Hot on the IS money trail
Your hard-earned money may just be financing terrorism activities, experts warn.
MALAYSIANS are a generous lot. They are always willing to donate if it is for a good cause. But sometimes, they can be too trusting. And that trust can be misused and even manipulated.
This is true when it comes to financing terrorism activities.
Police investigations into terrorism financing have found a number of Malaysians have been duped into donating money for Islamic State (IS) militants, Deputy Supt Foo Wei Min said.
“Donors were not informed of the purpose of the money they donated. They were just told the donation is to help Palestinians and poor Muslim families. And Malaysians are very sympathetic, so they give.
“We saw a lot of donations coming in, without people knowing that their money was being used to help the terrorist fighters and their families,’’ he said at the international conference on Financial Crime and Terrorism Financing 2016.
DSP Foo said these appeals for donations are often made through social media like Facebook and Twitter, with some even using so-called charitable or religious organisations as a front.
“Because they say they are doing it for charitable purposes, they enjoy public trust,” he said.
With social media, the message gets out very quickly and because it gets shared, it spreads far and wide.
In today’s world of convenient banking, people can transfer money instantaneously to the account numbers given through Internet banking or the ATM.
DSP Foo said that money is then channelled to Malaysians who are fighting for IS in Syria and Iraq, or used to support widows of militants who died while fighting or to meet the daily needs of the families of these fighters who are away. He said these funds are also used to buy materials to build explosives to carry out attacks.
And it is not easy to track terrorism financing.
For one thing, it does not involve the movement of huge sums of money.
DSP Foo said terrorism financing here actually involves the movement of “small amounts of money in large frequency”, mostly from people nationwide donating small sums of money.
He said the money is “clean money” because it comes from legitimate source or businesses.
“So the crime happens only when the funds fall into the hands of the terrorist group. If it doesn’t, then it is not an offence because it is clean money.”
So for the police, what this means is a whole lot of tracking and intelligence-gathering to stay ahead.
DSP Foo said police have investigated 18 cases of IS terrorism financing and they have filed charges against 12 cases so far.
They have also been able to get convictions.
In February, 37-year-old chef Mohamed Fauzi Misrak and 39-year-old financial consultant Rouhami Abdul Rahim received three-year jail sentences for soliciting and collecting funds for IS militants. Then in June, the Court of Appeal enhanced their sentences to 15 years.
DSP Foo said Fauzi was an IS fighter in Syria for nine months before returning to Malaysia. He then allowed his bank account to be used to collect donations for other IS fighters and for money from his account to be withdrawn to help sustain a few Malaysian IS fighters in Syria.
He said Rouhami was the mastermind who went on Twitter and Facebook to get people to donate to the account.
One interesting fact DSP Foo disclosed at the conference was that in the course of investigations, the police found that there were actually “red flags” which the banks had failed to pick up on.
“For e-banking, we found some donors had stated the reason for the money transfer as ‘jihad’ and some as infaq (giving to please Allah without expecting anything in return).
“These are things that bankers should be aware of. Banks must assist the police with terrorism financing investigations,’’ he said, adding that most of the cases they have acted upon was due to intelligence gathering.
DSP Foo said the police are using a number of acts like the Prevention of Terrorism Act (Pota), Prevention of Crime Act (Poca), Security Offences (Special Measures) Act as well Section 130 of the Penal Code against the militants and supporters of terrorist activities.
He said under Section 130 of the Penal Code, if the act of terrorism causes death, then the perpetrator can be meted out a death penalty but if it does not cause death then it could be a life sentence.
On Thursday, 29-year-old Mohamed Danny Mohamed Jedi, the brother of most-wanted Malaysian IS terrorist Mohamad Wanndy Mohamed Jedi, was jailed for four years for allowing his bank account to be used to finance terrorism.
Taking instructions from his terrorist brother, Danny allowed RM12,130 to be deposited into his account. He (Danny) then withdrew RM10,000 which he sent in smaller amounts through Western Union to individuals in Iraq before he got caught.
Another speaker at the conference, Prof Rohan Gunaratna said one of the biggest mistakes the Malaysia government made was to abolish the Internal Security Act (ISA).
He said several pieces of legislation were subsequently brought in to replace the repealed ISA “but nothing can beat the ISA in fighting terrorism”.
“Now, you have to invest a huge amount of resources to get the evidence and that takes time. Some terrorists have been even acquitted.
“I was in a Malaysian court a week ago, and a judge released a female terrorist suspect because of this.
“So today, the fight against terrorism in Malaysia is very tough and hard because you made the mistake of getting rid of a very important piece of legislation (ISA),” said Prof Gunaratna who is head of the International Centre for Political Violence and Terrorism Research (ICPVTR) of the S. Rajaratnam School of International Studies (RSIS) in Singapore and who is sometimes called upon as an expert witness in court cases here involving terrorists.
Prof Gunaratna pointed out that terrorists are exploiting the existing banking system to finance their terrorism activities and said that banks should take measures to make it hard for them to do this.
He said Malaysia was fortunate that its Special Branch has been very effective in preventing attacks here so far.
“But terrorists are starting to use encryption. As long as there is intelligence, police agencies can act. But if there is no intelligence it is going to be very difficult. That is why it is very important for everyone to work together.
“Unless you all work together you can’t win the fight.”
For him, the fact that 239 Malaysians have been arrested for joining and supporting the IS is a very significant number.
He said terrorist financing can be detected in four stages – during the collection, movement, storage and dispersal stages.
“You have to develop indicators and look for clues. Don’t look for big money.
“Terrorists are poor. They don’t have a lot of money. Don’t make the mistake of looking for large amounts of money moving through Malaysia.
“I’ve never seen terrorists moving large amounts of money through Malaysia,” he said.
Prof Gunaratna also said Islamic scholars and religious organisation like Jakim must stand up to the threat and assert themselves more to get the message on the ground that the IS is not an Islamic organisation nor is it promoting Islam.
He said IS terrorists were adept at confusing people by using certain Islamic concepts and terminologies such as ghanimah (booty after fighting the enemy) to justify their way
Appeals for donations are often made through social media like Facebook and Twitter, with some even using so-called charitable or religious organisations as a front. Because they say they are doing it for charitable purposes, they enjoy public trust. Deputy Supt Foo Wei Min
of fund-raising.
“It is so important for Muslim scholars here to stand up and say that what the IS is doing is not according to Islamic practices, traditions and concepts. That task must be given to the religious bodies. This has not been done.’’
Sharing his experience at the conference, US Justice department prosecutor John Shipley said it does not take a lot of money for lone wolves to carry out terror attacks and inflict a lot of damage.
He said it might be a challenge but banks should take measures to make sure they are not being used for terrorism financing.
He cited the case of Hafiz Khan, an immigrant to the United States who collected money and transferred up to US$100,000 (RM415,100) to Pakistan through a bank over a period of time for the use of militants there.
“What is important is that he wired small amounts to avoid suspicion. This was done to avoid scrutiny and prevent potential detention. That US$100,000 can buy a tremendous amount of weapons where it is going,” he said. For his crime, Hafiz received a 25-year jail sentence.
Shipley also pointed out that banks should be aware that sometimes money transfers are done by terrorists and their supporters at the smaller branches and outposts where there is not much tracking.
“Banks are the first line of defence against terror-financing, so effective monitoring and global-thinking is required. You have to know what to look for.”
In some countries, a bank could be liable for civil damages for the deaths of individuals in a terror attack if the bank was used by an individual known for violence and there was a wilful attention by the bank to details and “failing to know your customer”.
But the challenges in tackling terrorism financing is huge. There are ways to circumvent the conventional banking system in transferring funds.
Shipley said the younger generation use prepaid cards, virtual currency or other internet payment sources.
He said tech-savyy 17-year-old American Ali Shukri Amin is now serving an 11-year jail sentence for instructing IS supporters how to use Bitcoin, a virtual currency, to mask their transfer of funds to the IS.
Ali also encouraged his followers on Twitter to donate to the IS via bitcoin and helped recruit another teen to fight in Syria.
Such are some of the tough challenges ahead in the fight against terrorism.
Banks are the first line of defence against terror-financing. John Shipley