Posted on 09/22/2002 8:47:25 AM PDT by Jean S
Federal investigators believe Western New York is a source of money - some suspect millions of dollars - for al-Qaida operations overseas.
Six agents from the Internal Revenue Service's Criminal Investigations unit already were working here, trying to track money going from this region to al-Qaida, several weeks before six Lackawanna men were arrested a week ago on charges of helping the terrorist organization.
"It's happening, but how much, I don't know," Peter J. Smith, special agent in charge of the U.S. Customs Service's Office of Investigations in Buffalo, said of local money he believes is being diverted to Osama bin Laden's terrorist network.
The IRS is so convinced of local money being diverted to al-Qaida that it sent its "premier financial investigators" to try to the trail of local money, said Steven Pregozen, special agent in charge of the Buffalo office of the IRS unit.
"We know they're out there, and we're concerned," Pregozen said of local sources sending to terrorists.
There's no proof that the alleged "Buffalo cell" raised money for al-Qaida, but a federal prosecutor has alleged that some of the suspects seemed to have secret sources of money. One defendant, Shafal A. Mosed, who said he's too poor to hire a lawyer, is alleged to have recently blown about $89,000 at Casino Niagara.
The federal government's suspicions - and at this point that's all they are - are based in part on a cigarette smuggling scheme that was broken up in 1999. Several local Arab-Americans, including some of Yemeni descent, were charged with funneling more than $1 million in illegal proceeds to Yemen as part of that scheme.
Prosecutors say the defendants in the tobacco money scheme used wire transfers to move the money from a Buffalo bank to three foreign banks - Yemen Commercial Bank, Arab Jordan Bank and Banque Indosuez Switzerland.
The money trail ended because the foreign banks refused to cooperate. While investigators admit there's no proof that money went to terrorist groups, the case has raised suspicions about Western New York as a source of funding for terrorism.
The government's claim that cigarette smuggling might be a source of terrorism financing is not unique to Buffalo.
In North Carolina last week, a federal grand jury indicted three people on charges of conspiring to provide cash and other materials to Hezbollah, an Islamic militant group. The three are accused of diverting proceeds from cigarette smuggling to the Lebanon-based organization.
Stepping up efforts
Tracking the flow of money from Western New York to groups like al-Qaida is complex, time-consuming and particularly difficult given the maze of obstacles investigators face. Those hurdles range from shell companies and offshore banking centers to the elementary, paperless exchange systems that exist in many Muslim countries.
Despite those obstacles, investigators here and across the world are stepping up their efforts at following the money trail. They know one of the best ways to shut down al-Qaida for good is to eliminate its sources of funding.
"President Bush said it best: We have to starve them," said Rachel Ehrenfeld, director of the Center for International Integrity and an expert on international money laundering. "If the United States can stop the money trail, we can stop terrorism."
The Bush administration, as part of its quest to follow that trail, announced the creation of a task force Thursday to improve regulations for catching terrorists and other criminals involved in money laundering.
The task force, which will be housed within the Treasury Department, will work with financial regulators and law enforcement in trying to cut off terrorists from their financing.
The administration's actions are viewed, in part, as a response to criticism that the United States was unprepared to follow the global money trail. Ehrenfeld said the government looked the other way when it came to certain banks with suspected ties to terrorism.
All that changed on Sept. 11, 2001, when the country found itself at war with a well-financed enemy. Almost overnight, the government began searching for ways to find al-Qaida's backers.
Locally, the efforts range from the Joint Terrorism Task Force, formed shortly after the 9/11 attacks, to a new U.S. Customs initiative called Operation Green Quest. The effort, which includes increased outbound bridge inspections, is designed to stop the illegal flow of money out of the United States.
"Those are our marching orders," said Smith of the U.S. Customs Service's Office of Investigations in Buffalo. "We're asking more questions about money and looking for individuals who may be transporting money."
Proximity to Canada
So far, customs has seized about $2 million in illegal funds, but none of it has been traced to terrorist groups.
No one knows for certain how much local money, if any, is flowing to terrorist groups in the Middle East. But the allegation that Lackawanna was home to a sleeper cell has added to the belief that Western New York may be a source of money for terrorism.
Ehrenfeld said the other reason is Buffalo's proximity to Canada and the opportunities a border city provides for smuggling money out of the country. She quickly added that Buffalo is not alone.
"It's widespread," she said of the money flowing from the United States to al-Qaida and other groups. "They're paying their way with U.S. dollars."
In the year since terrorists attacked New York City and Washington, D.C., experts have identified a series of funding sources. They range from Osama bin Laden's personal wealth to sympathetic Muslims both here and abroad.
Ehrenfeld said she thinks al-Qaida's primary money source is state-sponsored funding coming directly from countries such as Iraq.
When it comes to funds flowing from the United States, investigators point to drug trafficking, cigarette smuggling and other illegal activities as the primary source of funding for al-Qaida.
For that reason alone, investigators aggressively tracked the more than $1 million they claim went from Western New York to Yemen as part of a cigarette smuggling scheme.
Supporting their families
Prosecutors would not comment on the case, but a lawyer for one of the defendants, Mohammad Kaid of Lackawanna, dismissed the government's claims as unfounded. Court papers portray Kaid, one of more than 30 defendants in the case, as a leader in the scheme.
"It sounds nefarious, but on the other hand, a lot of people send money abroad to support their families," said Leonard F. Walentynowicz, Kaid's lawyer. "If my guy is the money guy, the kingmaker, why is he a pauper who has assigned counsel?"
Walentynowicz said the government has made a big deal about a large house in Yemen owned by Kaid's family.
"They claim it's a mansion," he said. "The reason it's large is because the practice in that part of the world is for families to live together. Besides, the house doesn't belong to him. It belongs to his family."
Members of the local Muslim community, while supportive of the government's fight against terrorism, said carrying or sending large amounts of cash back home is not unusual, because checking accounts are uncommon in Yemen and other Middle Eastern countries.
"If you have a sister who doesn't have much of an income, you give her a little something," said Hussan Muhsen, 52, of Bauder Avenue in Lackawanna.
e-mail: pfairbanks@buffnews.com
We all know that the liberal attack on cigarettes is insane. When you slap on a tax of a couple of dollars per pack, you are just inviting smugglers to move in. Didn't we learn that lesson during Prohibition? Prohibition enabled organized crime to gain power in this country, and no doubt the Democrats' hypocritical attack on tobacco will accomplish something similar.
The worst effect of Prohibition was to empower the Mafia. Now these left-wing nuts are trying to empower Islamic terrorists.
Amazing, Now they use the existence of the public defender as an argument for innocence.
Interesting if true. Using a casino is a good way to "launder" relatively small amounts of money. You
(a) Buy some chips with dirty money.
(b) Play, lose a little.
(c) Cash in chips, get clean money.
(d) Repeat.
The casino makes a profit on the "transaction", and you walk out with clean money.
The ultimate irony: We have been paying for our own murder. Think how the islamists must enjoy the joke.
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