Terrorist Links to Commercial Fraud in the United States

By deKieffer, Donald | Business Credit, January 2007 | Go to article overview

Terrorist Links to Commercial Fraud in the United States


deKieffer, Donald, Business Credit


With the ongoing investigation of the terrorist attacks worldwide, it is gradually becoming known how these barbaric operations are being financed. What seems to be clear is that terrorists and their sympathizers have long used commercial fraud in the United States to raise funds for their activities. Although no one is sure as to the extent of these schemes, a few examples illustrate their modus operandi.

The 1993 World Trade Center bombing was financed, in large part, by an elaborate coupon fraud and counterfeiting conspiracy. Mahmud Abouhalima, Ibrahim Abu-Musa and Radwan Ayoub established a network of stores in New York, New Jersey and Pennsylvania, which were later identified as having associations with persons identified as the WTC bombers.

Adnand Bahour, the nephew of George Habash (leader of the Palestinian Liberation Front), set up a fraudulent coupon distribution network through his grocery stores in the Hollywood, Florida area. Bahour was a kingpin in the national terror network creating money laundering and financing for the PLO. During the investigation and raid on the meeting hall of this network, more than 72 individuals from throughout the United States gathered in Hollywood to further their fraudulent coupon distribution network.

The Secret Service has reported that a massive credit card scam was being perpetrated by a group of Middle Easterners with affiliations to known terrorist groups. This scheme is a "Regulation Z" fraud or "Booster Check/Bust-out" scheme. The investigation revealed that a group of Middle Easterners, organized into cells located throughout the U.S., had applied for and received numerous credit cards. These cardholders systematically "boosted" the credit limits to the maximum amount available. Once they had established their portfolio of unsecured credit card debt, they submitted worthless checks as payment for these accounts in advance of purchases being made. In most cases, the checks were in amounts exceeding the cardholder's credit limits. Before the checks were returned as worthless, the cardholders purchased merchandise and obtained cash advances up to and sometimes in excess of the limits on the accounts. Losses to banks and merchants from these frauds were more than $4.5 million. Many of the fraudsters subsequently fled the country.

Several Islamic charities, which solicited funds and products from U.S. companies, are little more than fronts for terrorist organizations. Two examples of that would be the Wafa Humanitarian Organization and the Al Rashid Trust.

Numerous companies in the Middle East and elsewhere have been identified as agents for terrorists and/or states, which harbor terrorists such as Iraq and Libya. Several U.S. firms are known to have had transactions with them. For example:

* Iraqi Sanctions Regulations

* Tigris Trading, Inc., England

* Dominion International, England

* Bay Industries, Inc., California, USA

* Libyan Sanctions Regulations

* Corinthia Group Companies, Malta

* Oil Energy France, France

* Quality Shoes Company, Malta

Further examples of activities in the U.S. to finance terrorist activities include:

* A massive cigarette smuggling ring in Detroit, smashed by the FBI, in which 19 people were arrested. The smugglers purchased large quantities of cigarettes in low-tax North Carolina and trucked them to Detroit where they were sold in Arab-owned convenience stores. The proceeds from this operation were being shipped to Hamas and other terrorist groups.

* A group of 14 Lebanese and Syrians were convicted on dozens of charges for operating a multi-state ring, which repackaged stolen and counterfeit infant formula. Much of the money acquired by this scam simply vanished, although there are some indications it was sent to the Middle East.

* Federal investigators have linked relatives and/or associates of longtime business operators in California, New York, Michigan, Illinois, Florida and Washington to bust-outs, phony checks, cigarette tax schemes, diversion fraud, credit card fraud, counterfeit consumer products (including baby formula), insurance fraud and food stamp fraud.

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