Investigators advised to use ‘Al Capone’ fraud tactics to penetrate terrorist cells

Law enforcement should devote more resources to investigating extremist suspects for minor fraud to penetrate and disrupt terrorist cells, new research advises.

The tactic of pinpointing terrorist targets through minor financial crimes, championed in the US, is under-used elsewhere, a research paper published on Thursday said.

European-based terrorists have continued to exploit generous welfare provisions across the continent to help prepare for attacks but high-volume financial crimes remain a low priority for hard-pressed police forces.

The US-led financial "War on Terrorism" that followed the September 11 attacks on America used sanctions, asset freezing and other measures to limit funding to groups such as Al Qaeda.

Terrorist groups and lone-wolf extremists have been forced to turn to alternative methods such as fraud to finance and plan attacks.

But investigation agencies have failed to share financial information to keep up with the threat, said Prof Nicholas Ryder, a UK terrorist funding expert.

Immigration offences, identity theft, credit card scams, and tax and benefit fraud have all been used by extremists to prepare the ground for attacks, Prof Ryder said in Fraud-Enabled Terrorism Financing: A Neglected Dossier.

Scammers have included Amedy Coulibaly, one of the key players in the terrorist attacks in Paris in January 2015, who secured a €6,000 ($7,000) loan a month earlier using a fraudulent pay slip.

Suicide bomber Salman Abedi, who killed 22 people in Manchester, England, in a 2017 attack, used his mother’s credit card and student loans to help finance the bombing.

His mother continued to claim housing and other benefits from the British state despite moving to Libya in 2016.

The problem is not new. The 2005 terrorist attacks on the London transport network, which killed 52 people, were financed largely through loan fraud by the ringleader of the suicide bombings, an official report said.

Tax authorities also reportedly linked a major fraud to one of the terrorists who detonated a bomb two years later. But the officials failed to alert police or security services.

Prof Ryder said that a review of UK terrorism-related prosecutions between 2016 and 2019 suggested that evidence from financial investigations continued to be missed.

Of 114 terrorism-related prosecutions, only three were related to fraud.

“Fraud continues to be used to support terrorist groups across Europe," the report said.

"Terrorists have exploited the benefits afforded by the EU to its citizens, including access to credit, manipulated welfare payments and exposed loopholes in the funding of higher education.

“By contrast, in the US, law enforcement agencies have used fraud investigations, arrests and prosecutions to disrupt terrorists.”

The US has had success in tackling organised crime using a strategy that led to the downfall of infamous US gangster, Al Capone.

In 1931, Capone was convicted and jailed for tax evasion, only after traditional law enforcement techniques had failed.

The convictions of four Somali immigrants in 2013 for sending money to Al Shabab to finance terrorist attacks highlighted the US approach, said Prof Ryder.

US law enforcement intercepted dozens of calls between a member of the immigrant group and one of Al Shabab’s most prominent leaders about sending money.

Prosecutors said the case proved efforts to “detect and disrupt terrorist financing. and prevent the violence that goes along with it, has paid off”.

Prof Ryder said the UK government had identified a problem but failed to deal with it.

“The UK has a long history of treating fraud as an afterthought,” he said. “If you look at the US there is a more joined-up approach. We’re missing a trick here in the UK.”

The National reported on Thursday how ISIS is seeking to exploit the gems trade and elephant poaching to finance its operations.