Money and terrorists: suggested news reading

• An Iran nuclear deal could represent “the largest cash infusion to a state sponsor of terrorism in modern history“… more>>

• Lebanon isn’t alone in the Middle East drug trade.  “ISIS and the al Qaeda-affiliated Nusra Front are also able to develop their own hash-cash economy“… more>>

• Six Somalis in Minnesota have been charged with supporting the ISIS. Among their activities: selling an old car to cover airfare to Syria… more>>

• A U.S. company is enabling Hamas to mask its IP address, presumably in exchange for money… more>>

U.S. Bank backs out of Dahabshiil deal

Minnesota banks stopped providing remittance services to Somalia in late 2011 over concerns about the risks of terror finance and money laundering. U.S. Bank, a subsidiary of U.S. Bancorp, considered a partnership with Dahabshiil to reinstate money transfer services to Somalia, but cancelled those plans earlier this year.

Minnesotans for a Fair Economy reported in April that:

U.S. Bank officials informed representatives of Minneapolis-based Dahabshiil, a Money Service Business (MSB) that serves the Somali community, that it would not conduct remittances to Somalia…

Community leaders have met with U.S. Bank officials many times since the last Minnesota bank ceased conducting the transactions. Such a meeting took place just two weeks ago.

“On behalf of our community, I am very disappointed by this decision to back out of our agreement,” said Mohamed Nor of Dahabshiil.

U.S. Bancorp explained its decision by saying, “”Unfortunately, because of some items identified in the independent review of Dahabshiil and the inherent risks of doing business in Somalia, we are not able to open an account as we had hoped.”

U.S. Bancorp should be applauded for its sensible decision. There are simply too many questions about the financial relationship between Dahabshiil and the terrorist group al-Shabaab to proceed with business partnerships between Dahabshiil and Western financial institutions.

Stealth finance news: recommended reading

• Although al-Shabaab is funded partly from Somalis in the U.S. sending money home through hawala, Congressman Keith Ellison wants to make hawala easier for them… more>>

• The Dutch parliament votes unanimously to halt $88 million in funds to the Palestinian Authority until it stops using international donor aid to pay stipends to convicted terrorists… more>>

• “The war on terror financing and money laundering has stalled“… more>>

• How banks can recognize when an “funnel account” is being set up to help smuggle humans across the U.S. border… more>>

Money and jihad: recommended reading

• Boko Haram‘s rise to prominence might be explained by foreign funding to the tune of $70 million… more>>

• Witness:  A mosque in Long Island funded a militant jihadist group called Supporters of Sharia… more>>

• Saynab Abdirashid Hussein perjured herself before a Minnesota grand jury about money she raised for jihad in Somalia. Her sentence? Just probation… more>>

• CAIR is furious that banks have closed risky accounts with Iranian students in the U.S….more>>

Suspicious financial actors: recommended reading

Thanks to El Grillo, Pulp Ark, and all those tweeting out good tips:

• CAIR, an co-conspirator in the HLF terror finance case, is complaining about a Minnesota bank that closed suspicious accounts… more>>

• The IRS is employing a man who tipped off an Al Qaeda suspect… more>>

• US Rep. Gerry Connolly (D-Va) will appear at a fundraiser sponsored by Muslim Brotherhood supporters… more>>

• Even people with criminal records can “buy” EU citizenship for £150,000, and all the benefits that entails… more>>

 

Recognizing the risks of Somali remittances

This piece is also appearing over at Terror Finance Blog today:

Last week, Bell State Bank in North Dakota announced that it would stop doing business with companies that remit money to Somalia.  The move follows decisions by Minnesota banks in 2011 to stop providing Somali remittance services, and an attempt by Barclays last year to cut off its partnership with Dahabshiil, a money transfer company with primary operations in Somalia.  The banks have been challenged in courts on both sides of the Atlantic, and advocacy groups have heavily criticized the banks’ decisions on humanitarian grounds.

Indeed, humanitarian considerations are of the utmost importance.  Unfortunately, money transferred to Somalia, particularly through Dahabshiil, all too often falls into the wrong hands and perpetuates the cycle of violence in Somalia.  Banks should stand fast in their original decisions, and here are five reasons why:

1. The risks are real.  The frequency of cases involving Somalis in the West transferring funds to al-Shabaab over the last few years presents genuine concerns to financial institutions.  For instance, four men in California were found guilty last year of transferring money to al-Shabaab through Shidaal Express, a Somali hawala business.  Two Somali women in Minnesota were sentenced in 2013 for sending money to al-Shabaab through several remittance channels including local hawala dealers and Dahabshiil.  A Saudi-American was also indicted last year for wiring money to al-Shabaab.  In 2012, a man in London admitting transferring £8,900 to fighters in Somalia.  Danish intelligence revealed in 2012 that the equivalent of thousands of dollars a day is sent to terrorist organizations outside of Denmark—mostly to Somalia, and often unwittingly.  In addition to genuine risks on the ground in Somalia, Western banks have real reasons for concern that if they continue relationships with Dahabshiil, they could subsequently be fined by regulators at a future date if political winds change.  U.S. banks are surely aware, for example, that decisions on whether to fine, settle with, or prosecute banks with lax compliance programs have a great deal to do with the shifting political and prosecutorial priorities of whoever happens to be in charge at the Department of Justice and the financial regulatory agencies.  One official may take a very friendly view toward facilitating Somali remittances this year, but a different person will be calling the shots two years from now.
2. The risks are not decreasing.  Gone are the days of 2012 when al-Shabaab appeared to be on the ropes in 2012 both financially and militarily.  Al-Shabaab was able to turn around its financial situation after the fall of Kismayo by cutting deals with occupying forces.  Al-Shabaab continues to profit from imposing taxes on commodities such as charcoal and sugar, and their role as ivory trade middlemen between poachers and buyers appears to be growing.  Al-Shabaab is still capable of carrying out devastating strikes such as the Westgate Mall attack and the recent assault against Somalia’s presidential palace that left 11 dead.
3. Dahabshiil poses a unique risk.  Western readers should be aware of alleged failures in Dahabshiil’s anti-money laundering and counter-terror finance compliance programs to include possible extortion payments made to al-Shabaab to operate in Somalia (which Dahabshiil denies).  One Guantanamo Bay detainee previously worked for Dahabshiil, and the presiding officer at a hearing for that detainee determined that his Dahabshiil branch transferred money for terrorism.  However, coverage of these allegations has been limited partly due from legal threats against journalists and online reputation management by Dahabshiil.

Omer Abdi Mohamed gets 12 years in prison

Terror recruiter and financier sentenced in Minneapolis

Al-Shabaab has been able to wreak havoc in Somalia because of its combustible mix of money and jihadist ideology.  Unfortunately, some of al-Shabaab’s revenues originated from donations bundled together by terrorist supporters in Minnesota such as Amina Farah Ali and Omer Abdi Mohamed.

Here’s the latest from Minneapolis:

Four men in Minnesota sentenced to prison for aiding Somali rebel group

MINNEAPOLIS | Tue May 14, 2013

(Reuters) – A federal judge sentenced four men to prison on Tuesday for helping recruit young men in Minnesota to travel to Somalia and fight for the militant group al Shabaab.

Investigators believe about 20 young, ethnic Somali men left Minnesota from 2007 to 2009 to go to Somalia to fight for al Shabaab, which the United States designated a terrorist organization.

Three men who cooperated with investigators were each sentenced to three years and a fourth man was sentenced to 12 years in prison.

“These defendants, by providing material support to a designated terrorist organization, broke both the law and the hearts of family members across the Twin Cities,” U.S. Attorney B. Todd Jones said in a statement.

Eighteen men were charged after a four-year investigation. Eight were convicted and the rest are thought to be fugitives or to have been killed in Somalia while fighting for al Shabaab.

On Tuesday, Omer Abdi Mohamed, 28, was sentenced to 12 years in prison after pleading guilty in July 2011 to one count of conspiring to provide material support to co-conspirators who intended to murder, kidnap, or maim Ethiopian and Somali government troops.

Mohamed, of Minneapolis, admitted that he helped recruits get plane tickets and helped to raise money for them to travel to Somalia to fight with al Shabaab in 2007.

Three men who cooperated with investigators were each sentenced to three years in prison by Chief Judge Michael Davis in Minneapolis federal court…

How exactly did Mohamed raise the money for the recruits?  From the trial brief:

…The defendant and his conspirators went to local malls and apartment buildings to ask for money, claiming it would be used to build a mosque or to assist with relief efforts in Somalia. In fact, the money was to pay for the airfare and travel expenses of the group of men to join in the conspiracy…

If these Somali fellows had to do all this legwork to finance their travel to Somalia, it makes one wonder how Tamerlan Tsarnaev secured funding to travel to Dagestan.  Public benefits and proceeds from casual drug sales may have been insufficient, and Tsarnaev didn’t have access to community donations in the same way the Minnesota Somalis have had.  Did Tsarnaev’s in-laws unwittingly pay for his trip?

Terror finance termagant finally sentenced

Local Somali activist says financier “deserves the Nobel Prize”

Amina Farah Ali was convicted in 2011 of supporting terrorism by collecting donations and transferring them to al-Shabaab for jihad in Somalia.  Her sentencing took place last week.  Ali could have been sent to prison for 195 years, but the federal judge Michael Davis imposed a 20-year sentence.

Despite Judge Davis’s lenience toward Ali, CAIR is filing a complaint against him over questions he asked her during sentencing (h/t @1389).

The Minneapolis Star Tribune recorded the reaction from the Somali community following the sentence.  Activist Abdinasir Abdi declared “Amina was a good woman, a mother, a teacher, educator, humanitarian worker. I think she deserves the Nobel Prize because she is a great humanitarian.”  Other Somali leaders blamed the situation on U.S. foreign policy, and one woman brandished a sign saying that Ali is her hero:

Ali’s partner in crime, Hawo Mohamed Hassan, was sentenced to 10 years.  The Tribune also has the report:

Two Rochester women get 10, 20 years for aiding Somalia terrorists

Article by: RANDY FURST , Star Tribune

Updated: May 17, 2013

One got 10 years in prison, the other 20 for funneling money to a group fighting in Somalia.

Two Rochester women were sentenced to federal prison Thursday for their roles in funneling money to an organization the U.S. government has called a terrorist group fighting in Somalia.

Hawo Mohamed Hassan, 66, who got 10 years in prison, and Amina Farah Ali, 36, who got 20, were the last of nine people sentenced in federal court in Minneapolis this week.

The group was the first set of defendants sent to prison from Minneapolis in this country’s largest anti-terrorism investigation since Sept. 11, 2001.

U.S. Chief Judge Michael Davis handed down the sentences before a courtroom packed with the defendants’ families and members of the Somali-American community.

The drama capped a federal investigation that lasted more than four years in which U.S. authorities sought to shut down a recruiting effort that lured more than 20 young men to Somalia, several of whom died fighting or in suicide bombings.

The women, both U.S. citizens who came here from Somalia, were convicted in 2011 of conspiring to provide material support to Al-Shabab in fundraising in Rochester that prosecutors have called “a deadly pipeline” of money and fighters from the United State to Somalia.

They have had wide support in the Twin Cities’ Somali-American community, and many in the courtroom were stunned by the sentences, especially the 20-year sentence for Ali.

Hassan Mohamud, a St. Paul imam, said he believes the sentences were too long and that both women should have been released.

“All they did was aid the poor and the orphans,” he said.

But prosecutors said it was clear from the phone conversations they monitored that the women knew they were raising money for Al-Shabab, a group labeled a terrorist organization by the U.S. State Department in 2008.

While Ali said she never knew that funds she raised were going to Al-Shabab, Hassan claimed that she came to realize the organization was getting the money and broke with Ali, preferring that the money go to set up a senior health center.

But prosecutor Jeff Paulsen cited telephone wiretaps that he said showed there had been no rift between the two and that Hassan had a financial investment in the health center and planned to continue to work with Ali.

Ali, sentenced first, denied she did anything wrong. She said she had no knowledge that the money she collected went to Al-Shabab.

Asked by Davis what she knew about Al-Qajda, she indicated she knew nothing about it.

Her attorney, Dan Scott, said “she chose the wrong horse,” adding, “She thought she was doing good work. She was wrong.”

Defendants in the Somali cases have argued that Ethiopia invaded Somalia to support a newly created transitional government that lacked support from the Somali people. They have said that their clients backed the resistance to the invasion.

However, prosecutors argued that the transitional government was recognized by foreign nations, so any support for Al-Shabab, which was fighting the invasion, was against U.S. law as well as support for a terrorist group.

Steven Ward, who prosecuted the case, said Ali was heard on a wiretap supporting Al-Shabab, saying she supported a suicide bombing and “let the civilians die”…

Somali bank resumes semi-annual, half-million dollar payments to al-Shabaab

An international Somali-based financial institution is reported to have resumed its recurring transfers of $500,000 twice a year to the al-Shabaab terrorist organization.  The longstanding transfers of money from Dahabshiil to al-Shabaab had allegedly stopped temporarily during a dispute between the bank and the jihadist group.

The allegation that payments have resumed is based on Somali radio and Internet sources, but the text of the news report appears to be available only on YouTube, which is one of the few web outlets that has escaped Dahabshiil’s history of attempts to eliminate negative Internet search.
 

Dahabshiil pays half a million dollar to Al Shabab as a tax- Report

Published on Apr 29, 2013

Spokesman of Al Shabab’s Somalia Mukhtar Robow faction told the media that the dispute they’ve had with Dahabshiil has now been resolved.

Al Shabab’s spokesman for operations Abdul aziz abu Musab said Al Shabab accepted the payment of the taxes they used to pay them which is $500,000 for every six months.

“Dahabshil renders services to the infidel government and Christian organizations, therefore we had an agreement five years ago which is basically for them to pay half a million dollars in every six months” said abu Musab.

Radio Al Andalus, the mouthpiece of Al Shabab said that the movement took necessary steps against Dahabshiil when the company refused to pay the tax as agreed.

Dahabshiil is facing a lawsuit pertaining to funding terrorist in the Netherlands. Abu Musab’s statement means a clear testimony that Dahabshiil finances terrorist organization.

Furthermore, Al Shabaab Somalia is facing an internal conflict within the leadership. With this regard, it is believed that Dahabshiil has sided with the Godane faction. The Indian Ocean News letter wrote about Dahabshiil’s setbacks with the headline “Series of hard blows for Dahabshiil”.

Dahabshiil has been the forefront of the money transfer business for a long time, but now the company is struggling with numerous difficulties, specially when Al Shabab closed its branches in Hiiraan, Galgaduud, Bay and Bakool regions. On top of that, Al Shabab has recently blasted the HQ of Dahabshiil in Mogadishu ,Somalia which killed head of the company’s security.

Experts say Dahabshiil is quite similar to sheikhs of Al-itisam or Al-itihad. Both organizations used to support Al Shabab but later on decided to revoke their support. Dahabshiil will be forced to pay the extortion money as long as Al Shabab is in Somalia. The credibility of the news of Dahabshiil’s payments to Al Shabab can be seen through Al Shabab’s internet portal somalimemo.netwhich has been writing stories favorable to Dahabshiil in the last couple of days. The website also posted Dahabshiil’s advertisement at the top of the homepage.

Sources: Kalshaale.com, Khaatumo State Of Somalia, Buhodle City Website.

A Minneapolis-based bank, U.S. Bancorp, established a new relationship with Dahabshiil in April to facilitate remittances from Somalis in Minnesota to Somalia.

Money scheme: Russian mafia conducts tutorials on how to commit car insurance fraud in U.S.

“People would be very shocked to know who is involved,” with the growing number of fraudulent claims, says an insurance industry expert.  Indeed.  From WCCO, the CBS affiliate in Minneapolis, earlier this year:

MINNEAPOLIS (WCCO) – Mark Kulda of the Insurance Federation of Minnesota says anyone involved in even a slight car accident could be at risk for insurance fraud.

“You might be driving down the street and maybe have a very minor accident and that could trigger a case where there could be insurance fraud,” Kulda said. “People would be very shocked to know who is involved.”

Organized crime involved in insurance fraud has gone up from 16 claims five years ago to 53 in 2011.

“There’s evidence that the Russian mafia is here in south Minneapolis setting up fake clinics, staging fake accidents, overbilling, billing for accidents that never happened,” he said.

The criminals cash in by making out on staged collisions and fake personal injury claims – getting as much as $40,000 per person.

“There’s direct evidence to show that those fraudsters are coming here to Minn. and setting up shop,” he said…

TCF goofs on golden gopher terror transactions

TCF Bank Stadium at Univ. of Minn.

Iranian students at the University of Minnesota engaging in possible terrorist financing activities have been allowed to maintain accounts with TCF Financial Corp. until now, as lapses in the bank’s compliance program have come to light during a federal probe.

Several of accounts will be closed despite “concerns that innocent people were being profiled.”  It is unclear why individual account holders should be concerned or who is raising the concerns, since the bank (not depositors) is the party receiving the penalty.

TCF will pay a $10 million fine as part of a consent order with the federal government for its compliance shortcomings, which included filing slipshod suspicious transaction reports (STRs) of “poor quality.”

Hat tip to Sal Imburgia for sending this in.  From the Minneapolis Star Tribune:

TCF to pay $10 million for lapses in monitoring suspicious transactions

By Jennifer Bjorhus

Jan. 26–TCF Financial Corp. will pay $10 million for lapses in monitoring suspicious bank transactions, including potential terrorist financing.

The fine, announced Friday by the Office of the Comptroller of the Currency, caps a long-running probe of the Wayzata bank’s compliance with the Bank Secrecy Act. TCF mishandled mandatory reports regarding questionable dealings, a key tool for law enforcement to prevent money laundering and other illegal activity, federal officials said.

At issue were cash transactions that appeared to be manipulated, and wire transfers where the source and purpose of the funds were unknown, the OCC said.

The Bank Secrecy Act requires financial institutions to make sure illegal money doesn’t flow through their organization, and regulators have stepped up enforcement in the past few years.

Last month, British banking giant HSBC agreed to pay $1.9 billion to settle an investigation focused on laundering money from drug traffickers in Mexico and conducting transactions with sanctioned countries, such as Iran and Cuba. More recently, the Federal Reserve hit JPMorgan Chase & Co. with a cease-and-desist order requiring it to beef up compliance.

As for TCF — the third-largest bank in Minnesota with $19 billion in assets — regulators said the lender botched its required reports.

Between November 2008 and July 2010, TCF was late filing 2,357 reports of suspicious transactions, according to the consent order from the OCC. The filing goes on to say that in 13 cases, involving about $7.2 million, the bank failed to properly file reports “related to transactions indicative of possible terrorist financing.”

The reports to law enforcement were of “poor quality,” it said. In some cases the bank didn’t check the “terrorist financing” box on reports when the narrative section referenced possible terrorist activity, and in other cases the narrative didn’t make clear what sort of suspicious activity had taken place.

In addition to paying the fine, TCF agreed to refile the 13 reports and do employee training, according to the consent order.

TCF issued a statement Friday saying it overhauled its program for complying with the Bank Secrecy Act. It called the settlement a “significant step” toward resolving the consent order that regulators issued against the bank in 2010.

Banks simply haven’t taken suspicious activity reports seriously enough, and the tougher enforcement is overdue, said bank analyst Nancy Bush, a contributing editor of SNL Financial in Charlottesville, Va.

“Banks have every way in the world to track this stuff,” Bush said. “They certainly know what comes in and what goes out of their banks on a daily basis.”

Bush said she thought TCF’s $10 million fine was relatively small: “It seems to be more symbolic than anything else.”

TCF CEO William Cooper was traveling late Friday and couldn’t be reached for comment. In an interview, spokesman Jason Korstange said the bank did a “very, very thorough examination of all our accounts.”

“Ultimately we did not find any terrorist activities,” Korstange said.

The settlement sheds some light on the mysterious letters the bank sent last month to about a dozen students at the University of Minnesota who are from Iran. The letters, in which TCF warned it might close their accounts, triggered concerns that innocent people were being profiled.

Korstange said the bank is still working through that matter. TCF has an exclusive agreement with the university to offer checking accounts linked to school photo ID cards.