It is no secret that money is essential to the work of terrorists; without sufficient funds, few
terrorist plots would ever come to fruition. The United States has an array of laws and
regulations intended to stop the flow of money financing terrorist activities. But it can be
challenging to apply them in practice.
You are a FBI agent who tracks terrorist financing. Your specialty is non-electronic transfers of
funds. At the moment you are handling a case that began with the intercepting of three men at
New York’s JFK airport. The men were seated in the same row and had identical flight plans
from the United States to Istanbul, Turkey. Each also carried $9,999 in cash on their person, just
one dollar below the reporting limit for taking funds into or out of the United States.
Let’s review a few concepts before you make a decision about this scene.
Is sending money by human courier an example of an informal value transfer system (IVTS)?
No, because devices like phones and e-mail are still used to confirm delivery.
Yes, because human couriers do not sign contracts about their work.
No, because money is physically transferred.
Yes, because there need not be any paperwork involved.
Which of the following criminalizes providing material support to a terrorist organization?
the Smith Act
the United States Constitution
the USA Patriot Act
the Trading with the Enemy Act
After questioning, the men admit that they did know each other and were intending to take the
money into Syria to deliver to a charity based there. The charity involved has been investigated
for alleged ties to terrorism, on the suspicion that some of its donations end up in the hands of
ISIS. In fact, the president has frozen the U.S. assets of the charity’s leader. Syria is also one of
three countries listed as state sponsors of terrorism. However, the charity’s defenders insist the
organization does nothing more than provide religious education to children living in refugee
camps, and to date it has not been designated an official terrorist organization. The United States
attorney wants your opinion as to what charges to bring against the three men. Now you face a
decision.
By splitting the money up to avoid triggering any reporting requirements, the men have
committed the federal crime of structuring, and it will not be difficult to prove. You can
recommend charging them with this and seize the cash, but the likelihood of a lengthy sentence
is small.
You can charge the men with providing material support or resources with the intent to violate
any federal terrorism statute; the penalties under this provision are much higher, but there’s a
question as to whether you’ll be able to prove it.
You opt for the slam-dunk case, and the U.S. attorney goes along with your recommendation.
Law enforcement keeps the cash that was seized, so that’s a certain amount that will never be
funneled to terrorists. But the men only receive probation for their sentence, and you can’t help
thinking that they only represented the tip of the iceberg.
Let’s review a few more concepts before you make another decision about this scene.
How often was the crime of terrorism itself charged in the 804 prosecutions covered by the New
York School of Law study?
a majority of the time
more than 75% of the time
about 30% of the time
less than 10% of the time
Why is Hawala an effective means of transferring terrorist funds?
It is faster than electronic transfers.
It uses the barter system to avoid financial scrutiny.
It allows interest to accrue on the amounts transferred.
It produces virtually no paper trail.
It turns out that you were right. A few days after sentencing, an informant tells you that transfers
to the Syrian charity have resumed, but this time the same men are using the ancient system of
Hawala, which does not require the physical transportation of the money. Now the U.S. attorney
is back asking for your advice.
You can support prosecution under a racketeering statute, which can go after any collective
criminal activity without needing to prove terrorism itself.
You can reverse course and recommend prosecution under the material support of terrorism
statute, since now a pattern is emerging that makes it easier to prove.
