Jart, I am wondering is there an open raising by terrorists? I mean do they raise money  indicating the reason " for bombing", "destroying   the enemies" or something like that?I think a lot of people would give the money for that reasons, wouldn't they? Do special services monitor that kind of  raising?

Terry, IQ Crew, et. al. 

Yes, a really difficult issue, and in one sense this whole topic area lends a hand to those who advocate the current or developing intel approach of extensive SIGINT domestic & foreign data mining. 

NSA's Pinwale & Stella Wind meta-data mining programs arguable could be readily widened for the monitoring of micro-financing. This to enable what is called "real-ID" pattern recognition, i.e. the system throws up warning bells for fake IDs and patterns of anonymous transactions, etc. 

In such a scenario it is then realistic to:

(a) lean on / investigate micro operators and money transfer agents where such patterns are more than a reasonable & statistical norm

(b) this could cross correlate against highlighted individuals, or say a specific geographical area (say a zip code) to alert local law enforcement

Ironically, I think from a propaganda perspective if NSA & the contractors made the above a public issue, they would probably gain increased public support? 

 The down side? All very doable, obviously this then brings us back to the argument (see earlier blog) of how much surveillance do we as a society desire.

There are many kinds of money sources that terrorists are relying on.

In addition to online fraud, one of the biggest sources of cash flow for terrorist activities is drug trafficking. Drug users, including here in America, are among the best sources of funding for Al Qaeda.

Another increasingly lucrative source of few words but massive transactions is piracy on the high seas. It would come as no surprise when direct links are found between Somali pirates and Al Qaeda.

That is why it is important for us not just to try to choke off the money supply for terrorism but also to focus on the root causes and for those problems. Otherwise we will simply be chasing newer and more elusive ways of funds transfers while still remaining at risk of terrorism worldwide.

Imran

http://imran.com/media/blog/ 

Yes, it seems there's a need for tight ID security for micro-payment and finance sites. That should be a good focus of development effort, since so much good work is being done via micro-financing.

How can one be sure that money transferred in small amounts isn't somehow related to laundering?

Mary, I don't think that we can ever be 100% sure. But money transfer companies should make sure that the person sending the money present valid Ids. That may not be the panacea; but at least it would help somehow.

I have been beating this particular drum for years and it finally seems to be making a difference. I suspect that you (albeit in a greater sense) feel the same way. That is why I try very hard to make sure that you know there are many of us who sincerely appreciate your work. Kudos my friend.

Hi Michael,

Quite frankly I think some of these techniques are preventable, but it will require some form of controls and better safeguards for online transactions.

Brian Krebs article is very timely and helps to demonstrate how simply a web user can become engaged in cybercrime by becoming a money mule. 

Jart, As usual a chilling dose of reality. Money laundering, financial transfers and fraudulent transactions have now become nameless, faceless and of no country origin. I know there is a tremendous amount of unregulated money trading hands in the US stock market and Foreign Exchange market.  The jurisdiction of ADR's(American Depository Reciepts) move money seamlessly from country to country disguising their origin. It appears impossible to enforce  in a timely fashion. There seems to be so many ways for terrorists to move and access money. Elecronic fingerprint or not, it's smoke and mirrors.

It's hard to imagine what legal or regulatory change could be made to close off these loopholes -- are we going to require Western Union and micro-financiers to pisitively identify and disclose (or run through a "clear list") the originator and recipient names in every transaction? I'd love to hear from Jart or our readers some ideas for effectively closing off these loopholes.

Thanks for an informative post, Jart. A lot of what you say reflects very negatively on microcredit schemes. How can one be sure that money transferred in small amounts isn't somehow related to laundering?