Posts Tagged ‘extortion’

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30 sugar smugglers ID’d as al-Shabaab financiers

May 8, 2015

Money Jihad readers may recall that Kenya recently sanctioned 86 people and 13 money transfer companies for their financial ties to the Somali terrorist group al-Shabaab. It has since been revealed that 30 of the sanctioned individuals are sugar smugglers. (Hat tips to Chris Pariso and El Grillo.)

The Star reports:

…A confidential government report seen by the Star says: “Most of the smuggled sugar enters the country [Kenya] from areas controlled by al Shabaab in Somalia. The sugar barons pay illegal levies (or protection fees) to al Shabaab, who in turn uses the proceeds to fund terrorist activities/operations…

Imposing taxes on businesses is a common al-Shabaab tactic. They do it on the charcoal supply chain, the telecommunications sector, the remittance industry, etc.  Sugar and charcoal tax rates are often based on the rate set for zakat in the Koran:  2½ percent.  Money Jihad has previously covered how lucrative the sugar trade has been for al-Shabaab here.

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ISIS money man describes 6-figure cash smuggling

May 4, 2015

Abu Hajjar, a high-ranking leader of the Islamic State of Iraq and Syria (ISIS), has explains how he distributed hundreds of thousands of dollars to ISIS fighters in a recent interview with BBC Two.  Abu Hajjar also addresses what he calls the Islamic State’s principal source of revenue:  the taxation of businesses and commerce in the areas under ISIS’s control.  He concludes that ISIS will never run out of money as long as businesses are still operating in Iraq.

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Where the D.C. sniper got his money

February 16, 2015

Thirteen years ago today, John Allen Muhammad and Lee Boyd Malvo began a series of shootings that would culminate with the Washington, D.C.-area sniper killings of October 2002. Their first victim was a then 21-year-old Keenya Cook, who survived a point blank gunshot to the head in Washington state in February 2002.

Livelihood before the killing spree

Muhammad served in the U.S. military from 1978 to 1994. With 17 years in service, he would have been three years shy of receiving an Army pension. As a civilian in the 1990s, Muhammad tried to make ends meet by starting a business, but the Washington Post called Muhammad “a serial loser” and “failed businessman whose karate school and car-repair business went bust.” He had hoped to teach karate to Muslim boys but there wasn’t enough demand.

In 1994, Muhammad began attending Nation of Islam meetings, and formally joined in 1997. The Nation of Islam Muhammad denied that Muhammad served as a paid security guard during the Million Man March in 1995, and said it ultimately “lost contact” with Muhammad in 1999.

Around that time, Muhammad traveled to Antigua, where he began making money by forging citizenship documents for Jamaicans at $3,000 per set. The buyers would use these forged documents to gain entry into the U.S. This is how Muhammad met Malvo, a Jamaican teen attempting to immigrate illegally into the U.S.

2002

After shooting Keenya Cook, unemployed drifters Muhammad and Malvo left Washington on a cross-country odyssey until their main shooting spree in the fall. How did they pay for basic necessities and travel? The answer is probably through crime.

For example, Muhammad stole steaks from a grocery store in February. He and Malvo lived in homeless shelters. In March of that year, the pair stole a credit card from a Greyhound bus driver in Arizona. (Muhammad didn’t use this card for any expenses except for a $12 purchase at a gas station. But it was Muhammad’s intention to use this stolen account to receive a future ransom from authorities in exchange for stopping the October shootings.) In August, Malvo stole the wallet of one of their shooting victims in Louisiana. In September they robbed a liquor store in Alabama.

DC sniper attacks

Muhammad had larger ambitions than sleeping in cars and eating stolen food for the rest of his life. According to Malvo, Muhammad wanted to establish a terrorist training camp for orphans and homeless boys. Muhammad believed that he could blackmail the authorities to give him $10 million to stop his killing spree. With that $10 million, he and Malvo would flee to Canada and build their encampment there. Prosecutors discounted this theory, alleging instead that Muhammad mainly wanted to regain custody of his children from his ex-wife, but the judge found that motive implausible.

Here’s an excerpt from the $10 million ransom note Muhammad left for police in the middle of his killing spree:

Letter from the D.C. sniper

While there is no evidence of foreign sponsorship behind the D.C. sniper’s attacks, it is worth noting that the Taliban came into existence by recruiting from orphanages and madrassas in Pakistan. Like them, Muhammad somehow got the idea that starting such a camp would be a goal worth killing for. Law enforcement said that Muhammad “modeled himself” after Osama Bin Laden.

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How extortion dropped 50% in Mexican town

January 23, 2015

Authorities report that complaints of extortion in Nezahualcóyotl, a city on the outskirts of Mexico City, fell from 172 in 2013 to 86 in 2014. Police chief Jorge Amador attributes the decline to prevention and guidance for the public about how to defend themselves from extortion attempts. Education is especially useful in combating telephone extortion (also known as virtual kidnapping schemes) in which the callers pretend to have carried out a kidnapping of a loved one and demand payment of a real ransom.

U.S. officials have begun catching onto the spreading threat as well. The FBI, New York City, and law enforcement in Texas have been trying to tell people how to deal with extortion threats by phone. That’s a step in the right direction because, if the numbers and explanation for the decline in the Nezahualcóyotl case are true, a public awareness campaign will help stop this outrageous scheme.

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Chiquita partly off hook in terror finance case

November 4, 2014

A lawsuit by 4,000 Colombians against corporate fruit giant Chiquita for making $1.7 million in extortion payments to militants in Colombia from 1997 to 2004 was dismissed by the 11th U.S. Circuit Court of Appeals in Atlanta this July. The appeals court found that the activity wasn’t subject to U.S. jurisdiction since it all took place in Colombia. Chiquita has already paid a $25 million fine in connection with the case in 2007.

Plaintiffs might have better luck if they pursued damages on the basis of the U.S. Anti-Terrorism Act, which was recently used successfully to prosecute Arab Bank for handling Hamas bank accounts, rather than relying on the Alien Tort Statute. Presumably, Chiquita could still be held liable under other statutes because extortion payments may have been directed by their offices in the U.S. That being said, Arab Bank intended to support Hamas while Chiquita’s underlying intent was to protect its employees from attacks by paramilitary insurgents.

While the original amount of $1.7 million in extortion payments is less than the $4 million that Arab Bank transferred to Hamas leaders from 2000 to 2001, or the $12.4 million that the Holy Land Foundation gave to Hamas from the mid- to late-1990s, it’s still a lot of money. Even though at least one prominent Filipino politician has endorsed paying off guerrillas, the Chiquita case serves as another reminder that international corporations shouldn’t pay ransoms or meet the extortion demands of local rebel groups or terrorists.

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Mexican extortion scheme spreads to Texas

August 14, 2014

“Virtual kidnapping” ransom schemes have migrated from Mexico to El Paso according to border city medical doctors. Criminal groups call the physicians and tell them a loved one has been kidnapped, and demand that a ransom payment be wired to Mexico.

This development is ominous because it indicates the spread of socially destabilizing extortion rackets from the Northern Triangle and Mexico into a U.S. border state. Whether drug cartels, human smugglers, cuota syndicates, street gangs, or garden variety con artists are behind the scheme isn’t really the point.

The thing to do is to educate the people who are at risk for being targeted, to persuade them to report such incidents to law enforcement, and to refuse payment. Otherwise, if the ball really gets rolling and Americans comply with ransom demands more often, then that will drive up the amounts demanded and the trend will become more difficult to stop.

Gives a whole new meaning to the phrase, “doctors without borders”… From the El Paso Times (h/t @1389):

‘Virtual kidnapping’ scam targets El Paso doctors

Scam strikes area medical professionals, does not appear cartel-related

By Daniel Borunda / El Paso Times

Posted:   08/02/2014

A terrifying telephone scam known as a “virtual kidnapping” is targeting doctors in El Paso and other Texas border cities.

An El Paso Police Department spokesman on Friday confirmed that police are aware of the extortion scam and a warning that has been circulating among the local medical community about the threatening phone calls, which purportedly come from a drug cartel.

The scheme is a new version of similar telephone scams and “there is nothing to indicate” it is cartel related, police spokesman Officer Javier Sambrano said. The number of reported doctor scam cases was not available.

Virtual kidnappings sprung up in Mexico several years ago feeding off fears of drug violence and abductions. It is called a “virtual kidnapping” because the victim is made to believe a loved one has been abducted when no kidnapping has taken place.

In the latest version, a person calls a doctor’s office and asks for a doctor by name. The caller claims to be from a drug cartel and that the cartel has kidnapped the doctor’s son or daughter. There is sometimes a crying child on the phone. The caller barks instructions, demands a ransom amount and the victim is ordered to wire the money to Mexico.

The victim does not realize no one has been actually kidnapped until after sending the money.

“It is important to take a minute to step back, try to think and remain calm,” Sambrano said.

The scam has been reported in other parts of the Texas-Mexico border.

Last month in South Texas, KRGV reported that a doctor in McAllen received a call claiming that his daughter had been kidnapped by the Zetas cartel. The caller demanded $50,000 or they would deliver his daughter’s head in a bag. Then, a girl crying and begging for her life was put on the phone. The doctor said that the call seemed frighteningly real for about 30 seconds before he became suspicious.

No ransom was paid. The doctor’s daughter was safe and had never been kidnapped.

In April, the FBI website warned about virtual kidnappings targeting U.S. citizens staying in hotels in Mexico.

“Callers impersonate themselves as cartel members or corrupt police officers who claim they’ve kidnapped a loved one and demand a ransom,” according to an FBI podcast. The victim is told to follow instructions in a scam that can run for three days. The FBI said that scammers are suspected to be Mexican prisoners using smuggled phones.

The FBI said the calls have warning signs — the calls come from an outside area code, the ransom is only accepted by wire transfer and the calls never come from the victim’s phone.

Sambrano said the calls are a variation of the “emergency” or “relative in Mexico” telephone scams that have previously hit the El Paso region. In those scams, a caller tricks a victim into believing they are a relative in Mexico. They usually start a call saying “Guess who it is?” They then claim to be the person that the victim guessed. The caller usually says they are coming to visit but then call to say they have been in an accident or arrested in Mexico and ask for money to be wired to save them from their predicament…

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Central American gangs cash in from extortion

July 29, 2014

Guatemalan crooks net $61 million annually

Contributing to the exodus from the Northern Triangle to the U.S. border, gangs and copycat criminals are shaking down Central American businessmen for hundreds of millions of dollars a year.

Guatemalans alone are being hosed for $61 million a year according to that country’s interior ministry.  Shares of the extortion proceeds are sent up the chain of command to key regional gangs including Barrio 18, Mara Salvatrucha, and Los Paisas, which perpetuates the cycle of violence.

Previous attempts to bring the extortion rackets under control have been unsuccessful.

The violence and extortion problem contribute to the flight of illegal immigrants toward North America.  Human smuggling “coyotes” have successfully recruited children to make the trip, telling them that they would be granted legal status in the U.S. based on the Obama administration’s “Deferred Action for Childhood Arrivals” policy.  Besides, there are few opportunities locally other than joining up with the gangsters and extortionists.

The U.S., Mexico, and Northern Triangle countries have to take the extortion developments very seriously.  It’s not just political and it’s not just about illegal immigration.  Unchecked extortion can be a key driver in spinning a society out of control.

The amount of money involved is a growing and significant factor.  The Central American gangs don’t have as much money yet as the FARC in Columbia, but they’re getting closer to that level.