10 biggest terror finance news stories of 2015

1. Funding of Paris attacks

The November 2015 attackers paid for $32,000 worth of pre-attack operations including hotel lodging and car rentals through anonymous prepaid cards purchased in Belgium. Payments were loaded in small increments; rules for prepaid cards allow for reloading up to $2,500 without identity verification. Although the Islamic State of Iraq and Syria (ISIS) is responsible for the attacks and the training of several attackers, the precise source of the $32,000 is less clear. Money for travel appears to have become available after a stopover in Greece.

2. Nuclear deal will release billions to Iran

The nuclear agreement that President Obama signed will release $100 billion to $150 billion of frozen assets to Iran, a state sponsor of terrorism. Hopefully the asset thaw will get gummed up in court while attorneys seek to collect the compensation that is owed to the victims of Iranian-sponsored terrorism first.

3. Wahhabi funding monarch takes power

Saudi Arabia has crowned a new king, Salman bin Abdulaziz, who started his career in public service by bankrolling the exportation of radical Wahhabism throughout the Islamic world. We will be contending with well-funded terrorist groups for as long as men such as Salman rule Arabia.

4. Coalition bombs ISIS oil fields

According to news reports, the U.S. is increasing pressure against ISIS’s financial assets by bombing oil fields in their territory. If true, the bombing means that the Obama administration has begun to recognize that it is worth destroying oil infrastructure to deprive ISIS of funding even if it means it will be harder to rebuild the infrastructure when and if ISIS retreats.

5. Son of terror victim sues wire transfer company

The son of a slain Somali politician and singing star is suing the money transfer company Dahabshiil for its alleged involvement in issuing a bounty for the singer’s murder. Saado Ali Warsame had sung a song denouncing Dahabshiil as a financier of terror and a profiteer from inter-tribal conflict.

6. Jihadists in Yemen fund Charlie Hebdo assassins

Al Qaeda in the Arabian Peninsula (AQAP) gave $20,000 to future Charlie Hebdo attacker Said Kouachi before he and his brother left Yemen in August 2011. The foreign funding helps explain how a group of underemployed ex-cons were able to buy AK-47s for their January 2015 attacks and pay for Said Kouachi’s international travels.

7. PA and PLO owe damages for terror attacks

A jury found the Palestinian Authority and the PLO liable for terrorist attacks with American victims in the early 2000s, with damages set at $656 million in Sokolow v. PLO. A federal judge set $10 million bond while the PA and PLO appeal.

8. Taliban takes control of more turf

The Washington Post reports that the Taliban has taken control or maintains a significant presence in 30 percent of Afghanistan—the most territory it has occupied since 2001. The problem with this from a financial standpoint is that the Taliban lives off the land. One of their primary sources of income is taxation on commercial activity in the areas they control. More turf means more money.

9. Arab Bank settles with terror victims

Arab Bank PLC provided client services to Hamas affiliates which funded terrorist attacks against Israel. After years of lawsuits, the settlement was reached between the bank and American victims of these terrorist attacks, possibly for $1 billion. Together with the Sokolow, these cases show that legal tactics can be used effectively to hit terrorists where it hurts: their wallets.

10. Debt-financing of San Bernadino attack

Syed Rizwan Farook took out a $28,000 debt consolidation loan weeks before waging an assault against his victims. This method of financing attacks is particularly popular among jihadists living in Western countries where easy credit is, well, easy.

Worst terror rewarded with biggest stipends

This money doesn’t come from wealthy Saudi bankers or construction moguls making secret transfers.  It doesn’t come Iranian agents paying terrorist chiefs under the table.  It’s not black money from a multi-millionaire underworld boss hiding out in Pakistan.  It’s money that comes in plain sight through official budget outlays from the Palestinian Authority to convicted terrorists.

Please explain why one cent of Western aid money should go to the Palestinian Authority while this practice is ongoing.

From Algemeiner on Oct. 16:

…Every month, according to the bylaws of the PA, the organization transfers 17 million shekels to jailed terrorists who have been convicted of first degree murder or attempted murder of Israeli civilians.

The PA also allocates funds to the families of killers, with special grants for families of killers who die while committing an act of murder.

According to the PA distribution formula, the more severe the attack conducted by the terrorist and the longer the prison sentence, the larger the stipend.

Maher al-Hashlamon Hamdi, who was convicted to two life sentences for the murder of Dalia Lemkus in a car-ramming and stabbing attack last year, started receiving monthly stipends from the PA as soon as he was arrested.

Hamdi now receives 1,400 NIS a month. These payments will increase over time, and in the future, his monthly stipend will reach no less than 10,000 shekels.

Zaid Awad, who murdered Baruch Mizrachi on Passover Eve 2014, has received stipends from the PA totaling about 30,000 shekels. These stipends followed those he received for his previous imprisonment, before he was released in the Gilad Shalita prisoner exchange.

Amad Awad and Hakim Awad, who brutally murdered five members of the Fogel family in Itamar, have so far received almost 75,000 shekels each. According to the PA’s distribution formula for murderers, they’ll continue to receive stipends that will reach 12,000 shekels a month. When calculating the total sum throughout their lives, they will each possibly receive 2.4 million shekels for the multiple murders they committed.

This PA funding is an incentive to murder…

Palestinian terror sponsors to post token bond in finance case

Clinton-appointed federal judge George Daniels is allowing two Palestinian entities to pay $10 million for now instead of the $656 million in damages that they owe to the victims of terrorism that they sponsored.  John Kerry’s lawyers at the State Department argued on behalf of the Palestinian entities, claiming that making them a pay a larger bond would impair their ability to govern.  Judge Daniels says he gave “serious consideration” to the arguments made by State’s lawyers.

In the old days, the State Department represented America’s interests to the world.  Now they seem to be acting more like a lobbyist on behalf of terror-sponsoring states (Palestinian Authority, Iran, Cuba…).

From Reuters (h/t Zadok):

U.S. judge says Palestinian Authority must post bond in terrorism case

Source: Reuters – Mon, 24 Aug 2015 16:06 GMT

By Joseph Ax

NEW YORK, Aug 24 (Reuters) – A U.S. judge ordered the Palestinian Authority and Palestine Liberation Organization on Monday to post $10 million in cash or bond while they appeal a jury’s finding that they supported militant attacks in Israel.

At a court hearing in Manhattan, U.S. District Judge George Daniels in Manhattan said the defendants must also deposit $1 million each month pending the appeal of a February jury verdict worth $655 million in favor of 10 American families.

The order came after the Obama administration took the unusual step of urging Daniels to “carefully consider” the Palestinian Authority’s financial condition, saying too high a bond could compromise its ability to function.

A collapse of the Palestinian Authority “would undermine several decades of U.S. foreign policy and add a new destabilizing factor to the region,” U.S. Deputy Secretary of State Antony Blinken said in a court filing earlier this month.

Daniels said that in fashioning his order he had given “serious consideration” to the State Department’s position, despite objections from the plaintiffs that the amount was far too low.

A federal jury in February found the PLO and the Palestinian Authority liable for six shootings and bombings in Israel between 2002 and 2004, which have been attributed to Hamas and the al-Aqsa Martyrs Brigades.

The attacks killed 33 people, including several Americans, and injured more than 450.

The lawsuit, filed in 2004 by U.S. victims and their family members, was brought under a federal statute that automatically tripled the jury’s verdict of $218.5 million to $655.5 million in damages.

A lawyer for the defendants, Mitchell Berger, said the Palestinian Authority was willing to make a $10 million upfront cash deposit and subsequent monthly payments of $1 million but warned that even those funds would severely hamper its efforts to rebuild schools and provide for needy families.

Kent Yalowitz, a lawyer for the plaintiffs, said the money was a “token amount” and criticized the Palestinian Authority, saying it made payments to terrorists in jail…

 

Money and fundamentalism: suggested reading

• The Department of Justice considers protecting the Palestinian Authority from a civil suit verdict for the victims of terrorism… more>>

• Lobbyists peddle influence on behalf of an alleged Hamas-financing charity from Qatar… more>>

• Senators propose to declassify the report on Saudi sponsorship of 9/11 hijackers… more>>

• The rebels of the Free Syrian Army have used their Western funding and support to… kidnap Westerners… more>>

Terror finance predictions for 2015

• Counter-terror attorney Nitsana Darshan-Leitner says that a jury trial will begin in January for the Sokolow v. Palestinian Liberation Organization. The case is notable in that it takes on the Palestinian Authority itself in addition to the PLO, and could set the precedent for further lawsuits to help de-fund the PA and PLO by terrorist victims’ families.
• A trial to set damages for Arab Bank PLC’s role in financing terrorism is scheduled to begin in May (h/t Sal). Arab Bank wanted to skip the trial and settle for $12 million, but U.S. District Judge Brian Cogan ruled that a trial would be a more useful starting point.
• NYU professor Maha Hosain Aziz predicts that lone wolf Islamist terrorist attacks will increase, requiring closer monitoring of social media by law enforcement (h/t Don). Money Jihad predicts that public officials will cite these increased lone wolf attacks as an excuse for why they fail to interdict terrorist funds. They will claim that self-financed attacks are harder to detect than transactions across terrorist financial networks.
• Marine Gen. Joseph Dunford says Afghan forces will be “tested” by the Taliban in 2015. As Obama’s premature withdrawal from Iraq indicated, leaving inadequate forces to combat terrorists can lead to their financial resurgence as it did with ISIS. This looks even more ominous when coupled with the Pakistani Taliban’s “stockpiling” of cash through extortion and kidnap-for-ransom schemes in 2014.
• The FC Barcelona soccer team will not renew its sponsorship deal with Qatar in 2015 over terror finance concerns.
• Finally, increased cyber-attacks and cyber-theft are always a safe bet. McAfee Labs predicts that “Small nation states and foreign terror groups will take to cyberspace to conduct warfare against their enemies” and increased ransomware attacks in 2015.

Money Jihad predictions last year for 2014 were somewhat prescient, including the projection that Narendra Modi would move against illicit finance if elected as prime minister of India, which he was and which he did, and that ransomware would develop into a larger cyber-security threat. But our predictions that Congress would declassify 28 redacted pages of its report into 9/11, and that Congress would tighten sanctions on Iran proved to be off.

PA payments to convicted terrorists will continue

The Jerusalem Post reports that young men get paid 800 shekels more for committing a terrorist act than they would have received working for Palestinian Authority security services.

Unfortunately, Israel cannot deduct the amounts paid by the Palestinian Authority to these terrorists from taxes collected on the PA’s behalf because that could violate the Oslo accord. The PA is dead set on continuing these payments, taking on the responsibility of allotting funds through their central offices after the controversy of the payments forced the closure of the PA Prison Ministry.

Just think about how ridiculous this is: Israel has to collect tax revenues on the PA’s behalf but has no control over the PA’s decision to allocate those revenues to convicted terrorists dedicated to the destruction of Israel.

Thanks to Zadok for sending this over:

MK [Member of the Knesset] Orit Struck (Bayit Yehudi) argued that the problem is that “to be a terrorist has become a preferred profession.”

Struck said that she had compared the payments received by Palestinian security prisoners in Israeli jails to the salary of Palestinian security forces and found that terrorists are paid NIS 800 more.

The phenomenon of terrorism could not be slowed until it no longer “paid” to be a terrorist and the funneling of reward money to imprisoned terrorists from the Palestinians was cut off, the Bayit Yehudi MK said.

Terrorist money news: recommended reading

• A lawsuit by 11 terror victims’ families against the Palestinian Authority—not against Hamas, Hezbollah, nor PIJ—will begin in January… more>>

• Beware that money exchanged with Turkish individuals, companies, and government agencies could end up in Hamas‘s hands… more>>

• Despite aerial bombardment, ISIS grosses €4.5 million daily… more>>

• Obama administration bows to Turkish diplomatic pressure, removes Al Qaeda financier from blacklist… more>>

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>>

Financial sleight of hand: suggested news reading

• The Palestinian Authority’s stipends to convicted terrorists are beginning to worry countries that give foreign aid.  One P.A. official’s solution?  Have the PLO pay the stipends instead through a bookkeeping trick… more>>

• The president of the Western Australia Islamic Council pleads not guilty in $8 million methamphetamine case… more>>

• Two writers tried setting up shell companies 4,000 times as research for a book. They were only asked for photo identification 20 percent of the time… more>>

• Despite the Dutch company Fokker’s voluntary disclosure of violating sanctions by shipping aircraft parts to Sudan and Iran, their scheme was sufficiently purposeful and egregious to warrant criminal prosecution… more>>

 

Terror finance & AML news: suggested reading

• The Washington Post cites the “well versed” Money Jihad blog and its analysis of the world’s richest terrorist groups when sizing up ISIS’s new found wealth after its multi-million dollar seizure of the Mosul central bank… more>>

• Given the Palestinian Authority’s new unity government with Hamas, Israel wants U.S. foreign aid to the Palestinian Authority to cease. Congress is one step ahead… more>>

• A U.S. court decision leaves the door open to testimony from a key Israeli terror finance witness in the Bank of China case… more>>

• Hers was a love for laundering drug money from Florida to Mexico, yet a judge saw fit to dismiss her indictment after she pleaded guilty to a misdemeanor. Some deterrent… more>>

• Saudi Arabia is imposing financial sanctions against Hezbollah, its supporters, and its front businesses operating in the Kingdom… more>>

 

Lessons learned from 6 big terrorist windfalls

Terror finance trials over the last ten years have frequently involved transfers by individuals of a few thousand dollars to terrorist organizations abroad. Sometimes those cases get as much attention from the news media and law enforcement as multi-million dollar cases of funding terrorism.

This tendency is unfortunate because it causes us to lose sight of the big time patrons of terrorism and their methods. Small transfers are likelier to involve individual actors, small groups, and criminal activity. High-dollar terrorist transactions are likelier to involve state sponsorship, or at least large organizations such as major charities, and sometimes corporations which are targeted for extortion or kidnapping-for-ransom schemes by militants. Consider:

• France paid $15 to $20 million to the Taliban for the 2011 release of reporters Stéphane Taponier and Hervé Ghesquière. France may have also paid a $34 million ransom to Al Qaeda in North Africa for the release of four captives last year, and an $18 million ransom just last week to release four journalists abducted by Syrian rebels.

• The Holy Land Foundation, largest Islamic “charity” in the U.S. in the early 2000s, gave $12.4 million to Hamas. George W. Bush said that the money HLF raised was “used by Hamas to recruit suicide bombers and support their families.” The leaders of HLF were found guilty of providing material support to terrorism and received sentences ranging from 15 to 65 years in federal prison.

• Qatar has spent an estimated $3 billion (or, less credibly, $5 billion) to fund Al Qaeda-linked rebels in Syria. In so doing they’ve helped turn Syria into a charnel house with over 150,000 dead since 2011.

• Carlos the Jackal received, according to different accounts, either $20 million or $50 million from the Saudi government in 1975 to release the OPEC ministers he had taken hostage. Allegedly, this money wasn’t used by Carlos himself but was pumped back toward international terrorist causes. Eventually, Carlos the Jackal was caught and sentenced to life in prison in France on separate charges.

• The Born brother heirs to the multinational Bunge and Born corporation were forced to pay a $60 million ransom to leftwing Montoneros terrorists in Argentina in 1974. Some of the money may have been kept in shadowy Argentine and Cuban banks. Mario Firmenich, mastermind of the plot, was convicted in 1987.

• The Palestinian Authority just pledged another $74 million to spend as incentives and stipends for terrorist “martyrs” and their families from their annual budget.

Several lessons should be learned from the above sampling of terrorist jackpots:

1. Don’t pay ransoms. Paying ransoms is the quickest way to fund millions of dollars worth of future terrorist attacks and to increase the likelihood of larger ransom demands down the road.

2. In cases of suspected terrorist financing, always look at both the source and the beneficiary of the funding—not just one party in isolation. With the Holy Land Foundation, we tend to focus mostly on HLF as a contributor, without examining how Hamas uses Islamic charities in the West to finance its operations. Likewise in the Taponier and Ghesquière case, what little coverage there was in English language media focused on the ransom negotiations and French foreign policy, while completely ignoring the aftermath of what the Taliban and the Baryal Qari group did with the money. We learn more from each case when we look at both sides of the equation.