Attacking The Money Machine

Police raids in five U.S. cities and two foreign countries today were the culmination of two long-running investigations into terrorist money-laundering operations. At the heart of the busts were a financial network based in the United States and Somalia called Al-Barakaat and a network of companies based in the Bahamas, Switzerland and the Alpine tax haven of Liechtenstein called Al Taqwa ("Fear of God).

Both financial networks have been under investigation for possible terrorist ties by law-enforcement and intelligence agencies in the United States and Europe for more than a year but have not been previously subject to such serious actions by the U.S. or foreign governments.

Federal agents raided money-changing shops located in Seattle; Minneapolis; Columbus, Ohio; suburban Boston, and Falls Church, Va. Federal search warrants were executed by Internal Revenue Service and U.S. Customs agents assigned to an anti-money-laundering task force called "Operation Greenquest" in the Boston, Columbus and Falls Church area. Federal agents also confiscated assets of alleged Al-Barakaat outposts in Minneapolis and Seattle, hoping to put together enough evidence to justify future search warrants in those locations.

U.S. intelligence and law-enforcement sources say that Al-Barakaat's U.S. operation specialized in transferring to Somalia money earned or raised by Somali expatriates living in the United States. For at least the past year, U.S. intelligence officials have been following up on leads suggesting that at least some of the money shipped out of the U.S. through the Al-Barakaat organization was ending up with a Somali-based militant Islamist organization called Al-Itihaad Al-Islamiya, which U.S. officials believe funnels some of its funds to Osama bin Laden's Al Qaeda. The Al-Itihaad group was listed on the first antiterrorist sanctions list issued by the Bush administration after Sept. 11.

Law-enforcement sources indicated that Al-Barakaat's storefront currency-exchange network--which the Bush administration says also has several outposts in the United Arab Emirates, a country that until recently had virtually no laws or agencies to counter money laundering--was targeted for U.S. sanctions as an example of how informal, often unlicensed money changing businesses can be used by terrorist networks.

The administration's decision to go after the Al Taqwa financial network could prove embarrassing to authorities in Switzerland, who only a month ago announced that a thorough investigation of Al Taqwa had come up with no evidence of a link to terrorism. Last week, the office of Switzerland's chief federal prosecutor, which gave Al Taqwa a clean bill of health in early October, announced that it had received new information about possible "links between Al Taqwa and the bin Laden network."