Trooper Paul Koener activated his lights and fell in behind a van speeding north on Interstate 81 on a dark stretch of road in rural West Virginia. It had been an uneventful shift, and he was ready to go home. Something about the nondescript white van and the nervous driver caused Trooper Koener to draw his weapon.
His law enforcement sixth sense told him there was more to the situation than a driver with a heavy foot. As Chawki Hammoud, sweating profusely in the March air, hesitantly displayed a North Carolina driver’s license, Koener noticed the van was loaded to the ceiling with boxes of cigarette cartons, minus the required tax stamps.
As he questioned Hammoud, it became evident that he was engaged in the illegal and lucrative trade of interstate transportation of untaxed cigarettes. A savvy smuggler can make up to $7.50 per carton by buying the cartons at the low North Carolina tax rate and selling them in Detroit at a significantly higher rate. In fact, Hammoud and his co-conspirators had run dozens of vans loaded with untaxed cigarettes to Detroit funded by counterfeit credit cards.
A year later, Trooper Koener would stop Chawki’s brother, Mohammed Hammoud, on the same highway headed south with more than $40,000 dollars in cash. Trooper Koener had no idea that the person behind the wheel was a member of Hezbollah, the most violent terrorist organization in the world, whose favored method of fundraising was cigarette smuggling. Hezbollah’s activities included the murder of more than 200 Marines in Beirut, the hijacking of TWA flight 847, and suicide bombings throughout Europe and the Middle East. It was March 1996 – more than five years before the tragic events of 9/11 – and Trooper Koener had stumbled onto an international terror financing network that spanned the globe.
Koener’s alert actions that evening helped set in motion one of the most significant terrorist prosecutions in US history. Hammoud was part of an active Hezbollah cell based in Charlotte, NC, that earned over $8 million in illicit proceeds smuggling cigarettes to Detroit, scamming small business loans out of the US government, and laundering its illicit funds. It would take more than a dozen US law enforcement agencies, the Royal Canadian Mounted Police, and intelligence agencies in the US, Canada and Israel to identify the entire scope of the cell’s international procurement chain that stretched from Charlotte, NC, to the Hezbollah stronghold of Beirut, Lebanon.
Although the 10-member cell and its associates were focused on various criminal schemes to fund their organization, cell leader Mohammed Hammoud wrote directly to Hezbollah leader Hassan Nasrallah that he was willing to do more – much more.
Ominous photos of Hammoud and his band training with assault rifles and grenade launchers on rooftops in Beirut and on a remote rifle range outside Charlotte obtained by the FBI in a search of Hammoud’s residence painted a picture of a financing cell that was poised to follow any and all orders from Nasrallah and the Hezbollah leadership, if called upon to do so.
Hammoud and his followers were ultimately convicted of providing material support to a designated terrorist organization, racketeering, visa fraud, bank fraud, money laundering, cigarette smuggling, and various other violations of criminal statutes. It was the first conviction using the “material support to a terrorist organization” statute and first Racketeer Influenced and Corrupt Organizations Act (RICO) conviction of a terror cell in the US. “Operation Smokescreen,” as it came to be called, became a landmark case that awakened the country to the ways international terrorism operations were being funded.
According to the FBI, terrorist cells exist in both large and small towns, where trickles of funding become a river of illicit proceeds funneled to terror organizations.They concentrate primarily on funding Hezbollah operations across the globe, but these financing cells can quickly become dangerous and violent, if called upon to do so. The challenge to intelligence agencies, law enforcement and financial institutions is to uncover them.
The Hammoud-led terror cell could have been detected earlier. Its members opened more than 500 financial accounts and conducted thousands of transactions from money wires to credit cards. They obtained a sizable small business loan. They created false documents, obtained visas and passports, and entered into sham marriages to enter the US and secure legal immigration status. The records the terrorist cell created and the trail it left went undetected because of the policy, technical and analytic challenges facing the agencies tasked with finding such activity. Clues existed in silos and inside walls erected between and within agencies. Immigration records, state and local criminal records, FBI databases, State Department visa data, records of suspicious financial transactions kept by FinCEN, and tax records of the Treasury Department all could have been correlated to reveal the larger picture.
We need to empower government agencies and law enforcement with the latest technology in secure information sharing, data integration, and advanced analytics to enable ways to connect the dots and coordinate investigations.
Continue reading How a Hybrid Anti-Terrorist Approach Could Have Prevented Millions of Dollars from Flowing to Overseas Terrorist Organizations. This is a free white paper that explores how your law enforcement or government agency can leverage multiple analytical methods to proactively identify terrorist cells in their infancy – before they can inflict serious harm to citizens or funnel significant funds to their foreign-based counterparts.