Jama’atul Mujahideen Bangladesh still getting plenty of funds from zakat

Flow of money from local, foreign sources remains intact despite arrest of top brass

Financial strength of militant organisation Jama’atul Mujahideen Bangladesh has been a grave concern for law enforcement agencies as the banned outfit is reportedly getting more than Tk 50 lakh a month from local and foreign sources.

JMB’s activities have lately appeared on the wane following the arrest of its top brass, including its chief Moulana Saidur Rahman, and explosives experts.

But law enforcers involved with anti-militancy drives believe its network of financial support survives intact. The flow of fund in the form of supporters’ monthly contributions, Zakat and donation apparently remains uninterrupted.

The officers, however, could not say who handles the funds after the arrest of Saidur in May. The JMB chief himself was in charge of its finance division.

Of their monthly earning, around Tk 6 lakh is being sent by around 3,000 JMB supporters staying in Australia, England, Italy, Canada, Malaysia and middle-east countries, according to a statement made by Saidur at Taskforce for Interrogation cell recently.

They send cash to their families mainly via people including friends and relatives. A portion of the money goes to JMB fund.

http://www.thedailystar.net/newDesign/news-details.php?nid=154489

Founder of Islamic Charity Convicted of Funding Chechen Jihadists

A federal court in Eugene, Oregon has convicted Pete Seda, the founder of an Islamic charity accused of funneling $150,000 to Chechen mujahideen.

Seda accepted a large donation intended to support “our Muslim brothers in Chychnia,” and then surreptitiously shifted the money to Saudi Arabia in the form of difficult to trace traveler’s checks.

http://www.investigativeproject.org/2173/founder-of-islamic-charity-convicted

Zakat for Jihad in Pakistan

This video comes to us via Money Jihad. Zakat tax money is finding its way to Jihad in Pakistan.

What else is new, right?

http://moneyjihad.wordpress.com/2010/09/10/taxes-for-jihad/

Zakat for HAMAS

Orlando Mosque Finances Hamas Fundraiser


The fast-growing “New Economy of Terror”

The Australian Conservative has published an excellent article on terror financing, including sections on Shariah Finance. We have posted excerpts and a link to this must-read article…

The Financing of Islamist Terrorism: its importance, sources, linkages, structures and mechanisms; how to shut it down and the implications for counterterrorism policy.

One of the most important lynchpins that is at the heart of facilitating the ‘New Economy of Terror’ is the Islamic banking system, the operation of which is global and governed by Islamic jurisprudence, or Sharia Law, and is therefore not yet well understood by us in the West, whether we come from the financial industry or the law enforcement and counterterrorism sector.

http://australianconservative.com/2010/09/the-“new-economy-of-terror”/

HSBC Set to Get Slammed With Largest-Ever Anti-Money Laundering Fine

HSBC, one of the largest financial institutions in the Western world–and one that stands at the forefront of the financial jihad, is set to be fined millions of dollars for lax compliance with regulations to combat money laundering.

The article below comes from an email bulletin sent out by the good folks at MoneyLaundering.com

Expected HSBC AML Fine Could Be Largest Ever: Sources

By Brian Monroe

The U.S. Justice Department is seeking to fine HSBC USA as much as $500 million for anti-money laundering compliance problems, an amount that would be the largest-ever penalty for such violations, say individuals familiar with the investigation.

Department officials have floated the dollar amount, in part, because they believe HSBC’s violations outstrip those of Wachovia Bank, which paid $160 million in March for its risky ties to Mexican foreign currency exchange houses, according to a person familiar with the matter who has read documents tied to the case.

The potential Justice Department fine, first disclosed by HSBC in an August 2 quarterly report, could be as long as 18-months off and the final dollar amount may be lowered due to bank cooperation, the person said.

The $500 million figure reflects the wide-ranging nature of problems at HSBC, said a person with government experience who has knowledge of the investigation. The bank’s officials were aware of “serious” AML problems, which dated back four years, but didn’t quickly act to correct them, the person said.

Like the Wachovia case, HSBC’s alleged violations involve correspondent relationships in Mexico and other high-risk countries in Latin America, multiple individuals with knowledge of the investigation said. The violations also involve understaffing, poor transaction monitoring and problems with attrition among senior compliance officials, they said.

Investigators are additionally looking into potential risks tied to HSBC premier accounts, which allow the bank’s clients with more than $100,000 to transfer funds online between their HSBC accounts anywhere in the world, according to the person who has seen case documentation.

In the August regulatory filing, HSBC said it would “likely” be the subject of a formal enforcement action and could pay a monetary penalty for problems with its banknote business and its correspondent relationships. In addition to its anti-money laundering (AML) troubles, the bank is the subject of a separate probe by the U.S. Treasury Department’s Office of Foreign Assets Control over possible economic sanctions violations.

In a response to queries about the timing of a possible penalty, an HSBC spokesman said that the bank could not provide details beyond what was included in its regulatory filing.

“We take regulatory matters very seriously, and we are working closely with our regulators and actively resolving these issues,” he said, in an e-mail. “HSBC is committed to a strong compliance capability.”

The U.S. Treasury Department could levy an enforcement action against the company as soon as next month while the Justice Department separately negotiates a deferred prosecution agreement to be issued later, according to the individuals.

The bank’s troubles could be exacerbated by recent comments by at least three federal judges-most vocally by the judge overseeing a $298 million penalty against Barclays-that the penalties against banks were too small or not in line with the conduct that prompted them, according to a third individual, who described HSBC’s violations as “systemic and multijurisdictional.”

Regulatory trouble began for the bank when federal prosecutors brought a seemingly unrelated case against Barton Adams, a doctor who ran a pain management office in Vienna, WV. The Justice Department accused Adams in November 2008 of using his HSBC account to transfer the profits from a Medicare fraud scheme.

Adams typically transferred as much as $90,000 in illicit proceeds at a time and, in two cases, wired more than $272,000 and $200,000 from his HSBC Internet account to an HSBC account in Canada in the name of a nominee, according to prosecutors. The case has yet to go to trial.

The investigation became the Justice Department’s “toe in the door” toward a broader look at HSBC’s compliance program, said the individual who has read case documents. The Adams prosecution eventually led to a joint investigation by the U.S. Justice and Treasury Departments, the Federal Reserve Bank of Chicago and the U.S. Attorney’s Office.

The investigation has already resulted in a shakeup among HSBC staff. In an internal e-mail, HSBC USA’s Head of Group Compliance David Bagley said that the bank’s AML and Bank Secrecy Act director Wyndham Clark was stepping down to “pursue other interests” after less than a year in the position.

In 2003, HSBC entered into a written agreement with the Federal Reserve Bank of New York and New York State Banking Department to improve its AML compliance, including suspicious activity reporting and transaction monitoring.