Posted by Brian Monroe - firstname.lastname@example.org 11/01/2023
Unraveling a Complex Web: A primer on Hamas funding sources,
Iranian support, global connections and compliance concerns, considerations
By Brian Monroe
Oct. 26, 2023
The complex, well-planned and multipronged attack by designated terror group Hamas against Israel this month, killing more than 1,400 and kidnapping hundreds, surprised the country’s military intelligence complex, allies and shocked the world with its barbarism.
But for such an attack to occur – rockets to breach defenses, vehicles to storm checkpoints, paragliders to hurdle seemingly insurmountable walls and an arsenal of weapons and ammunition – it also needed funding.
Just as the Israeli Defense Forces (IDF) rained down missiles and leveled buildings in response to the attack tied to the terror group’s military infrastructure, another equally important battle is taking place in the digital realms: finding, freezing and seizing funds that could allow the group to continue the current offensive or plan a new one.
The IDF fusillades in the physical world – including sorties targeting banks and financial institutions with Hamas resources and assets – have refocused the financial crime compliance lens on how Hamas gets its funding, moves monies through formal and informal financial institutions and what regions are involved.
In this primer story, we will shed light on how Iran channels funds to these blacklisted entities, detailing their methods, red flags, and transactional alerts for fincrime compliance officers, federal investigators, and terror finance analysts, pulled from just-released congressional reports and testimonies, government alerts and ACFCS webinars and events.
In all, Iran has spent billions of dollars, according to government estimates, to arm, train and fund groups like Hamas, Hezbollah, Palestinian Islamic Jihad (PIJ) and others as proxies and fulcrum in its foreign and regional geopolitical policy goals – and to generally destabilize the Middle East and prevent peace among its warring factions.
“Not only did the Hamas attack come straight out of the Hezbollah playbook, but Iran has funded, trained, and armed both Hamas and Hezbollah for decades, investing billions of dollars over time in these groups in support of their terrorist activities,” wrote one speaker at a congressional hearing Thursday on terror funding.
“Ultimately, Iran is fundamentally complicit in Hamas and Hezbollah’s terrorist acts.”
While we will go into more detail on this later in the story, the funds Hamas earns from its state supporter, Iran, and from being an elected government agency in Gaza, is substantial.
Today, U.S. and Israeli officials estimate that Iran provides Hamas $70 million to $100 million a year, according to a congressional report.
Prior to the Hamas massacre, the group was likely able to raise $300 million – to $400 million or more a year through taxation, extortion, border control, and other means related to controlling the territory of the Gaza Strip.
Here are some immediate fincrime compliance considerations for banks, money services businesses, currency exchangers and crypto exchanges, including:
Correspondent banking connections: domestic or international banks should be reviewing, retuning, and possibly pruning, their correspondent banking connections.
Teams should review if any of their correspondents have accounts with other banks in or near high-risk regions, like Gaza, Turkey and Iran. If they don’t respond or tarry in giving details on customer populations or compliance controls, buried risks could persist. Or they could be working with terror-tinged money remitters or exchangers.
Charities and humanitarian aid: Corrupted charities have long been a Hamas – and terror finance portal writ large – for decades. In some cases, new charities pop up to support a given attack or terror group or they simply lie and say the funds would be used to help impoverished Muslims the world over.
Part of the goals of terror groups is to dupe non-radicalized followers of the Muslim faith to steal what is known as Zakat, the third pillar of Islam, a donation that Muslims consider a mandatory act within their faith, according to published descriptions.
Followers of Islam who have at least a “moderate amount of wealth are required to give 2.5 percent of their liquid assets away to charity each year.”
In other cases, terror group operatives work to infiltrate a larger, trusted charity to a position of power and financial control. The group also pilfers humanitarian aid sent to help the injured, desperate and destitute.
One compliance consideration: have any of your charity customers made changes to move more funds to individuals, companies or charities in the MENA region?
Crypto and MSBs: In just-released alerts, government agencies note that Hamas operates through a mix of co-opted banks, money remitters, currency exchanges and crypto addresses and mixing services.
The group currently or in the recent past also has operatives in major financial centers, including the U.S., U.K., U.A.E., and smaller regional hubs, including Turkey and Qatar. These operatives also work through shell companies, investment firms and real estate to fund Hamas.
The compliance consideration: how well do you know your shell companies – and not just those near terror hotspots or Gaza
When it comes to crypto, following funds across the blockchain can be difficult, requiring specialized tools and training – or a hefty investigative budget to pay for investigative work of a blockchain analytics firm, a boutique but growing industry.
However, in the aftermath of the attacks, some blockchain analytics firms engaged in proactive investigations on designated addresses tied to Hamas to find other crypto funding addresses and connections, sharing that information publicly for the benefit of virtual value exchanges and banks alike.
Dormant accounts: One key more obscure transactional tell for terror finance not highlighted in recent reports is the less well-known dangers of an account that goes dormant for several months during the year – particularly if that coincides with the stated “fighting season” of a particular terror group.
Many of these groups stage their offensives during warmer months, cooling attack patterns during the winter, depending on the region. An account that goes dormant for three to six months during the year, and it more so if it happens multiple years, could be a sign that customer is going on Jihad.
The bank could also work to get information and GPS coordinates from the customer’s phone to see if they are in a near active battle zones.
Open-Source Intelligence (OSINT): It’s impossible for banks to always be able to tell a given transaction, set of transactions or interactions among the bank and other parties, accounts and companies is for sure tied to terrorism.
That’s where OSINT can help to fill in some of the missing pieces – for good or ill.
For example, if a college-age person in a higher risk region starts getting regular wire transfers from a MENA-focused import-export company seemingly not related to the account, that could be suspicious.
But an OSINT search on social media might show that customer starting a new semester of college or posing with her father, the owner of the export business.
Conversely, if an account goes dormant in Europe, and then transactions start appearing in Turkey, Pakistan, along with the person posing in pictures with rifles and wearing masks, that could be all the evidence you need to close the account and report it to authorities.
Congress wants answers: what are we doing, what more should be done?
- Lax AML: The above scenario is given more weight of being tied to terror finance if the operation involved is suspected of having weak customer due diligence (CDD) requirements, opaque ownership, or otherwise fails to comply with anti-money laundering/combatting the financing of terrorism (AML/CFT) best practices.
- Shell games: A customer conducts transactions involving entities that are shell corporations, general “trading companies,” or other companies that have a nexus with Iran or other Iran-supported terrorist groups, such as Hizballah and Palestinian Islamic Jihad.
Charity risks and challenges
- Charity parity: A customer that is a charitable organization or nonprofit organization (NPO) solicits donations but does not appear to provide any charitable services or openly supports Hamas’s terrorist activity or operations. In some cases, these organizations may post on social media platforms or encrypted messaging apps to solicit donations, including in virtual currency.
- Fly by night: The risk of this charitable group being tied to terror is heightened if the operation is newly formed or even makes mention of the attack against Israel and the need for more funding to continue the Jihad against Israel or the West.
- Crypto OSINT: A customer that is a charitable organization or NPO receives large donations from an unknown source over a short period of time and then sends significant wire transfers or checks to other charitable organizations or NPOs or with virtual currency addresses tied to a terror group or funding campaign.
FinCEN requests financial institutions reference this alert by including the key term “FIN-2023- TFHAMAS” in SAR field 2 and the narrative to indicate a connection between the suspicious activity being reported and this alert.
When terror groups find a home: state-funded threat vectors
Part of the challenge in separating terror funding from normal private and government financial flows is the veneer of legitimacy Hamas has garnered over nearlythe past two decades as the terror group is also the duly elected government of the Gaza Strip.
In July 2007, after winning the 2006 Palestinian legislative election, Hamas became the elected government.
As well, that same year, Hamas expelled the rival party Fatah from Gaza.
This fractured the Unity Government between the Gaza Strip and the West Bank, creating two separate governments for the Occupied Palestinian Territories.
That opened the door to an entirely new revenue stream for ruling – and siphoning funds for future terror attacks against enemies, and Israel, according to Matthew Levitt, a Fromer-Wexler Fellow and Director of the Jeanette and Eli Reinhard Program on Counterterrorism and Intelligence at The Washington Institute for Near East Policy.
“Over time, since Hamas took over the Gaza Strip in 2007, the group has developed the means of taxing the local economy, diverting aid, raising funds from controlling border crossing, extorting funds from the local population, and running racketeering business frameworks,” he stated in Thursday’s congressional testimony.
“As was the case with the Islamic State, dislodging Hamas from its position as the de facto government of the Gaza Strip–where it enjoys safe haven and has been able to build raise funds, collect weapons, develop its own domestic rocket production capability, train, and ultimately carry out the October 7 massacre–is the single most effective way to deny the group the significant amounts of funding and resources.”
Prior to the Hamas massacre, the group was likely able to raise $300 million to $400 million or more a year through taxation, extortion, border control, and other means related to controlling the territory of the Gaza Strip, according to Levitt’s analysis.
The Gaza Strip’s economy was valued in 2021 at an estimated $27.8 billion. The CIA estimated in 2018 that the Hamas-ruled Gaza Strip gets 18.78% of its GDP from taxes and ‘other revenues.’
Much of this goes to running the Gaza Strip, but a significant sum funds Hamas terrorist activities.
Here are some snapshots from what Hamas earns from government taxes, fees:
- By some estimates, Hamas earns an estimated $500 million dollars per year taxing goods that enter the Gaza Strip through the Rafah (Egypt) and Kerem Shalom (Israel) crossings.
- The group earns an estimated $14 million per month in customs fees through the traffic that passes through the Salah al-Din Gate alone – just one of the seven border crossings into the Gaza Strip, though only three were open prior to October.
- United Nations agencies provided close to $4.5 billion to programs in Gaza.
- The government of Qatar has provided $1.3 billion in aid and salary support to Gaza since 2012 and the Palestinian Authority in the West Bank committed to spending $1.7 billion in 2021 in salary support to Palestinian civil servants kicked out of their jobs when Hamas took over the Gaza Strip.
As recently as October 4, Qatar was debating increasing its annual aid to the Gaza Strip, in a bid to facilitate the now sidelined Israeli-Saudi normalization deal, Levitt wrote.
Iranian support of Hamas: still going, still growing
Iranian State Sponsorship Iran’s financial and other support for Hamas increased significantly Since the group’s formation in late 1987, according to Levitt.
- Today, U.S. and Israeli officials estimate that Iran provides Hamas $70 million to $100 million a year, Levitt said in his testimony.
- Canadian intelligence cites assessments that in 2002 Iran was transferring somewhere between $3 million to $18 million a year to Hamas.
- According to a Canadian report, “in February 1999, it was reported that Palestinian police had discovered documents that attest to the transfer of $35 million to Hamas from the Iranian Intelligence Service (MOIS), money reportedly meant to finance terrorist activities against Israeli targets.”
The Hamas funding cycle: the movers, the means of transferring funds
Identifying how Hamas raises funds is “critical, but it is equally important to understand how Hamas transfers funds,” Levitt stated in his testimony to congress.
“Hamas uses the formal financial system (banks), but also money exchange houses and hawaladars, smuggling, sending people credit cards, trade-based money laundering, sending funds to third parties with no known ties to the group, and more,” he said.
Consider some examples:
- In 2019, Treasury sanctioned Muhammad Sarur, a Hamas and Hezbollah-affiliated operative who was in charge of transferring money from the IRGC-QF to the Izz al-Din al-Qassam Brigades, leveraging his position at the Lebanese Bayt al-Mal (in English: ‘house of money’), a Treasury-designated terrorist entity and Hezbollah bank.
- The Treasury designation referred to Sarur as a “middle-man” between Hamas and the IRGC-QF.
- In another example of Hamas’ exploitation of traditional banks and financial systems, in the days following the Hamas massacre Israeli authorities froze a Barclays bank account tied to Hamas fundraising efforts.
- Speaking in the aftermath of Hamas’ October 7 attack on Israel, Under Secretary of the Treasury Brian Nelson stated, “Hamas financiers have long enjoyed unimpeded access to many jurisdictions and likely their financial systems as well.”
Hamas also uses the informal financial system, like money exchange houses and hawaladars, to move funds, Levitt wrote.
- Between 2011 and 2014, Egyptian-national Mohammed Awad, aided in the transfer of tens of millions of dollars to Hamas through his money exchange business.
- In September 2019, the Treasury Department designated Turkey-based Redin Exchange, which Iran’s IRGC used to transfer millions of dollars to Hamas. Hamas, in turn, used Redin Exchange to transfer millions of dollars to the Qassam Brigades.
- The Jerusalem Post reported in June 2015 that Iran used a network of hawalas to transfer tens of millions of dollars to Hamas to fund the construction of ‘terror tunnels’ and resupply the groups’ supply of missiles.
This type of off-the-grid money transfer system is appealing to entities like Iran and its terror proxies who are looking to avoid the effects of international sanctions.
Hamas also uses “less conventional means of moving its money around, including sending people credit cards, smuggling operations, and using third person cut-outs,” Levitt stated in his testimony.
Several examples of these methodologies include:
- In September 2022, the IDF announced that it had broken up a cell of students at Birzeit University who were using credit cards to fund Hamas activities in the West Bank. The group received the funds from Hamas itself and from operatives located in Turkey.
- According to the Department of the Treasury, Sarur (noted above) coordinated with a “Hamas financial facilitator and money smuggling operations officer” to smuggle money from Iranian coffers to Hamas.
- Nassim Nasser served as a Hamas cut-out after being recruited by Hamas in 2020. He transferred money from Hamas to the Palestinian Islamic Jihad’s commander based in Jenin, who would then distribute the money to Palestinian prisoners detained in Israeli jails and the families of slain militants.
These tactics are required reading for fincrime compliance, sanctions analysts and terror investigators as these are the hybrid threat finance templates these groups will use again and again – and can be used to create new algorithms to update transaction monitoring systems.
Terror finance red flags: from used cars to terror SARs
Finding and fighting terror finance is also a perennial theme for ACFCS in events and webinars.
Here is a list of red flags, transactions and terms that could help fincrime compliance AML analysts at all levels to better uncover when companies, individuals or accounts could be tied to terror groups, including:
- Vehicle purchases – if inconsistent with customer’s past activity or customer’s business
- Funds Transfers – Many incoming or outgoing transfers through a business account, with no logical business or economic purpose; no info on the originator or recipient; multiple personal and business accounts; Foreign exchange transactions
- Transactions involving foreign currency exchanges are followed within a short time by funds transfers to higher-risk locations
- Other – International transfer from or to higher-risk locations; Insurance policy loans or policy surrender values that are subject to a substantial surrender charge;
- Multiple accounts used to funnel funds to a small number of foreign beneficiaries, both persons and businesses in high-risk locations
- Front Companies
- Charities and Non-Profits
- Example: Baitul Maal – Presence in Pakistan/Afghanistan
- ‘Hide in plain sight’ within their social media presence
- Zakat - Brotherhood members must pay between three to seven percent of their monthly income depending on their level of wealth – other groups demand similar
Courtesy: Cynthia Farahat, counterterrorism expert, Author and Writer for the Middle East Forum
Operational security and OSINT: Key Words used by Islamists:
- Fay (used by ISIS)
- Ghanimah (Spoils of war)
- Hijrah/Muhajir (Migrant, foreign fighter)
- Takfir (Infidel)
- Tamkin (Empowerment or Dominance)
- Nahda (Islamic revival)
- Mihna (Crisis – used for activation of jihad)
When dealing with companies and attempting to risk rate transactions, regions and products, fincrime compliance teams should understand the AML, sanctions and terror finance risks of dual-use goods.
These are items that can be used by civilians and military and terror groups for different ends:
- Global positioning systems satellites
- Nuclear Technology
- Chemical and Biological Tools
- Night Vision Technology
- Some Models of Drones
- Aluminum pipes with precise specifications
- Certain Kinds of Ball Bearings
These red flags, terms, transactions and items do not in and of themselves make an account suspicious, but the more of them there are, or overlapping combination of regional risks, items and terms, could be the difference between law enforcement getting the lead they need to counter an impending attack.
Regional risks rising: Hamas supporters across the real, virtual worlds
But in order to get the proper context of what is happening in a given transaction, fincrime teams need to know that Hamas has tainted tendrils snaking across the globe – not just its stronghold in Gaza.
Here is a list of countries Hamas has current or past connections through front companies, finance chiefs, laundering syndicates, funding portals, receiving funds from actual and fake charities and crypto donations, including:
Iran has been a significant supporter of Hamas, providing financial aid, weapons, and political backing. Iran’s relationship with Hamas dates back to the early 1990’s, when the group first rose to prominence in Gaza.
Iran hosted its leaders at conferences in Tehran in a bid to promote a hardline alternative to Fatah, the Palestinian party engaging in Arab-Israel peace talks at the time.
Qatar has provided financial support to Hamas and has hosted exiled Hamas leaders.
Turkey has had political and diplomatic ties with Hamas and has hosted its leadership.
Hamas has had connections with Hezbollah, a Shiite militant group based in Lebanon.
Gaza Strip and West Bank
Hamas has a strong presence in the Palestinian territories and governs the Gaza Strip.
Historically, Hamas had its headquarters in Syria, but this relationship has become strained due to the Syrian civil war.
Another state supporter of Hamas. OFAC also recently designated Sudan-based Hamas financier, Abdelbasit Hamza, who was involved in the transfer of almost $20 million to Hamas in one instance alone.
Launched on October 9, 2023, the Kuwait-based Mobilization for Palestine Campaign has reportedly raised over $8 million dollars for Gaza, noted Levitt.
Organizations supporting the campaign include the Revival of Islamic Heritage Society (RIHS), which was designated in 2008, and NGOs with links to the U.S.-sanctioned Union of Good.
Kuwait, like some other Gulf states, has had a complex relationship with Hamas. While it does not officially recognize Hamas as a terrorist organization, it has taken steps to distance itself from the group.
In recent years, Kuwait has implemented measures to restrict the financial support and fundraising activities for Hamas within its borders.
It has also expressed support for the Palestinian Authority and the Fatah movement, which is a political rival to Hamas.
Kuwait's position on Hamas has evolved, and it has sought to maintain a delicate balance between supporting the Palestinian cause and complying with international efforts to combat terrorism financing.
Saudi Arabia has generally had a strained relationship with Hamas. Saudi Arabia, like many other countries in the region, has been supportive of the Palestinian cause but has been critical of Hamas due to its ideological and political differences.
Saudi Arabia has expressed support for the Palestinian Authority, led by Fatah, which is a political rival to Hamas.
In a sign that Iranian funding to Hamas was back in full swing, in September 2015, the Treasury Department designated a dual British-Jordanian citizen based in Saudi Arabia who was coordinating the transfer of tens of millions of dollars from Iran to Saudi Arabia to fund Hamas’ Qassam Brigades and Hamas activities in Gaza, according to Levitt.
In 2015, the Treasury Department revealed that Mahir Jawad Yunis Salah–a dual UK and Jordanian citizen based in Saudi Arabia–had been serving as the leader of the Hamas Finance Committee since at least 2013, he stated in his prepared testimony.
At the time, the Treasury reported, the Hamas Finance Committee in Saudi Arabia was “the largest center of Hamas’ financial activity.”
In this capacity, Salah managed Hamas front companies in Saudi Arabia that laundered funds for Hamas and oversaw the transfer of tens of millions of dollars from Iran to Saudi Arabia, specifically to fund Hamas’ Qassam Brigades and Hamas activities in Gaza, Levitt wrote.
Another Hamas official Treasury targeted was Abu-Ubaydah al-Agha, a Saudi citizen and senior Hamas financial officer “involved in investment, funding, and money transfers for Hamas in Saudi Arabia.”
Al-Agha managed a Saudi company with branches in Sudan that invested funds and transferred funds for Hamas.
Four years later, in September 2019, the Treasury Department designated Zaher Jabarin, a Turkey based Hamas official who headed the Hamas Finance Office and managed Hamas’ annual budget “amounting to tens of millions of dollars.”
United Arab Emirates
While the UAE has designated Hamas a terror group, it has been able to acquire significant assets and investments tied to the region, according to Levitt.
By 2022, the Treasury Department publicly outed the Hamas Investment Office, which “held assets estimated to be worth more than $500 million, including companies in Sudan, Turkey, Saudi Arabia, Algeria, and the United Arab Emirates.”
The Investment Office also held assets in companies in the UAE and Algeria. At one point, Hamas planned to issue $15 million of the shares in one of its companies, Turkey-based Trend GYO, to senior officials in the investment portfolio.
And in mid-2019, Hamas portfolio managers considered selling an asset of another Hamas company, Itqan Real Estate, which was valued at $150 million.
“A significant portion” of funds transferred by Hamas companies like Sidar Company in Algeria and Itqan Real Estate JSC in the UAE, were specifically allocated to fund Hamas’ Qassam Brigades
Algeria has expressed political and ideological support for Hamas and the Palestinian cause.
The Algerian government has hosted meetings and events with Hamas representatives and has condemned Israeli actions in the Palestinian territories.
However, it's important to note that Algeria, like many countries, distinguishes between the political and military wings of Hamas, and it does not classify the entire organization as a terrorist group.
As for recent ties and designations, OFAC stated that Amer Kamal Sharif Alshawa (Alshawa), Ahmed Sadu Jahleb (Jahleb), Aiman Ahmad Al-Duwaik (al-Duwaik), and Walid Mohammed Mustafa Jadallah (Jadallah) are Hamas operatives and are part of Hamas’s investment network in Türkiye and Algeria.
Türkiye-based Alshawa is the Chief Executive Officer (CEO) for Trend GYO and has served as a board member on several Hamas investment portfolio companies.
Türkiye-based Jahleb serves as the Hamas investment portfolio secretary and coordinates various activities for Hamas-controlled companies and Hamas officials.
Algeria-based al-Duwaik is a senior Hamas investment portfolio manager who, along with Türkiye-based Jadallah, also serves on the boards of several investment portfolio companies.
In November 2018, the Treasury Department uncovered a complex “oil-for-terror” network that benefited Hamas, among others, according to Levitt.
The scheme involved the shipment of Iranian oil, with the help of Iranian operatives and Russian companies, to the Assad regime in Syria, who would then hand over the hundreds of millions of U.S. dollars in profits to the IRGC.
From there, the IRGC would distribute the funds to two of Iran’s most important proxies – Hezbollah and Hamas, he wrote.
This scheme allowed Russia to evade U.S. sanctions and Iran to fund its proxy organizations across the Middle East, Levitt stated in his testimony.
Crucial to this plot were two central actors: Hezbollah official Mohamed Qasir and Russia-based Syrian national Mohamed Alchwiki; this “oil-for-terror” network was sanctioned by the U.S. Treasury on May 25, 2022.
In the past, Hamas relied very heavily on abuse of charities, Levitt noted in his testimony.
In some cases, the givers to the charity are not unaware the funds are going to terror groups – something that happened in a high-profile case in the U.S.
At one point, the largest Muslim charity in the United States was the Holy Land Fund for Relief and Development (HLF), which was designated as a Hamas entity and several of its senior officials were convicted in criminal court of providing material support to Hamas.
In its 2018 National Strategy for Combating Terrorist and other Illicit Financing, the Treasury noted that “Hamas, which has historically raised funds in the United States through the creation of sham or fraudulent charities, continues to look to the United States as a venue for revenue generation.”
Recently, Hamas’ abuse of charity and other unconventional financial networks has been on the rise in recent years in the Middle East and elsewhere.
Mohammad El Halabi was a Palestinian aid worker and Gaza manager for World Vision International, headquartered the U.K.
In August 2022 he was sentenced to twelve years in prison for diverting $50 million of World Vision’s budget and large quantities of construction materials to Hamas over a period of ten years. Authorities arrested Halabi at the Erez Crossing in June 2016.
The French NGO Humani’Terre organized a fundraising campaign after the events of October 7, 2023 on its website and social media accounts, Levitt noted in his congressional testimony.
The group appears to be tied to an organization sanctioned by the U.S. in 2003 called Comité de Bienfaisance et de Secours aux Palestiniens (CBSP), which utilized the same address and phone number as Humani’Terre.
CBSP was sanctioned by the U.S. in 2003 and called a “primary [fundraiser] for Hamas in France.” Huamni’Terre collects money through mosques and other Islamic institutions, then funnels that money to Hamas through various sub-organizations.
An audit conducted by the Canadian Revenue Agency cited concerns over the Muslim Association of Canada’s (MAC) ties to Hamas and the Egyptian Muslim Brotherhood, resulting in MAC losing its official charity status, noted Levitt in his statement to Congress.
In some cases, news outlets supporting Palestine or hamas will announced fundraising campaigns on mainstream platforms like Instagram, Telegram, and Ko-Fi, which happened just hours after the attack against Israel, he wrote.
The campaign “solicited donations in U.S. dollars, Euros, and various cryptocurrencies that passed through a variety of American and European financial institutions, he said, adding that other new “crowdsourcing campaigns” designed to funnel money to Hamas sprung up.
In his research, he noted pro-Hamas crowdfunding sites set up by the U.K.-based Al-Qureshi Executives, the U.K. and Turkey-based Al Khair Foundation, and Kudus Vakfi, an NGO based in Turkey and run by senior leadership of the U.S.-sanctioned Al Aqsa Foundation.
Duality of crypto: virtual assets giveth, virtual assets taketh away
While understanding the risk of these regions is important to quantify country and transaction risk, terror groups don’t have to leave their area of operations in many instances using the power of crypto – and they regularly try to solicit support through virtual value.
But the days of crypto being an anonymous, impenetrable, global funds transfer gateway for criminals is long gone, as Hamas and other terror groups found out the hard way a few years go.
in August 2020, the US Department of Justice announced an operation that led to the “largest seizure of terrorists’ cryptocurrency account ever” and the dismantling of three different “cyber-enabled” terror finance campaigns by Hamas’ Qassam Brigades, al-Qaeda, and Islamic State, according to Levitt.
Recently, analysts from the National Counterterrorism Center (NCTC) reported that “Since 2015, we have noted increased sophistication in the methods terrorist groups are using, particularly the adoption of cryptocurrencies.”
Hamas’ al Qassam Brigades posted a call online for Bitcoin donations to fund the group’s terrorist activities.
Hamas “boasted that bitcoin donations were untraceable and would be used for violent causes.”
Their websites offered video instruction on how to anonymously make donations, in part by using “bitcoin addresses generated for each individual donor,” the Department of Justice explained, as noted in congressional testimony.
Unfortunately, for the donors, “these donations were not, in fact, anonymous,” Levitt wrote.
As a result, federal agents tracked and seized 150 cryptocurrency accounts and executed criminal search warrants for US-based subjects who donated to the Hamas fundraising campaign.
They then “seized the actual infrastructure of the Hamas websites, and proceeded to run them covertly such that when people made donations intended for Hamas, the funds actually went to bitcoin wallets controlled by United States authorities,” according to congressional testimony.
The future of fighting terror financing must change, from focusing just on funds to all terror resources, Levitt stated.
In this sense, resourcing should be viewed as a multi-layered process involving a broad selection of both seemingly mundane and dangerous items from a variety of sources to many recipients through multiple channels for different uses.
As such, “terrorist procurement often relies on networks of intermediaries, including those with no relation to the terrorist group,” he said, a challenge for analysts trying to put the pieces together and see the interrelated whole.
But that could be the chink in the armor.
In this sense, such networks are “especially vulnerable to disruption through exposure because they must maintain an air of legitimacy, especially in order to obtain items that could be dual use,” Levitt wrote.
“Whereas terrorist financing is traditionally characterized as a linear process that runs from collection to transmission and use of funds, the model suggests that the terrorist resourcing trail is a broad river with many branching tributaries,” he said.
See What Certified Financial Crime Specialists Are Saying
"The CFCS tests the skills necessary to fight financial crime. It's comprehensive. Passing it should be considered a mark of high achievement, distinguishing qualified experts in this growing specialty area."
KENNETH E. BARDEN
"It's a vigorous exam. Anyone passing it should have a great sense of achievement."
(CFCS, Official Superior
de Cumplimiento Cidel
Bank & Trust Inc. Nueva York)
"The exam tests one's ability to apply concepts in practical scenarios. Passing it can be a great asset for professionals in the converging disciplines of financial crime."
(CFCS, Royal Band of
"The Exam is far-reaching. I love that the questions are scenario based. I recommend it to anyone in the financial crime detection and prevention profession."
(CFCS, CAMS Lead Compliance
Trainer, FINRA, Member Regulation
Training, Washington, DC)
"This certification comes at a very ripe time. Professionals can no longer get away with having siloed knowledge. Compliance is all-encompassing and enterprise-driven."
CFCS, CAMS, CFE, CSAR
Director, Global Risk
& Investigation Practice
FTI Consulting, Los Angeles