Oh, were you expecting a post on some terror charade involving cartoon food products? ;) Sorry, this is about a different story coming out of Boston. It looks like the Justice Department might go 'Al Capone' style, and charge a Boston-based subsidiary of one of the central banks involved in terror financing with tax-evasion. As we'll see below, this could be quite significant.
Here's the article:
Terror Inquiry Turns to Tax Law
Efforts to Probe Financing
Of Islamic Extremists
Centers on IRS Violations
By GLENN R. SIMPSON
January 31, 2007; Page A3
The Justice Department is investigating possible criminal tax-law violations by a Boston private-equity firm that manages hundreds of millions of dollars for Muslim investors in Europe and the Middle East and is affiliated with a Swiss investment group U.S. authorities suspect of financing Islamic extremists.
Federal prosecutors disclosed a grand-jury probe of Overland Capital Group Inc. in filings last week with U.S. District Court in Boston. While the Boston grand jury is examining suspected tax evasion related to complex investment structures, the case is being handled by a prosecutor from the Justice Department's counter terrorism division, the filing states.
In the years since the Sept. 11 attacks, U.S. counterterrorism agencies have been stymied in several attempts to bring terrorism cases against wealthy individuals from the Middle East. Some prosecutors have pushed the government to use tax laws as a more effective approach, a method famously employed against gangster Al Capone in 1931.
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One of the possible reasons it's been so hard to bring terrorism cases against wealthy individuals from the Middle East is that they've been hiring the most politically connected law-firms in the country to defend them.
Also, inter-agency infighting and turf wars were a big reason terror-financing investigations were thwarted, with the Treasury and Customs department frequently charging the FBI with thwarting their investigations. This was especially the case with the important "Operation Greenquest" task force started soon after 9/11 (although that was all 'fixed' when the Treasury and Customs got folded into DHS, at which point Chertoff transferred authority to the FBI and Operation Greenquest died a slow, bureaucratic death).
Continuing...
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Overland, which doesn't disclose its ownership, says on its Web site that it has made more than $1.5 billion in U.S. investments for its clients, largely in real estate, since its founding in October 2001.
Legal records say Overland is controlled by a Geneva-based financial group known as Dar Al-Maal Al-Islami Trust, which was founded by a senior member of the royal family of Saudi Arabia. The U.S. government is treating the companies as related: The Justice Department is examining "acts and practices" of Overland and a DMI subsidiary "that implicate potential violation of the Internal Revenue Code," the filing states.
DMI is the hub of a network of banks and investment funds across Europe and the Middle East that cater to Muslims interested in strictly following Quranic principles, such as a ban on collecting interest. Some DMI affiliates came under scrutiny by U.S. counterterrorism agencies in the mid-1990s for suspected connections to extremists, government records show.
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DMI also happens to be a major shareholder in the al-Taqwa network, which is the primary financial vehicle for the Muslim Brotherhood. The Muslim Brotherhood is the god father of modern Sunni Islamist movements and the US has been working with them since the 50's (they were great anti-Communists). Muslim Brotherhood affiliated and/or inspired groups include Hamas, al-Qaeda, the Iraqi Islamic Party (the largest Sunni Islamist party in Iraq). Even the Iranian Revolutionary ayatollahs had ties to the Brotherhood (check out the part on the Devotees of Islam in this MoJo article). Al-Taqwa also has a number of connections to European far-Rightists (one of its directors is a neo-Nazi-turned-Islamist, for instance) . This entire DMI/al-Taqwa milieu has a heavy overlap with the DC-based SAAR network of charities, institutions and financial companies that was raided in March of 2002 as part of the Operation Greenquest terror-financing investigation. In addition, the SAAR network (now called the Safa Trust) is closely connected to Grover Norquist's "Islamic Institute", which was part of the GOP's Muslim voter outreach program, an important voter demographic in states like Michigan and Florida. Another figure involved with this network, like Talaat Othman, sat on the board of Harken Energy.
Continuing...
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DMI and Overland are partners in a joint venture in Bahrain, and numerous corporate filings in the U.S. name DMI's chief executive as the president of various Overland-backed investment ventures.
Corporate and bank records show Overland has borrowed large sums from a DMI subsidiary, the Bahamas-registered Islamic Investment Co. of the Gulf Ltd. Legal records also describe DMI as an indirect 60% shareholder in Overland. Two former Overland employees also claim in a civil lawsuit that Overland is owned or controlled by DMI.
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Using such offshore companies, investors can structure their U.S. investments as loans instead of equity. That offers potential tax benefits because interest income to foreign investors is taxed far more lightly than profits from an equity investment. Such arrangements are legal, but only if they aren't primarily intended to circumvent Internal Revenue Service rules.
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The al-Taqwa network also did much of its work out of a Bahamas-based subsidiary, Bank al-Taqwa, via a correspondent account with a major Swiss Bank that has a very interesting history. One of the reasons the Swiss investigation into al-Taqwa died was the withholding of evidence by the Bahamas. Interestingly, Bank al-Taqwa's lawyer, Sean Hanna, is the son of the Bahamas Governor General. Sean Hanna died unexpectedly six months after the investigation was closed.
Continuing...
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Dar Al-Maal Al-Islami (Arabic for "Islamic House of Finance") was founded in the early 1980s by Saudi Prince Mohammed Al-Faisal Al-Saud, a pioneer in so-called Islamic banking. Senior members of the Muslim Brotherhood, an international fundamentalist group, have held positions at various DMI affiliates, according to corporate records.
The Brotherhood, founded in Egypt in the 1920s, is the ideological inspiration for the terrorist groups al Qaeda and Hamas, but it now says it has renounced violence.
A DMI affiliate called Faisal Private Bank (Switzerland) SA, formerly known as Faisal Finance, has been named in two major terrorism probes. In one of these, the Justice Department alleges that Faisal Finance wired $665,000 to the account of a top Hamas leader, Mousa Abu Marzouk. (The source of those funds hasn't been disclosed.)
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Mohammed al-Faisal is also an investor and board member of the al-Shamal bank, a bank that Osama bin Laden invested $50 million to help start. Al-Faisal's sister, Haifa, is the wife of Prince Bandar and has quite an interesting 9/11-related history of her own.
Continuing...
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In the same prosecution, the Justice Department alleges that in 1993, a Saudi businessman used Faisal Finance to transfer $30,000 to an alleged Hamas leader in Chicago named Muhammad Salah, who is currently on trial in Chicago on terrorism-related conspiracy charges. The same Saudi businessman, Yassin Qadi, also used Faisal Finance for a $1.25 million transfer to an alleged al Qaeda front company in 1998, according to legal and bank records.
Faisal Finance hasn't been charged with any crimes, but shortly after the Sept. 11 attacks, Mr. Qadi was named a "Specially Designated Terrorist" by the Treasury Department for alleged support of al Qaeda. Mr. Qadi has denied financing terrorists. Another Faisal Finance client, al Qaeda leader Mamduh Mahmud Salim, was convicted of conspiring to kill American citizens and is now in federal prison.
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Yassin Qadi, an accused al-Qaeda financier that also bankrolled P-Tech. P-tech is a 'risk-assessment' firm hired by numerous government agencies to analyze vulnerabilities in their computer networks. Its clients included the FBI, DoE, the Air Force, NATO, the Navy, the FAA, the House of Representatives, and the White House (and that's just some of its clients). The FBI knew about P-tech's ties to Yassin al-Qadi and sat on it for a year before it was raided in October 2002. It's the kind of interesting relationship between these fellows and companies involved with national security that seems to continue to this day
Both Yassin Qadi and Mousa Abu Marzouk were targets of the "Operation Vulgar Betrayal" investigation at the center of FBI Whistle blower Robert Wright's complaints about pre-9/11 FBI high-level obstruction into the investigation of this network.
For a bit more on DMI's high-level and confusing connections, let's look at an excerpt from Kevin Coogan's must-read "Report On Islamists, The Far Right, And Al Taqwa":
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Prince Mohammad al Faisal al Saud is not only a pious Muslim but he belongs to the innermost circle of the Saudi dynasty as the son of the former King al Saud, cousin of the first rank to King Fahd and brother to the longtime head of the Saudi secret service, Prince Turki al-Faisal who stepped down in August 2001.
Since 1983 the Prince became in charge of the trust company Dar al-Mal al-Islami (DMI), founded two years earlier and which is based in Cointrin near Geneva. It has an estimated $3.5 billion dollars, the greatest part (according to the former DMI manager Ziad Keilaney) coming either from the private holdings of the King’s family or other wealthy Saudis. The DMI, along with the Saudi banking concern Dallah al-Baraka, is one of the most important sources for the spreading of Wahhabi ideas in Islam.
The DMI also controls the Islamic Investment Company of the Gulf, the Bahrain based Faisal Islamic Bank and the Geneva-registered Faisal Finance. The vice-president of Faisal Finance SA is a Somali named Omar Abdi Ali who is also to be found in the top management of DMI. DMI directly financed two "humanitarian" organizations, the International Development Foundation (IDF) and the International Islamic Relief Organization (IIRO).
In June 2000 the DMI completed the fusion of Faisal Islamic Bank and the International Investment Company to the Bahrain-registered Shamil Bank. A few months later the Shamil Bank opened its first foreign affiliate in Yemen. The Shamil Bank was 60% controlled by representatives of DMI in Nassau while the rest was from unknown private investors. The Shamil Bank held in turn 20% of the shares of the Arab Albanian Islamic Bank in Tirana. The bank employed at least one member of Al Qaida, an Egyptian named Ibrahim al-Jajjar, who in 1998 was involved in a planned assault on the American Embassy in Tirana.
Prince Mohammed al-Faisal al-Saud and his Somali top deputy Omar Abdi Ali are also represented in the highest management of the Shamil Bank. Another member is Haydar bin Laden, one of the many half brothers of Osama.
(At the beginning of 2001 the sister company of Faisal Finance was hit by the economic currency crisis and the collapse of the Turkish economy. In Geneva Prince Mohammed and his friends decided to get rid of the Turkish company. In May 2001 Faisal Finance was taken over by the Turkish big businessman Sabri Ulker and his USA-registered Islamic Finance group, American Finance House—Lariba and renamed Family Finance.)
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Yeslam Bin Laden
The French Swiss Lucien Rouiller was until 2001 not only an advisor to the DMI in Cointrin but he was also an advisor to Faisal Finance SA and the Faisal Islamic Bank. At the same time Rouiller was linked to the Geneva-registered MKS Finance SA owned by the Shakarchi brothers. In the 1980s Shakarchi Trading sent not just $25 million of CIA money to Afghanistan but also was involved in drug money for the Turkish mafia. For a time a member of the family was represented on the advisory board of Russell-Wood in London as well. And this complicated and many-branched business was the British branch of the Geneva-registered Saudi Investment Company (SICO). SICO was founded in May 1980 as the Swiss investment center for the bin Laden family under the name Cygnet SA and later renamed SICO. It belongs to the Swiss-based Yeslam bin Laden, one of Osama’s many half brothers. Yeslam has been zealous in promoting the idea that the bin Laden family has nothing to do with Osama. Yet Osama’s <step</a> mother in the beginning of 2001 visited Afghanistan for an expensive marriage ceremony of her grandson (which was broadcast over al-Jazeera) and she speaks regularly on the phone to Osama. Another half brother of Osama’s, Sheik Ahmad, told CNN how much he admires Osama’s deep piety as well as his determination to achieve a goal. And more and more French and American experts are suspecting financial support from his family that has economic consequences. After 9/11 members of the Caryle Group (which includes George Bush Sr.) asked the bin Laden group to withdraw its investments. Also an investment of at least $20 million by the bin Laden group in a sister society of the Deutsche Bank in London was suddenly not welcomed.
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And finally, to get a sense of just how interconnected so many of these issues are, let's look at this tid bit of interesting info in the sidebar of an article by money-laundering expert Lucy Komisar on the Clearstream affair:
Banking with Bin Laden
Following the September 11 attacks on the World Trade Center and the Pentagon, the United States started focusing its investigation on the financial trail of Osama bin Laden and the al-Qaeda network.
Like any other large, global operation, international terrorists need to move large sums of money across borders clandestinely. In November, U.S. authorities named some banks that had bin Laden accounts, and it put them on a blacklist.
One was Al Taqwa—"Fear of God"—registered in the Bahamas with offices in Lugano, Switzerland. Al Taqwa had access to the Clearstream system through its correspondent account with the Banca del Gottardo in Lugano, which has a published Clearstream account (No. 74381).
But bin Laden may have other access to the unpublished system. In what he calls a "spectacular discovery," Ernest Backes reports that in the weeks before CEO André Lussi was forced to leave Clearstream last May, a series of 16 unpublished accounts were opened under the name of the Saudi Investment Company, or SICO, the Geneva holding of the Saudi Binladen Group—which is run by Osama’s brother, Yeslam Binladen (some family members spell the name differently).
Yeslam Binladen insists that he has nothing to do with his brother, but evidence suggests SICO is tied into Osama"s financial network. SICO is associated with Dar Al-Maal-Al-Islami (DMI), an Islamic financial institution also based in Geneva and presided over by Prince Muhammed Al Faisal Al Saoud, a cousin of Saudi King Fahd, that directs millions a year to fundamentalist movements. DMI holds a share of the Al Shamal Islamic Bank of Sudan, which was set up in 1991 and partly financed by $50 million from Osama bin Laden.
Furthermore, one of SICO’s administrators, Geneva attorney Baudoin Dunand, is a partner in a law firm, Magnin Dunand & Partners, that set up the Swiss financial services company SBA—a subsidiary of the SBA Bank in Paris, which is controlled by Khaled bin Mahfouz. Mahfouz’s younger sister is married to Osama bin Laden.
There's a lot more under the DMI/SICO/Bush family business/Shakarchi/Clearstream/drug-smuggling/money-laundering/terror-financing/far-Right rock but that stuff instead scary enough to drum up support for bombing Iran. So instead, we'll return to your regularly scheduled programming...