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Passport fraud poses terror finance threat

April 1, 2014

The presence of two Iranians with stolen passports on the ill-fated Malaysian Airlines flight 370 highlighted the ease with which foreign nationals from state sponsors of terrorism can fly with a false identity and gain entry to a NATO country.

Although the men may not have been responsible for the plane crash, the situation raises the question of how often passports are stolen or forged and what threats this presents to the criminals’ purported country of origin.

Interpol says that only three countries in the world screen air passengers against Interpol’s database of stolen passports.  Phony passports are a big problem too.  Earlier this month, customs officials in Dubai seized 52 fake passports on the way into the U.A.E.

In 2010, ABC News reported, “A decade after the Sept. 11, 2001, terror attacks brought to light the dangers of fake IDs, federal undercover agents are still able to easily obtain genuine U.S. e-Passports using clearly fraudulent information that should have raised red flags at the State Department.”  The Government Accountability Office had confirmed previously that obtaining a real passport using fake identification could be done “easily.”  More recently, the Daily Mail reported that fake passports can be purchased through the online Silk Road black market.

Benefits of a fraudulent passport

Individuals can carry out many activities with a fraudulent passport other than boarding a plane.  They can set up bank accounts and apply for credit cards, like one eastern European mob boss did in Canterbury—accounts which he used “to rip off casinos, high street stores, petrol stations and banks.”  Hackers can also set up bank accounts in the U.S. from overseas using false passports, and use those accounts as repositories for money obtained as the result of malware attacks, as a case from a few years ago demonstrated.

Basically, obtaining a fraudulent passport allows malicious actors to “buy citizenship” in a target country.  The Telegraph reported this month that a Bulgarian passport can be purchased underground for £150,000, which enables the buyer to pose as a European Union citizen, even if he or she has a criminal record, and become eligible for government services and public benefits.

PBS’s Frontline has reported that Al Qaeda uses counterfeit passports and has conducted passport forgery workshops “to travel internationally in order to raise funds, recruit operatives, train the operatives in Afghanistan and send them out to plan and conduct terrorist attacks.”

False identities also complicate law enforcement’s efforts to investigate crime.  The CBC recently highlighted the threat of “synthetic ID fraud,” saying that “Fraudsters have been able to obtain driver’s licences, passports, phone numbers and credit cards, as well as open bank accounts, take out bank loans and create companies, all under fake names. By the time police move in, many of the fraudsters have vanished, leaving investigators trying to locate people who never existed.”

Diplomatic passports

Possession of diplomatic passports by ambassadors, consuls, and other diplomatic officials immunize travelers but from bag searches at airports.  This “diplomatic pouch” carve-out presents a significant smuggling risk.

Financial crimes analyst Kenneth Rijock revealed that Hezbollah agents based in South America were granted diplomatic passports by Venezuela, meaning:

Hezbollah agents could transport cocaine in international commerce, without fear of arrest. They also can carry bulk cash, or financial instruments into offshore financial centres, this moving Hezbollah drug profits along on their journey to controlled entities inside Lebanon.  One wonders whether how many Hezbollah agents are running around Europe with Lebanese diplomatic passports, moving cash or cashier’s cheques through EU banks, in support of the organisation’s terrorist goals…

The Venezuela connection was followed by an uproar in Canada over an Iranian national who entered the country with a diplomatic passport issued by St. Kitts & Nevis after the Iranian paid a $1 million bribe to Caribbean officials.

Author of the book Dirty Dealing Peter Lilley once observed that possession of a diplomatic passport from “an obscure country” could be red flag for money laundering.

What can be done

There can always be tighter controls and better physical standards for passports to prevent counterfeiting, the same way that officials do with currency.  More countries could use Interpol’s database of lost and stolen passports, although there are costs associated with that.  The Heritage Foundation has argued that the biographical questionnaire in the U.S. passport application should be modified.  Individuals should also take steps to safeguard their own passports from being stolen or copied.

Another measure to consider would be for some countries to increase the penalties for counterfeit passports.  Hollywood actor Wesley Snipes got off with simply being able to return to his country without even paying a fine after allegedly being caught abroad with a fake South African passport.

This piece has also been published at Terror Finance Blog.

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