FBI-Military Success Against ISIS Will Create 'Terrorist Diaspora'

 

Top counterterrorism officials say the Islamic State group’s threat doesn’t end with its defeat on the battlefield.

 

The Islamic State militants are more likely than their Al Qaeda-linked counterparts to use the global financial system to move funds and financial institutions that spot such activity should phone the FBI and make Suspicious Activity Reports, a law enforcement official said 

"Al Qaeda is very old school, literally taking laundry bags of cash, moving it from Afghanistan Pakistan into the Middle East. It's mostly a cash-and-carry type of organization. ISIL, they will use money services businesses, formal banking, and now they're starting to starting to dabble a little bit in the virtual currency market," Adam Drucker, assistant chief of the FBI's Terrorist Financing Operations Section (TFOS), said at the conference held by the ACAMS in Las Vegas.

This is because ISIL tends to be younger and has more western influence, whereas Al Qaeda is rooted in the Middle East, Drucker said. Drucker, who had been a bank fraud agent in New York prior to being reassigned after the Sept. 11 attacks, noted that the FBI unit is "involved mostly with tracking" Islamic State, also known as ISIL.

ISIL uses social media – especially Facebook and Twitter -- "like we've never seen previously" with any other terror group, Drucker said. He added that its members also use encoded messaging apps "thinking they're operating under anonymity."

With regard to terror attacks "directed" by ISIL around the world, the FBI unit is finding there is an "exploitable pattern" of financial transactions, Drucker said. In contrast, with attacks merely "inspired" by the group, "there is very little financially that suggests this person is about to conduct an attack," he said. 

ISIL has generated "a lot of cash" from oil sales and taxation of those within the geographic area it controls, ransom and sale of antiquities, Drucker said. The FBI, the U.S. military and foreign partners each bring their own "tool box" to remove this currency from ISIL's hands, he said.

"Even though I've put in a line item for an FBI predator (armed drone aircraft) we've not been approved for that just yet, so we rely on the military to incinerate these bulk cash stores," he said, adding the U.S. military and "foreign partners" also help capture suspected ISIL financiers.

Foreign fighters supporting ISIL, especially those from Europe, all receive "some type of subsidy" while in the conflict zone of Syria and Iraq, Drucker said. 

"That subsidy has gone lower and lower since the military has been taking action against (ISIL's) cash stores, but for the most part, the families of these individuals send money through the formal banking system, Western Union, PayPal, MoneyGram, and that's exploitable for us," Drucker said.

Mapping known financial networks

Once the FBI is able to identify those who facilitate the money movements – typically criminal networks that also move money for drug and human traffickers – "we're able to expand out many, many layers," he said.

After identifying one person from a single transaction linked to a known ISIL member, the FBI was able to spot roughly 300 transactions over the course of a year and traced them to family members of foreign fighters. 

"That has incredible intelligence value for us, to be able to tell several European nations 'You may not be aware that this individual left your country about six months ago because his family just sent money through a known ISIL facilitator," he said.

He added there is a "foreign fighter pipeline" in the reverse direction as well – from Syria and Iraq into Europe – and TFOS is able to help identify where the facilitation networks are within each country based on financial transactions.

"Financial data is the strongest point-to-point connection you can have. It is as significant as an email or a phone call, because you're sending money you mean to send. You don't misdial a financial transaction; you know that person you're sending money to in some fashion," he said.

He noted that the FBI will often "key in on" phone numbers collected by money transfer agents because even if a terror network facilitator uses a fake identification document, "we see phone numbers carry over from fake ID to fake ID" because "these individuals want to know if the money is getting through," he said.

When Drucker has been called to testify before Congress, lawmakers have asked him why the FBI terrorist finance section does not immediately shut down terror facilitators, he said. His reply was that while it seeks to "insure the financial system is protected," agents do not want to push facilitators away from transmitters such as Western Union to "something we can't look at and cannot track" like virtual currencies.

"Our biggest strength right now is that they continue to use U.S. based financial institutions to conduct their business," he said.

The attacks of Sept. 11, 2001 in the United States lacked a financial footprint that would have alerted authorities," Drucker said. In contrast, with regard to recent terror attacks in Paris and Brussels, "we have found an exploitable pattern and we can apply that typology to financial data sets and surface potential operatives and facilitators," Drucker said.

Financial institutions playing key role against ISIL

The FBI's terrorist financing unit handles both "reactive" and "predictive" terror related financial probes. It is especially good at the former, so once an attack happens, the section within hours knows "where these individuals banked, how they bought their guns, where they trained – firearms – and that's largely because of the folks in this room," he told the audience, which included hundreds of bankers and securities industry and money transfer compliance professionals. 

"The private industry is a huge partner for us, because you guys are the first responders when it comes to these types of attacks. I thank you as a whole for that because without your assistance we can't get to the bottom of it," he said.

Dennis Lormel, a career FBI special agent and financial investigations specialist who founded the terrorist finance unit following the Sept. 11 attacks, said that every time a terror attack has occurred since then, bankers have telephoned the unit swiftly with useful tips. Lormel is now a Washington-based anti-money laundering consultant.

The FBI's unit has annual meetings with the financial services sector – facilitated by the Federal Reserve – where both classified and unclassified briefings are delivered.

"What we tell banks nowadays is 'You want to look for customers' geographical movements.' If a customer was in Maryland last month and all of a sudden he is in Turkey or Syria, or if their IPs when they log in are coming from the Turkish-Syrian border area, those are the kinds of things we're looking to trigger (suspicious activity reports) on," Drucker said. 

It is typically difficult to spot transactions linked to terrorist financing and terrorist attacks require little money to conduct, typically less than $5,000, he said. He added that the FBI must therefore rely on the financial services industry to provide intelligence such as the aforementioned tips on customers' geographic shifts to the conflict regions.

The military perspective on financial intelligence

Using American football as a metaphor, the financial services sector plays a key role on defense and can help protect the United States from terrorists by exposing financial transactions, but the information it provides can also help with offense by allowing the U.S. military to "hurt bad people better," Josh Potter, a lieutenant colonel with the Transnational Threats Division of the U.S. Special Operations Command (SOCOM), said during the same conference panel. 

Potter cited Operation Tidal Wave, wherein the U.S. military has targeted ISIL by bombing its oil facilities, "cash houses" and leadership and in effort to diminish its once fat coffers. 

"They didn't understand 'How the heck (is the U.S. military) getting that information?' It's by talking to good people and listening to people like you," Potter said.

The U.S. air strikes have been "persistent" since January and ISIL is "hurting" and in recent months "flipped" and "turned to extortion of their own people as the principal source of financial revenue," Potter said. 

"Ladies, if your dress is too tight, that's $25. If you're showing your eyes, that's $10. If you're a farmer and your sheep have bells on them, they take your sheep," he said.

Once the U.S. military and its allies have "driven a wedge" between ISIL and the people who once supported it, that is "when the tide turns," he said.

But an estimated 40,000 foreign fighters have traveled to Syria and Iraq – many from western nations – and when they return home "they're going to raise hell," he said. 

Clearly, the implication was that financial intelligence may play a key role in helping to identify and track such individuals as they turn to the facilitator "pipeline" Drucker mentioned to fund their return travels.