Terror financesCampaign against terrorist financial networks complicated, demanding

The U.S. Attorney for the Southern District of New York and the Drug Enforcement Administration (DEA) last week announced the seizure of $150 million in cash from “entities linked to Hizballah,” including the now-defunct Lebanese Canadian Bank (LCB). The announcement may seem like  a big win in the war on terror, but it is merely a small dent as terrorist organizations use a myriad of tactics to move their money around undetected.

The Minyanville reports that the case above stems from a civil money laundering and forfeiture complaint filed by the U.S. government in December, involving a massive, “international scheme” that laundered then moved massive amounts of cash through legitimate businesses to terrorist organizations in the Middle East.

Victor Comras, an authority on terrorist financing told theMinyanville. “Credit card fraud, petty crime, the drug trade — those have been the primary ways money is raised for terrorist organizations. They’re also very good at it, very imaginative. If you can think of a scheme, they have too.” 

According to a paper Comras wrote in 2005, “One of the groups financing al Qaeda, the Themar al-Mubaraka company grew sesame, peanuts and white corn for the group on a farm in Ed Damazin, Sudan.”

Now these terrorist groups have found another way to make and launder money…Used cars.

In the documents filed in the case, at least $329 million dollars were transferred by wire from LCB and other banks to the United States to purchase used cars which were shipped to West Africa between 2007 and 2011.

The money to buy the cars was gained through drug sales. After the cars were sold overseas, the profits “were funneled to Lebanon through Hiznallah-linked money laundering channels.”

After that the rest of the operation was easy. From the civil complaint, obtained via the U.S. Attorney’s Office:

A network of money couriers controlled by Oussama Salhab, an alleged Hezbollah operative living in Togo, transported tens of millions of dollars and euros from Benin to Lebanon through Togo and Ghana. Salhab and his relatives also own and control Cybamar Swiss GMBH, LCC (“Cybamar”), a transportation company based in Michigan that was frequently used to ship cars to West Africa, as well as other entities involved in the scheme. Cash transported from West Africa was often received at the Beirut airport, where Hezbollah security safeguarded its passage to its final destination.

The United States may consider some of these groups to be terrorists, but in other countries they are seen as regular businessmen, according to Comras.

“When you’re dealing with certain groups, there is a consensus worldwide that they are terrorists,” Comras said to the Minyanville. “Al Qaeda is designated by the United Nations as a terrorist organization. But when you talk about Hizballah or Hamas, things become difficult, as many countries don’t consider them terrorists. They do business with them; to them, that’s OK.”

“You go out into the wide world and funding is still very much available for al Qaeda, the Taliban, Hezbollah, Hamas,” he points out. “In Saudi Arabia, funding for Hamas is still quite legal and quite active. In Iran, Syria, and many other countries, funding flows to Hezbollah unimpeded. We can see how well the Taliban has been able to arm itself and become a major national security issue.”

Even some countries which do see al Qaeda and others as terrorist organizations, may not have the money or resources to stop these organizations.

“One one end, you’ve got countries like Saudi Arabia that provide bounties to the families of suicide bombers,” Comras says. “On the other, you have countries that just lack the resources or structures to really enforce these things. That’s one of the reasons why West Africa often appears in these situations; their systems aren’t really capable of monitoring these kinds of activities.”

The seizure of funds referred to in the first paragraph is a step in the right direction, but experts say that attacking terrorist financing require a coordinated and sustained campaign against terrorist organizations and their financing. To make such a campaign feasible U.S. banks should be in a better position than where they are now, barely able to track terrorist activity.

In July, the Senate’s Permanent Subcommittee on Investigations accused HSBC of failing to review thousands of suspicious transactions over the past ten years. In June an FBI agent’s sworn statement alleged that Mexican drug cartel proceeds were being laundered through Bank of America. In April U.S. regulators accused Citigroup of improperly establishing and maintaining anti-money laundering programs. Over the past two years, Wachovia paid $160 million to settle Justice Department claims that the bank enabled a Mexican cartel to launder drug money through its accounts.