Case raises questions on money flowBy JEFF HARRINGTON, Times Staff Writer
© St. Petersburg Times
published February 22, 2003
A $103,000 wire transfer from the United States to the Beirut bank account of the treasurer of a notorious terrorist organization. Thousands of dollars wired from a Bank of America account to a bank in Tel Aviv, then distributed to the spouses of jailed Palestinian terrorists.
The federal case against Sami Al-Arian offers some telling anecdotes about how the suspended University of South Florida professor and accomplices allegedly directed the flow of funds to aid suicide bombings and other terrorist causes in the Middle East.
Predecessors of Florida's two largest banks, Bank of America and Wachovia, and USF's federal credit union were used as unwitting dupes by terrorists with the Palestinian Islamic Jihad, the 120-page indictment suggests.
Could those financial institutions, in the pre-Sept. 11 calm of a decade ago, have done more to spot the red flags?
To Charles Intriago, a former federal prosecutor in Miami who now publishes a newsletter about money laundering, Thursday's indictment of Al-Arian is also an indictment against the nation's financial monitoring system.
"It's confirmation of the truism that has cropped up after Sept. 11: The transactions that are conducted by people allegedly financing terrorism are under the radar screen," he said.
Intriago, who plans to dissect the Al-Arian case in his newsletter and Web site (www.moneylaundering.com), said the government's financial cops are geared toward stopping large pools of drug money from being passed through. But when a supposedly legitimate fundraising organization is collecting smaller amounts of money for unsavory purposes, it's harder to detect.
"The drug guy's money is dirty money going clean, and this is clean money going bad," Intriago said. "That's what makes it more difficult."
Under federal law, banks are required to report to regulators cash deposits in excess of $10,000 and any "suspicious activity," though that's vaguely defined. Federal regulators urge banks to notify them if a customer has an unusual wire transfer, moves a large sum of money in and out of an account in one day or sends money to an offshore account on the United States' list of countries known to cater to money launderers.
For wire transfers of $3,000 or more, institutions need to keep detailed records, but there is no requirement to report them to authorities.
Neither Bank of America nor Wachovia would confirm the transactions detailed in the Al-Arian case, citing privacy rules. Tom Ness, president and CEO of USF Federal Credit Union, said he could not confirm whether Al-Arian or his deported brother-in-law, Mazen Al-Najjar, have ever been credit union members.
He acknowledged, however, that a large transfer of funds from a customer's credit union account to a U.S. bank, such as an alleged Al-Najjar transfer to Barnett Banks, a Bank of America predecessor, would not have raised suspicion.
"We have people that do that all the time," he said, to pay for a house.
It's not clear whether the banks notified regulators about any of the transactions in the indictment. Financial experts and regulators offered several reasons why such transactions could easily have gone undetected:
-- Many were for relatively small amounts.
-- Much of the alleged money shuffling occurred between 1993 and 1996, before anti-money laundering rules were tightened in 1996 and again with last year's Patriot Act. Regulators also are now providing financial institutions with detailed lists of suspicious individuals, culled from multiple intelligence sources. Still, Ness, who has been with the USF credit union more than three years, said he believes his institution has never had to report anybody based on the list.
-- Al-Arian planned other ways to remain undetected, according to the indictment. Prosecutors said he discussed collecting money from a group of donors and giving it to one individual who would then donate it as a charitable item, receiving a tax writeoff. The idea, the indictment said, was to then give some of the money from the tax writeoff to Al-Arian for the cause.
Kenneth Bell, a federal prosecutor in North Carolina who last year successfully prosecuted a group providing funding to the terrorist organization Hezbollah, said it's not surprising that Al-Arian and his associates apparently didn't raise suspicion at financial institutions.
A wire transfer of more than $100,000 is not necessarily a red flag even in today's wary climate, he said.
"I'm sure there are hundreds of millions of dollars in wire transfers out in the world every day," Bell said. "There's nothing inherently suspicious about an international wire transfer."
-- Jeff Harrington can be reached at email@example.com or (813) 226-3407.
The money trail
Federal prosecutors cite in their indictment dozens of examples of how suspended University of South Florida professor Sami Al-Arian and others allegedly raised money and moved it around in support of Palestinian suicide bombings in Israel. Al-Arian, who founded the World Islam and Studies Enterprise at USF, was portrayed as the North American leader and financial brains for the Palestinian Islamic Jihad, a group responsible for numerous terrorist attacks.
Among the transactions and financial dealings alleged in the indictment:
Sept. 18, 1992: "Unindicted co-conspirator twelve," who is believed to be Mazen Al-Najjar, Al-Arian's brother-in-law, wrote a check for $99,500 from his USF Federal Credit Union to his account at Barnett Banks. On Sept. 29, 1992, he transferred $98,500 from his Barnett bank account to Barnett Securities.
June 1 1993: Al-Arian transferred $5,000 from a USF Federal Credit Union bank account to his account at NCNB bank. Then he made four separate $2,000 wire transfers to his account at Bank Leumi in Tel Aviv, Israel. From that account two days later, he put $1,944 each into four accounts at a West Bank bank listed under the name of spouses of terrorists serving sentences in Israeli jails.
Feb. 7, 1994: "Unindicted co-conspirator twelve" sent a wire transfer of $102,872 from an undisclosed location to Muhammed Tasir Hassan Al-Khatib, the Jihad treasurer, at a branch of the Arab Bank in Beirut, Lebanon. Feb. 23, 1994: Al-Arian unsuccessfully tried to reopen a NationsBank account he had held jointly with Al-Khatib. He asked the bank to send Al-Khatib's signature card to him.
April 22, 1994: Fathi Shiqaqi, a Jihad organizer, wire transferred $19,984 to a bank account of Sameeh Hammoudeh, a USF teaching assistant, at First Union National Bank (now Wachovia) via a bank in Beirut that used the Bank of New York as its U.S. correspondent.
May 4, 1994: Hammoudeh sent $16,000 via check from his bank account at First Union to a banking account for WISE at NationsBank in Tampa.
Feb. 28, 1995: Hammoudeh wire transferred $3,190 from his First Union account to an Arab Bank account in Nablus, Israel.
April 17,1998: Al-Arian expressed concerns about a planned transfer from a Chase Manhattan bank to a bank in Egypt.
July 20, 1999: Al-Arian talked with the USF Credit Union and directed it to place $1,600 into his checking account from a $8,984 wire transfer that had been deposited in his account on July 6, 1999.
May 17, 2000: Hammoudeh called a relative overseas and spoke about $15,000 that Hammoudeh would be sending. He asked the relative to find someone who had an account in the United States in which he could deposit the funds. Then the relative could collect from that person in the Middle East.
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