Posts Tagged ‘organized crime’

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Dubai: a Mecca for sex trafficking

April 3, 2015

Watch this video to understand some of the basics about prostitution and human trafficking in the United Arab Emirates:

Money Jihad has previously noted that there are connections between jihadist groups and human trafficking syndicates. A study by West Point’s Combating Terrorism Center found that Individuals [within the global illicit marketplace] involved in other illicit activities link to terrorists 35 percent of the time.” Although the video excerpt tends to focus on the women and their experiences, there are powerful networks operating behind them to coerce them into the sex business and skim millions of dollars off the top. Rest assured that the profits from the sex business aren’t being used to build schools and hospitals.

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Money for terror: recommended news reading

March 26, 2015
  • Hamas was on the verge of bankruptcy until a Swiss offer to cover Hamas’s payroll… more>>
  • Bank compliance officers:  Do you know who your customers are in Latin America?  How about the customers of correspondent banks there?  It could include Hezbollahmore>>
  • The Obama administration appears to have violated long-standing U.S. policy in 2010 by having the CIA contribute $1 million toward a ransom payment to Al Qaeda for the release of a captive… more>>
  • Why effective organized crime groups inevitably seek international business relationships… more>>
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Business experts weigh in on ISIS’s organ sales

February 27, 2015

Black market organ sales and the financing of ISIS was the subject of a segment on last Saturday’s edition of the business news show “Bulls & Bears” on Fox News.  Among the more interesting points made during the discussion came from hedge fund manager Gary B. Smith, who suggested that ISIS’s financial swamp can be drained by following the model for prosecuting organized crime rings to include developing informants and flipping them to rat out the big bosses.  That would have been easier if Pres. Obama had tried to keep a residual force in Iraq to include human intelligence forces, but it’s still a valid prescription for tackling ISIS sleeper cells in the West.  Roll tape:

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Terror-weary, IRA shifts to financial crime

August 29, 2014

Coming to terms with their faded, washed out political cause, ex-terrorists of the disbanded Irish Republican Army and their newer generation of recruits have turned to money laundering schemes, organized crime, drug trafficking, and other forms of financial crime.

Like the movie, “The Third Generation,” illustrated, after the wind goes out of the sails of a formerly principled revolutionary group, the newer followers turn to ruthless and petty trifles.

This is something of a cautionary tale for the way the world deals with terrorist organizations and rebel groups who have failed to carry out their main objectives. Is it better to finish them off once and for all, or to let them limp along through banditry? The problem with this case is that the bandits appear to have evolved into a permanent mafia class.

This commentary from the National Post in May sheds more light on the development:

…The more controversial British economic policy post-Thatcher was to effectively allow Sinn Fein’s military wing, the Provisional Irish Republican Army (IRA), to launder the huge amounts of money it had acquired through high-profile bank robberies. This bounty was widely labelled by republicans as a pension fund — or pay settlement — for IRA members.

Instead of trying to recover the funds, the British government turned a blind eye and gave the IRA 10 years in which to legitimize the cash. This the IRA did, with property in parts of Dublin exchanging hands well above the market value. The laundering reached such heights that pubs on the outskirts of the city exchanged hands for millions of euros. While all this initially worked well for the IRA, the spectacular economic collapse of the Republic of Ireland, and in particular the property crash, meant that the ex-IRA members’ funds plunged in value.

British Intelligence agencies kept a close watch on the whole process, and became increasingly alarmed as members of the disbanded IRA turned to more traditional forms of organized crime — such as drug dealing and brothel management in order to make up for shortfalls caused by the financial crash. The absence of foreign organized crime syndicates in Northern Ireland (one of the few positive effects of the conflict) meant that opportunistic ex-IRA members were able to quickly fill this crime vacuum with relative ease.

Ex-loyalist paramilitaries had long since been involved in organized crime in loyalist areas of Northern Ireland. Indeed, much of the violence that has taken place in the so-called post-conflict era has been the result of “turf wars” between rival gangs of loyalists fighting over control of the lucrative illegal drugs markets…

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Mafia makes killing on crash-for-cash schemes

June 24, 2014

A mob-linked auto shop owner has been indicted for insurance fraud. The case of Ronald Galati illustrates the methods employed in this increasingly common form of financial crime and its links to organized crime rackets.

In the blog post below, the executive director of the Coalition Against Insurance Fraud comments that organized crime and insurance fraud are often perceived as involving immigrant groups, which is unfortunately true, and mentions Somalis in Houston as an example. The prevalence of auto insurance fraud by Somali-Americans in Texas is news to Money Jihad. Historically such schemes are associated with Palestinian Arabs in New York and the Russian mafia around the world.

We must admit that the deer blood ploy used in this case is pretty clever. If only Galati had used his cleverness for good rather than for crime…

From Insurance FraudBlog:

Mobster’s reputed auto cons show America can create its own defrauders

May 29, 2014 by Dennis Jay

“I live my life to cheat insurance companies — my high every day is to cheat insurance companies.”

That’s the motto of reputed Philly mobster Ronald Galati, say accomplices arrested in a widespread sweep yesterday. A grand jury in the city of Brotherly Love indicted 41 yesterday for allegedly staging auto crashes and faking damage to previously banged-up cars. Galati and his body shop collected millions from insurers in the scam, prosecutors say.

Investigators say Galati even had shop employees gather and store deer blood, hair and carcasses as props in photos later submitted with claims to insurers.

Participants in the long-running scam include body-shop employees, tow- truck operators, a city cop and two insurer adjusters — plus Galati’s wife, son and daughter.

Galati, an auto mechanic at American Collision, Inc., had strong mob ties and was out on bail for allegedly masterminding a triple murder-for-hire plot against men he believed had testified against him involving the insurance plot?

Much of organized crime involving insurance in America focuses on immigrant groups — Russians in New York City, Armenians in Los Angeles,  Dominicans and Cubans in Miami, and Nigerians and Somalians in Houston.

This case reminds us that we still have home-grown gangsters likely defrauding insurers and their policyholders in every major city…

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Canada: Hezbollah immersed in organized crime

June 23, 2014

Indeed. Most terrorists either personally know or know somebody who knows an organized crime figure, and vice versa.

According to Hezbollah’s Iranian masters, criminal mischief is religiously justifiable so long as it is done to harm the enemies of Islam.

From Sun News on June 3:

Hezbollah tied to organized crime in Canada, says spy agency

MONTREAL – Hezbollah members in Canada are involved in organized crime, according to Canadian Security Intelligence Service reports and documents.

Members of the outlawed group – banned as a terrorist entity in Canada since 2002 – also are secretly engaging in fundraising, procurement of materials and intelligence gathering, according to a “threat assessment” report by the Integrated Terrorism Assessment Centre.

Hezbollah’s activities here were among the subjects the spy agency expressed concern about in a “top secret” 10-page letter he wrote and delivered last July to Public Safety Minister Steven Blaney, soon after he was sworn in…

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Seven habits of highly effective kingpins

May 27, 2014

Criminal and terrorist groups are highly interconnected according to new analysis of data by West Point’s Combating Terrorism Center. The conventional wisdom was that criminals worry that working with terrorists may draw unwanted scrutiny from their governments, and they are only inclined to cooperate only in resource-poor environments where it is necessary to survive. But the CTC finds that transnational traffickers and criminals appear to be more than willing to partner with terrorists, and that they benefit from these relationships in a wide variety of environments.

The full report can be read here. It is very thorough (89 pages) and includes academic language and models. Here are a just a few of the salient points from the study about members of the global underworld that may be of interest to practitioners and analysts outside of academia:

  1. Interconnected: 98 percent of the individuals in the global illicit marketplace are within two degrees of separation of each other.
  2. International: One in three individuals in the network have international relationships.
  3. Distributed power: Unlike typical hub-and-spoke networks where 80 percent of the connections rely on 20 percent of the actors involved, the global illicit network is somewhat less dependent on a small number of powerful actors/kingpins. Twenty percent of participants are responsible for only 65 percent of underworld connections. This diffuse hub-and-spoke model makes the network tougher for law enforcement to disrupt.
  4. Willingness to work with terrorists: “Individuals involved in other illicit activities link to terrorists 35 percent of the time” (p. 43). Terrorists often serve as “boundary spanners,” that link and form introductions between disparate groups such as drug traffickers, arms dealers, and organized crime.
  5. Frequent bilateral links with the United Arab Emirates: The top two bilateral connections in the criminal underworld–the U.S. and Colombia and the U.S. and Mexico–are probably unsurprising to Americans. The third most prevalent bilateral connections are between India and the U.A.E., and the sixth most common are between Pakistan and the U.A.E.
  6. Organized crime, not just terrorism, benefits from state sponsorship. We know that state sponsorship of terrorism exists, but for some reason we erroneously assume that state sponsorship of crime does not. The evidence from North Korea, Russia, the Balkans, and Pakistan indicates that criminals can carry out national interests—a phenomenon deserving further study.
  7. Convergence is not driven by poverty. Terrorists and criminals are drawn together in a variety of environments, not just in countries where there are little money or resources. The evidence indicates that the opposite is often true—that criminal masterminds prefer climates where there is some level of predictability and economic development, such as Monzer al-Kassar operating in Spain and Dawood Ibrahim in Dubai. Focusing only on failed states could be a red herring.

Acknowledgment: Thanks to Twitter user @El_Grillo1 for sending in a link to the CTC study.

This piece has also been published at Terror Finance Blog.

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Terrorist mafia don lives like a king in Karachi

May 25, 2014

After bombing his hometown of Mumbai in the 1990s, Dawood Ibrahim became unwelcome in India and fled to Karachi, Pakistani, where he has maintained a lifestyle of the rich and famous. HindiNest.com is featuring an informative article (h/t @1389) about Dawood, who is protected by active and retired members of Pakistan’s intelligence community. He has extensive operations in Dubai but can’t stay there because the UAE has an extradition treaty with India. An excerpt follows:

…Ibrahim lives like a king. Home is a palatial house spread over 6,000 square yds, boasting a pool, tennis courts, snooker room and a private, hi-tech gym. He wears designer clothes, drives top of the line Mercedes’ and luxurious four-wheel drives, sports a half-a-million rupee Patek Phillipe wristwatch, and showers money on starlets and prostitutes. He bought Lahore model, Saba, with whom he reportedly had a passionate involvement, a house and a car. Nor does he shirk his obligations: Mandakini, of Ram Teri Ganga Maili fame, former Bollywood actress with whom he had a child is reportedly still being supported by him.

His daily regimen is also rather kingly. He wakes in the afternoon. After a swim and shower, he has breakfast. In the late afternoon, he gives his employees an audience where he briefs them on their assignments and they give him daily reports of his myriad businesses.

If in the mood, he engages in a game of cricket or snooker with friends. And as the sun sets, Dawood and his party set off for any one of his ‘safe houses’ in Karachi for an evening of revelry – usually comprising drinks (Black Label is his preference), mujras and gambling. The long-married Dawood’s passion for women has made him a favoured client for local pimps. His current liaison notwithstanding, he whets his allegedly large sexual appetite with a variety of women.

“He prefers virgins, preferably young girls. And he is a good paymaster. If the market rate for a woman is 10,000 rupees, Dawood pays 100,000 rupees. He is thus always surrounded by Pakistan’s top call girls,” discloses one of his family friends.

Carousing through the night, Dawood and his companions quit only at dawn and collectively offer fajr prayers. This has been Dawood Ibrahim’s routine for several years.

From petty street urchin to don of the Mumbai underworld, Dawood’s life makes for a fascinating story.
Dawood seems to have realised early in life that crime paid. His petty exploits sometimes landed him in trouble, but his father’s position as a policeman saved him from being apprehended on several occasions. Soon the Mumbai underworld started taking note of him.

Initially operating independently, Dawood formed his own gang, which grew into a mega crime network over the years. Both Hindus and Muslims worked for him, pursuing his by now multiple business interests, which included drugs, mediating in business disputes, evicting tenants from old buildings and clearing land for purposes of construction.

Ibrahim’s interests soon led him to Bollywood where he became a major film financier. At his lavish parties, there was never a shortage of the mega stars of the day. “They wouldn’t dare refuse an invitation,” says a friend, who maintains that those who opted out on account of shooting schedules would suddenly find their dates had been cancelled or postponed.

Growing Hindu-Muslim tension, fuelled by other underworld dons, which climaxed after the Babri mosque demolition, changed everything. The ensuing blasts in Mumbai, and the communal riots triggered by the underworld itself, caused the Dawood Ibrahim gang to splinter. One of his top lieutenants, Chota Rajan, often described by Ibrahim as one of his ‘nauratans,’ (nine jewels) defected and formed his own group consisting mainly of Hindu boys. Thereafter, Ibrahim was accused of masterminding the blasts, even though he was out of town at the time. He could never return to India. Dubai, which might have been a natural alternative residence, was ruled out because of an Interpol alert for Dawood’s arrest – the UAE and India have an extradition treaty.

Thus Dawood fled to Pakistan, managing also to subsequently smuggle his family, comprising his wife, four daughters and a son, and certain close associates and their families out of Mumbai. (One daughter, 12, subsequently died of malaria and is buried in Pakistan). Today they are all Pakistani passport holders.

For the Muslims of Mumbai, Dawood’s role in the blasts makes him a hero. “You cannot imagine the behaviour of the Hindus towards us before the blasts. They would hurl insults at our veiled women, ridicule us and mock our beards. The blasts changed everything. Now they cannot underestimate our strength; they are afraid of us,” said a shopkeeper from Dawood Ibrahim’s old mohalla on Mohammad Ali Road, a largely Muslim neighbourhood, whose residents shun the press and fiercely guard their privacy.
In Pakistan meanwhile, Dawood managed to establish another huge empire, comprising both legitimate and illegitimate businesses. In fact, the last few years have witnessed Dawood emerge as the don of Karachi.

Dawood and his men have made heavy investments in prime properties in Karachi and Islamabad, and are major players in the Karachi bourse and in the parallel credit system business – hundi. Dawood is also said to have rescued Pakistan’s Central Bank which was in crisis at one point, by providing a huge dollar loan. His businesses include gold and drug smuggling. The gang is also allegedly heavily involved in match-fixing. Dawood’s influence among the Pakistani cricket players is so well known that a senior Pakistan cricket official met Dawood to get the names of those Pakistani cricketers involved in betting.
Some of the Pakistani cricket players admit that at one time or another, they have sought Dawood’s help, financial or otherwise. Javed Miandad is allegedly very close to Dawood Ibrahim, and his recent stint in cricket, despite the opposition from other players, was reportedly at Dawood’s behest.
Dawood’s sphere of influence has also encompassed the business community, with businessmen increasingly approaching Dawood to settle their financial disputes with other businessmen or for financial bailouts. Some former MQM militants are apparently also working for Dawood as trouble-shooters. However, Dawood’s growing influence has irked Karachi’s powerful ethnic group, the mohajirs, who feel Dawood is trespassing on their domain as more and more people are now looking to Dawood to sort out their problems. “Earlier, whether it was a case of financial dispute or the construction or regularisation of an illegal building, people came to us for help. Now all of them are going to Dawood,” remarked a former leader of Altaf Hussain’s MQM.

Dawood’s business activities are not confined to the subcontinent. His network extends to several countries of the African continent, and to Malaysia, Singapore, Thailand, Sri Lanka, Nepal, Dubai, Germany, France and UK. His net worth has been estimated at close to 30 billion rupees.
Meanwhile, not only have the Pakistani authorities turned a blind eye to the gang’s activities within Pakistan, but many in the corridors of power have partaken of Dawood’s hospitality. Dawood often throws lavish mujras for Pakistani politicians and bureaucrats. A recent guest was a former caretaker Prime Minister.

These are not the only members of the establishment who have close ties with Dawood. He is said to have the protection of assorted intelligence agencies. In fact, Dawood and his men move around the city guarded by heavy escorts of armed men in civvies believed to be personnel of a top Pakistani security agency.

A number of government undercover agents, who came into contact with Dawood because of their official duties, are now, in fact, working for him. “A major serves him a glass of water. Nearly all the men who surround him for security reasons are either retired or serving officers,”claims an MQM activist…

Although this article describes Dawood’s net worth as 30 billion rupees (500 million USD), others sources have put it as high as $20 billion.  And although this piece describes his presence in Karachi, Dawood Ibrahim may have recently relocated to a different city in Pakistan–Money Jihad will post more on that tomorrow.

The whole article is well worth reading at http://www.hindinest.com/srajan/02948.htm. It gives a lot of insights into Dawood’s operations and the factionalism among his loyalists.

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City: 28 gangs run 59 businesses that fund terror

November 1, 2013

Birmingham, Britain’s second largest city, has identified 28 criminal gangs that are operating 59 primarily cash-based businesses that are laundering money in part to finance terrorism.

Ever get a funny feeling when you walk into certain shops?  Do you ever find it odd when a big store won’t accept credit cards?  Does the store have signs up forbidding photography?  Do the employees look at you funny when you enter?  Does the business seem to stay open despite a lack of customers, or does it occupy too large a space for the amount of traffic it normally receives?  Do they sell deeply discounted merchandise, such as pirated CDs, DVDs, or dirt cheap cell phones?

Don’t ignore these red flags and your feelings of discomfort.  Don’t buy anything there, and just walk away.

H/t El Grillo.

Birmingham’s crime gangs fund terrorists

23 Oct 2013

City gyms, cafes and restaurants used for recruiting extremists, say police

A top-level police report has revealed crime gangs in Birmingham are funding terrorism.

And the criminal groups now run 59 legitimate businesses in the city, often using them to launder money made from drug dealing, robberies, and even gun-running.

The potential threats facing Birmingham and its residents is laid bare in a detailed report compiled by the Assistant Chief Constable of West Midlands Police, Sharon Rowe.

It was written for Birmingham Community Safety Partnership, involving members of the city council, probation service, police and fire service.

The report, published online, confirms there are currently 28 organised crime gangs (OCGs) operating in the city and highlights the scale of their operations and influence.

But it is believed there are 306 OCGs whose criminality affects Birmingham.

The report states the Birmingham gangs now run 59 legitimate businesses, often using them to launder proceeds from their criminal activities, which include drug dealing, robberies, car key burglaries and even gun-running.

They include pubs, car washes and sandwich shops, which normally deal in cash.

For the first time, the report also reveals some of the groups are believed to be funding terrorism.

It states: “There is evidence that some Birmingham OCGs use the profits from crime to help fund terrorist activities”…

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Video: examples of car insurance fraud

May 4, 2013

Staged accidents.  The “swoop & squat.”  Fake “paper cases.”  It’s a growth sector and revenue generator for organized crime.  You pay the price in increased premiums.  From KSAT in San Antonio earlier this year: