’s Darfur region since 2004 and asset freezes of some Sudanese officials since 2005.  The U.S. Office of Foreign Assets Control (OFAC) has limited U.S. dollar transactions in Sudan since 2005.

But those sanctions have not prevented HSBC from periodically making improper transactions in U.S. dollars in Sudan from 2005 to 2008.  The instances described do not sound like intentional efforts to undermine the international sanctions regime against Sudan, but the actions were nonetheless negligent.  From the U.S. Senate’s report on HSBC earlier this summer (with internal citations omitted):

A second set of OFAC sensitive transactions involved Sudan, a country which is also subject to a comprehensive sanction program in the United States.  Internal bank documents indicate that, from at least 2005 to 2008, HBUS processed a considerable volume of U.S. dollar transactions involving Sudan that, once the new GCL [group circular letter from HSBC’s Compliance Group] took effect, should have decreased. The reasons they continued include a wide range of factors, from inadequate bank staffing reviewing OFAC transactions, to deceptive wire transfer documentation, to ongoing actions by HSBC affiliates to send these potentially prohibited transactions through HBUS.

In August 2005, a month after HSBC Group issued the GCL policy barring HSBC affiliates from engaging in U.S. dollar transactions in violation of OFAC prohibitions, HSBC Group head of Global Institutional Banking, Mark Smith, circulated a managerial letter identifying correspondent relationships that would be affected.  The letter stated: “An overriding observation is that the revised policy will most significantly impact the Cuban and Sudan correspondent bank relationships.” It also observed: “For Sudan and Cuba, most of our business is conducted in USD and the discussions already initiated with the affected banks will dictate the extent of our ongoing relationships.” In September 2005, a senior HBEU payments official Rod Moxley completed an analysis of U.K. transactions over a 10-day period that were stopped by the WOLF filter and noted “a considerable number of USD denominated transactions” for Sudan.

A year after the GCL took effect, however, one affiliate attempted to clear a Sudan-related transaction through HBUS in violation of company policy. On December 6, 2006, HBUS blocked a $2.5 million payment originating from an HSBC branch in Johannesburg, because the payment details referenced the “Sudanese Petroleum Corporation.” Although the payment had also been stopped by the WOLF filter in HSBC Johannesburg, an employee there had approved its release and sent the transaction through their correspondent account at HBUS. An internal email from HSBC Johannesburg explained that the release of the funds was:

a genuine error in an attempt to push the day[‘]s work through before the cut-off time. I believe the loss of three staff in the department leaving only two permanent staff remaining is causing the[m] to work towards clearing their queues rather than slow down to read the warnings such as these. … Having said that I also feel it is a matter of training where seeing the word ‘Sudan’ alone should have been warning enough.

The email also noted that the transaction had been sent by Commercial Bank of Ethiopia, which was “aware that this payment may not go through as they have attempted to make this payment via their other correspondent banks and failed.”

In July 2007, HBUS discovered that another client, Arab Investment Company, had been sending “multiple Sudan-related payments” through its U.S. dollar account at HBUS, that other banks later blocked for specifying a Sudanese originator or beneficiary, “suggesting that HBUS has been processing cover payments for this client.” An email identified seven wire transfers over a one-year period, collectively involving more than $1.1 million, in which the documentation provided to HBUS made no reference to Sudan, preventing the transfers from being stopped by HBUS’ OFAC filter. The email noted that two of the wire transfers later blocked by other banks had resulted in letters from OFAC seeking an explanation for HBUS’ allowing the transfers to take place, and suggested closing the client account to prevent more such incidents.

On another occasion, HBUS identified five wire transfer payments between January and November 2007, totaling more than $94,000, that turned out to be intended for a Sudanese company, but had been processed as straight through payments at HBUS, because “there was no beneficiary address and no mention of ‘Sudan’.”

In still other cases, wire transfers clearly referencing Sudan were stopped by HBUS’ OFAC filter for further review, but then allowed by HBUS staff to proceed. An HBUS internal report on OFAC compliance noted, for example, two blocked wire transfers involving Sudan, one for over $44,000 and the other for over $29,000, blocked on November 5 and December 7, 2007, respectively, by HBUS’ OFAC filter, but subsequently “released due to human error.”

In August 2008, HBUS noted that it was then holding over $3.2 million in Sudan-related payments sent to the bank from other HSBC affiliates.

The bulk of the funds came from blocking a $2.5 million payment from HSBC Johannesburg destined for the Sudanese Petroleum Corporation, but three other Sudan-related payments from HSBC affiliates were also identified, a $300,000 payment sent by HSBC Hong Kong; a payment for more than $367,000 payment from HSBC Dubai, and a payment for more than $58,000 from British Arab Commercial Bank Ltd.

The email listing these blocked funds noted that a court order was seeking transfer of the funds to a federal court in the United States in connection with a lawsuit seeking compensation for the families of 17 U.S. sailors killed in a 2000 terrorist attack on the USS Cole in Yemen.

In August 2010, in connection with an effort to exit correspondent relationships with 121 international banks that HBUS determined it could no longer support, HBUS CEO Irene Dorner sent an email noting references to 16 banks in Sudan. Ms. Dorner wrote:  “In Phase 2 there will be Trade names the exit for which may be more complicated but to give you a flavor of the problem we seem to have 16 correspondent banks in Sudan which cannot be right.”