States of terror – terrorist resourcing, groups vs lone wolves

The biggest terrorist stories to hit the global media in the last few weeks have been the Charleston and Tunisia attacks, carried out by individuals, at least one of whom had set out his intentions in a published manifesto. Rather than falling FCA - gunshopprey to a particular group and shouting out their message, Dylan Roof – the Charleston massacre suspect – apparently ‘self-radicalised’ by reading various on-line sources of extremist material. There is no information, as yet, on where Seifeddine Rezgui, the gunman in the Tunisian attack, acquired the gun he used but there are some links between him and the Ansar al-Sharia group in Libya. One US media outlet asked Charleston Police how Roof was able to get his hands on a gun. “We will not discuss that aspect of the investigation”  a spokesman told the press.

Meanwhile in Egypt, the government has adopted a ‘controversial anti-terror law‘ speeding up prosecutions for terrorist related acts, laying out more severe penalties for those convicted and increasing the powers of terrorism investigators to examine bank accounts. The new law is a direct response to the killing of state prosecutor Hisham Barakat in late June.

Investigating terrorist resourcing – who supplied the weapons, how and any connections to known terrorist groups – might unearth some significant connections and information on who is behind terror attacks.

Resourcing v Financing

Research into terrorism has begun to notice a difference in approaches to investigating where the  money comes from. Changing perspectives on terrorist financing might highlight more gaps in our understanding of terrorism, why and how terrorist acts are committed.

Terrorist organisations use far more than money to maintain operations leaning on industries and infrastructure (IS has hijacked oil production in Iraq), criminal partnerships (the proceeds of crime fund terrorism too), commodities and more to generate funds. Moreover, the financial system as we know it is a minor player in some of the countries where terrorist groups thrive.

“Our understanding of terrorist financing is simplistic – funds flood the banking system, if we find it we can stop terrorists,” says Brenda Collins of ManchesterCF.

Source: Manchester CF

Source: ManchesterCF

“The resourcing concept is a much better fit with the risk-based approach (RBA) than the financing concept. The resourcing model turns the focus to the behaviour, the geographies, the industries, the materials. The financing idea often automatically pushes people towards transactions, senders and recipients.”

To learn more about the mechanics of terrorist resourcing – how different terrorist organisations resource their operations, how terror groups acquire funding channels and the red flags that can reveal terrorist resourcing networks, click here.

Mention the Financial Crime Asia blog to ManchesterCF to find out on special offers on training programs.


A fool and his money …. the murky world of freelance writing

Modern day financial criminals are leaning on the collaborative aspects of social media to boost their credibility and freelance writers could be unwitting accomplices.

In my search for freelance writing assignments, I recently posted a profile on a social media site. Scratching beneath the surface of one particular creative writing job has revealed a potential gold mine for financial criminals – the high yield investment program or HYIP.

HYIPs are fraudulent schemes dressed up as sophisticated investment opportunities, according to the US Securities and Exchange Commission.  The Commission also claims that HYIPs operate like Ponzi schemes, wherein the capital given by new investors is used to pay earlier investors, and to convince them they are making a return on capital when in reality their own funds have long since disappeared. But this view is not held by HYIP investors in specialist internet forums. Some commentators see HYIPs as a legitimate way of making money without the interference of a regulator. Others admit to losing money in scams, but claim some HYIPs are genuine. Differentiating between the legitimate programs and the scams is not simple. HYIP advice forums guide investors to sites with well written content, which may indicate a higher level of commitment from the HYIP investment team than one that is poorly described.

Getting your marketing, copy and image right – which means with correct spelling and grammar – is fundamental to building confidence in any potential investor. The average 419 letter is poorly written and its fraudulent intent is obvious to most — although not all — readers. An investment scammer’s strengths lie in the confidence he inspires in potential investors, in selling a fake dream and convincing people to part with their money and not necessarily in content writing or graphic design. Contracting out the other parts of their scam to specialists will only add to the credibility of the scheme.

A creative company profile

I was invited to bid for a 1,000 word creative assignment to write a company profile. My contact is a man whose profile shows he is based in a harbour town in North Africa. He and his business partners claim to be professional traders, who formed an investment company in 2010, prior to the Arab Spring uprising. They are also operating legally — in Panama. 

The brief is light touch and offers no information on the company other than the three funds they offer. The company is small — my contact claims they are not planning on making billions and they want this to be clear. I have been instructed to omit any names from the copy. The brief further advises me to write ‘convincing content’ to entice people to ‘invest confidently.’ There is no mention of a regulator, or regulated entity, no mention of which licenses the company holds and no statement of the potential risks investors could face. It does make one promise which is sure to hook the uninitiated – all of the investors will receive their full principal investment back plus profits once the investment period expires.

HYIP, HYIP Hurrah? 

HYIPs are the fodder of internet chat rooms populated by professional gamblers. A quick browse through the TalkGold internet forums reveals several numerous threads relating to setting up HYIPs and HYIP monitor sites. Monitor sites will track HYIPs progress and claim to provide more savvy investors with information on when to pull their money out of the program. However, this is a far from fail-safe investment strategy.

In 2010, the US Financial Industry Regulatory Authority warned that the ‘con artists behind HYIPs are experts at using social media — including YouTube, Twitter and Facebook — to lure investors and create the illusion of social consensus that these investments are legitimate.’

According to the brief I received, the firm wants investors to read the website ‘like a novel being written just never written before’ – and they would like to head the website with a pithy quotation.

Although the opportunity to create a completely fake reality is appealing, I turned the job down. Several pithy quotations to head the site have sprung to mind however and I think I might offer him this fine English proverb as an opener:

‘A fool and his money are soon parted.’