Note: The Deputy Director may deviate from prepared
Good morning. It’s an honor to be here today
to talk about terrorist financing and how it affects the law
enforcement business and the banking business.
Today I want to give you an overview of terrorist financing
and walk you through the FBI’s process of conducting
terrorist financing investigations. And finally, I’d
like to talk about how important all of you are to the FBI’s
* * *
Money is the lifeblood of terrorism. Without it, terrorists
cannot train, plan, communicate, buy equipment, or execute
their attacks. But with it, they can do immeasurable
damage. And so they are always looking for ways to fly
below the radar, hoping to stay unnoticed and unsuspected
while they turn their plans into a reality.
We learned this lesson the hard way on September 11, 2001.
The 9/11 hijackers wanted to remain unnoticed, and their financial
transactions did fly below our radars. It wasn’t
until after the attacks—when we began backtracking through
their finances—that red flags went up.
We discovered that the hijackers used the formal banking
system freely and even shared access to accounts. We
were able to track their everyday purchases at places like
Wal-Mart and their travels throughout the country. Things
that might not have registered before suddenly took on enormous
significance. For example, they had no Social Security
numbers. They moved their money in relatively small,
non-suspicious amounts, using mainly wire transfers and credit
and debit card transactions and some cash transactions.
But they didn’t engage in any complex financial tradecraft
to conceal their activities. Instead, they looked for weaknesses
they could exploit. For instance, they sent structured
wire transfers from institutions that had no software or program
in place to detect them. One financier simply used an
alias to wire money, because he knew the sending bank didn’t
have a robust “Know Your Customer” program.
Our financial investigation conclusively linked the hijackers
together. But it is not enough to conduct a financial
autopsy after an attack. It became clear that the law
enforcement and intelligence communities needed to find early
opportunities to identify and to disrupt terrorist networks.
The best way to do that is to scrutinize finances.
When terrorists raise, store, move, and spend money, they
leave trails. They are complex—but they are traceable
and identifiable through global financial systems.
The financial analysis of the September 11 hijackers gave
us a better idea of what to look for. It helped us establish
new intelligence requirements and set up new tripwires.
We established a specialized section in our Counterterrorism
Division called the Terrorism Financing Operations Section,
The mission of our agents and analysts in TFOS is to trace
transactions and track patterns. This painstaking work
helps us identify, disrupt, and prosecute terrorists, their
associates, their leaders, and their assets.
* * *
Let me give you a sense of how we conduct terrorist financing
investigations and what we’re looking for. But
just a quick reminder that predication is the key to every
investigation we undertake. We are not out looking at
everyone’s finances for no reason. In fact, when
it comes to terrorist financing, it is often you who provide
the predication for our investigations.
First and foremost, we’re looking for basic personal
information—addresses, birthdates, phone numbers, and
employment. These help us understand day-to-day expenses
and spending habits. This information then helps us
uncover travel patterns, other accounts, important transactions,
and financial histories. And these in turn may lead
us to previously unknown business or personal associations,
including other members of a network. They may also
lead us to discovering criminal activity, such as IRS violations
or money laundering.
In short, the most basic financial investigative techniques
can result in a gold mine of intelligence.
But we don’t want to do a financial autopsy after an
attack has occurred. Instead we want to conduct proactive
investigations—and we are.
For example, we investigate charities or non-governmental
organizations that are used to generate and move money around
the world. Some of them fraudulently obtain charitable
donations and then divert them to support terrorism.
This was the case with the Benevolence International Foundation
in Chicago. It claimed to provide relief to widows and
orphans—and it did in fact use some of its funds to
provide humanitarian assistance. But the organization
was actually a front for al Qaeda. The Executive Director
pled guilty to racketeering conspiracy and is now serving
11 years in federal prison.
We also investigate traditional criminal activity that might
be used to support terrorism. Because of the crackdown
on terrorists and their supporters, terrorists are not necessarily
getting stipends from al Qaeda. Instead, they are raising
it themselves, often through garden-variety crimes.
For example, the Madrid bombers sold drugs and pirated CDs.
A group in North Carolina smuggled cigarettes and used the
profits to fund Hezbollah in Lebanon. And in Torrance,
California, members of a terrorist cell robbed gas stations
so they could buy weapons and plan attacks against Jewish
targets and U.S. military installations in Los Angeles.
And so we must always be looking for links among traditional
crimes and terrorist activities.
Another type of case is one in which we investigate facilitators—the
people who move the money, whether witting or unwitting.
In addition to using the traditional banking system, terrorists
and their supporters also take advantage of unregistered Money
Service Businesses and hawalas. These appeal to terrorists
and their supporters for obvious reasons. One does not
need to be an existing customer to use them.
Hawalas are informal remittance systems that operate primarily
within ethnic communities. They can be operated from
any location with a phone and Internet hookup, whether it
is a gas station or a private home. They don’t
operate by any of the rules of the financial sector.
There is no one to regulate anything. Hawalas are based
on trust and offer near-anonymity for those who are trying
to avoid scrutiny. In one case, we investigated a hawala
that had sent approximately $4 million to over 20 different
customers in foreign countries.
* * *
The 9/11 hijackers proved that terrorists and their supporters
are always looking for chinks in the armor of our financial
systems. We’ve made tremendous progress in the
past six years in making it much harder for them to raise
and move money. A big part of this is thanks to you.
Just like criminals and their money launderers, terrorists
and their support networks rely on secrecy to conduct their
business. If their activities can be monitored and flagged,
they can potentially be stopped. We in the FBI can’t
do our jobs without the help and cooperation of the banking
You are the gatekeepers of information about terrorists’
financial activity. Your compliance with reporting requirements,
subpoenas, and other requests for information are absolutely
vital to our efforts.
The stronger our systems are, and the closer our coordination
is, the better our chances at detecting and stopping terrorists
before they can act.
Records produced and maintained pursuant to the Bank Secrecy
Act are especially vital weapons in our arsenal—particularly
Suspicious Activity Reports and Currency Transaction Reports.
Every single one of our terrorism investigations has a financial
sub-file—and one of the first things on our checklist
is to query FinCEN for BSA reports that match the subject.
You would be amazed at how much valuable intelligence they
produce—especially SARs and CTRs.
As we have seen since the September 11th attacks, terrorists
don’t necessarily need huge sums of money to plan and
carry out an attack. In a sample of FBI cases, about
42 percent of subjects had BSA reports filed. About
50 percent of those reports reflected transactions of $20,000
or less. This produces a vast amount of financial intelligence.
SARs highlight suspicious behavior and point us to indicators
of potential criminal activity—such as structuring and
other forms of money laundering. They may be the only
hook we have to detect a terrorist cell.
CTRs help fill out the financial intelligence picture because
of the objective criteria for filing them. Rather than
a subjective analysis of financial behavior, they document
specific transactions and patterns of activity that may be
the crucial piece of evidence to a case.
CTRs actually provide financial intelligence on more subjects
than SARs reporting alone. One tool is not a substitute
for the other. SARs and CTRs work in concert together—and
together, they are a powerful weapon. Obviously, they
provide information about specific transactions. But
they provide a much bigger picture than just isolated transactions.
They fill in biographical or geographical information—which
might let us prove where a suspect was on a particular day.
They help us develop leads to expand our investigations. They
can link people and accounts conclusively together—connections
we might not otherwise see.
Let me give you an example. Some of you may have heard
of the Al Haramain Islamic Foundation. It was a charity
based in Saudi Arabia, with branches all over the world.
Its U.S. branch was established in Oregon in 1997 and in 1999,
it registered as a 501(c)(3) charity.
In 2000, the FBI discovered possible connections between
Al Haramain and al Qaeda and began an investigation.
We started where we often start—by following the money.
And we uncovered criminal tax and money laundering violations.
Al Haramain claimed that money was intended to purchase a
house of prayer in Missouri—but in reality, the money
was sent to Chechnya to support al Qaeda fighters.
In 2004, the Treasury Department announced the designation
of the U.S. branch of Al Haramain, as well as two of its leaders,
and several other branch offices. In 2005, a federal
grand jury indicted Al Haramain and two of its officers on
charges of conspiring to defraud the U.S. government.
We relied on BSA information and cooperation with financial
institutions for both the predication and fulfillment of the
investigation. Because of reporting requirements carried
out by banks, we were able to pursue leads and find rock-solid
Yes, we used other investigative tools—like records
checks, surveillance, and interviews of various subjects.
But it was the financial evidence that provided justification
for the initial designation and then the criminal charges.
That’s why your cooperation is so vital—and that
of the Treasury Department as well. As in the case I
just discussed, together we have frozen the assets of at least
440 suspected and known terrorists or terrorist organizations.
We couldn’t have done this without the diligence and
dedication of the financial institutions that carry out these
designations. It is difficult to measure success in
convictions of terrorist financiers because of the variety
of violations we may use to charge suspects. But it
is safe to say that any convictions we achieve absolutely
depend on banking information.
So when your bank’s officers are conducting reportable
transactions, there are some things they can do to help us
glean even more information right off the bat. Let me
just run through a few:
- You can complete each applicable field.
- You can verify personal identifiers, where possible, and
even complete the “description” narrative. When
you fill out the “who, what, when, where, why, and
how” on the front end, this saves us all time on the
back end, because we don’t have to come back to you
with subpoenas, looking for specific information.
- You can check all the violation types that apply and avoid
checking the “other” box.
- Finally, you can file the reports electronically, which
will save all of us time.
- And if a customer strikes you as especially suspicious,
call us in addition to filing a SAR.
Believe me, we know that this creates a lot of work for you.
We also know you don’t necessarily see an obvious return
on your investment. But these reports do help us.
They often become the cornerstones of our cases. Concrete
connections are made by things as innocuous as learning the
name of an account’s co-signer. The more information
we have, the more we have to go on. When we can follow
the money, we stand a much better chance of breaking a case
All of this requires tremendous effort from us all—from
your employees and from the FBI’s employees. But
this cooperation does more than just help us find terrorists
and bring them to justice. It helps us all protect the
integrity of financial institutions.
* * *
Before I conclude, I want to take a moment to talk about
another area of risk, and another way that collaboration can
help reduce that risk—and that is in the cyber arena.
We know that terrorists want to wreak havoc on our society,
whether by outright attacks on our lives or attacks on our
economy. One way in is through cyberspace. Your
companies face external risks from terrorists hacking your
systems and internal risks from trusted insiders.
We know that hackers have exfiltrated huge amounts of data
from the systems of various companies and institutions.
The U.S. government is taking strong steps to help shore up
vulnerabilities in the .com, .gov, and .edu worlds, and we
have identified a number of perpetrators and hardened a number
of targets. But as you know, there are always those
who are searching for still more vulnerabilities.
Yes, it is your responsibility to protect your systems, but
we can help you. Our InfraGard program is a partnership
between the FBI and private companies that works to help all
of us protect our infrastructure. About two-thirds
of Fortune 500 companies are represented, and if you’re
not a member, we urge you to become one. The InfraGard
program lets us share information in a trusted environment
on everything from computer intrusions to extortion.
If we are all on the same page, we can work with you to investigate
the source of the attack and help you guard against another
You also face threats from trusted insiders. What if
al Qaeda or another foreign sponsor were able to infiltrate
someone into your company, perhaps as an IT specialist or
systems administrator? The FBI has certainly had a number
of applicants for these jobs. Their goal is to get through
our screening and get access to our systems. This would
be just as dangerous as a truck bomb exploding. These
insiders are sophisticated and must be closely watched.
Otherwise, they could take down your system, compromise other
companies, and cause grave and widespread economic damage.
We all want to protect the privacy of our clients and citizens,
yet we also want to protect their security and their lives.
* * *
And so we need to continue our cooperation—and strengthen
it. Because more challenges loom ahead, for all of us.
Globalization and technology present new complications.
Stored value cards lack regulation and permit both anonymity
and easy transportation of funds. Internet banking also
opens up new channels for those wishing to make anonymous
transactions. And online payment services don’t
have even basic customer identification and record-keeping
And on the opposite end of the technology spectrum, we expect
to see cash couriers who can move money without the oversight
your institutions provide.
Our adversaries will either become more technologically savvy
or they will regress to methods that don’t leave a paper
trail. We can’t predict what they will do.
But we can do everything in our power to make it more difficult
Tightening our financial systems works to our advantage and
to our enemies’ disadvantage. The more we work
together, the more we deny them the ability to work in secret
and force them to be creative. And the more they are
forced to take risks and find ways around our systems, the
higher the likelihood they will slip up.
And if they do, we will be waiting to catch them. The
threat is real, and the stakes are high. We must not
fail. And working together, we will not fail.
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