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Bookies, banks and fraud: The methods Irish-based ISIS sympathisers use to steal and funnel cash

Gardaí continue to crack down on the offence.

Image: SIPA USA/PA Images

THE ISLAMIC STATE might have been defeated in large-scale battles in the Middle East but its tentacles still extend all over the world and into Ireland, where a small handful of people are doing IS’s bidding, sending cash and laundering funds for the extremists. 

Gardaí are trying to clamp down on ways in which criminals are transferring large amounts of money – especially those who are suspected of funnelling cash to terror organisations such as ISIS.

This week, officers carried out six searches in the capital, and seized documents, electronic equipment and €4,500 in cash.

Four people, a man in his 40s and three women in their 30s, 40s and 60s, were arrested over suspected terrorist financing contrary to Section 13 of the Criminal Justice (Terrorist Offences) Act, 2005.

They were all later released without charge. Gardaí did not confirm which group they were arrested in connection with.

The issue of funding for terrorist organisations is a big one for Ireland – and specialist garda units are working with Irish banks to stop money being laundered and filtered through Irish institutions.

How are people scammed in Ireland? 

Extremist sympathisers use a number of different ways to either generate cash through fraudulent means or transfer large amounts of money. 

One method is called invoice redirect fraud.  

This is carried out by scammers contacting businesses that regularly use suppliers and perform online financial transactions. In December 2017, it emerged that Dublin Zoo had fallen victim to an internet-based invoice fraud scam that involved the theft of almost half a million euro.

The scam tends to work in this way: The scammers will email, write to or phone a business pretending to be their legitimate supplier – but alter payment details so that the money is redirected to an account owned or controlled by the fraudsters.

The business unwittingly pays out the money – as with the €500,000 paid over by Dublin Zoo – believing it to be going to their supplier.

There are a number of people gardaí suspect are involved in invoice redirect fraud.

One of these is a man who they believe was instrumental to a number of frauds in 2016 which saw several Irish firms out-of-pocket to the tune of a total of €2.8m. 

The Pakistani-born man, who is in his mid 20s and lives in the UK, is suspected to have links to extremism. Similarities between the 2016 frauds and the Dublin Zoo fraud have led gardaí to examine any possible links between the operations.

Warning to Irish funds

Meanwhile, the Central Bank has warned Irish-based financial funds that the size of their industry makes it attractive to criminals.

In a report published last year, it said funds should take measures to more effectively counter the risks of money laundering and terrorist financing.

Following on-site inspections of a number of companies, the bank identified a number of issues that it said need to be addressed.

These included firms’ reliance on third parties to undertake customer due diligence, insufficient evidence of effective ongoing monitoring of investor transactions and a lack of procedures to deal with investors who fail to provide the required due diligence documentation.

Bookmakers and money laundering

Recent changes to money laundering legislation mean that bookmakers have to take on more responsibility for deterring money laundering. 

Last year, TheJournal.ie reported how gangland criminals are using online betting accounts to stash drug money, allowing users to pay for the illicit items without cash and withdrawing it online without coming to the attention of the authorities. 

Gardaí believe a number of serious criminals are using these accounts to safely store cash before moving it to a safer location, where it can be withdrawn.

A number of bets are made on very short odds to keep the account looking legitimate. The money is only kept in an account for a very short amount of time before it is withdrawn. This is to stop many of the bookmakers’ built-in anti money laundering software from identifying the issue and moving on.

The new laws, which will introduce a number of measures designed to target money laundering and the financing of terrorism, will see some bookmakers and gambling providers forced to implement due diligence requirements and take responsibility for suspicious transactions in the same way as banks and other financial institutions.

London Bridge attack anniversary A graffiti reads Love not hate at the Southwark Needle by London Bridge, in memory of the victims of the London Bridge/Borough Market attack during a minute's silence ceremony to mark the one year anniversary last year. Source: Isabel INFANTES via PA

The new rules will only apply where the money paid to the customer or paid by the customer is more than €2,000. There are also several exceptions for low-risk areas including lotteries, bingo, amusement machines and land-based poker.

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Under the act, the Gardaí’s Financial Intelligence Unit will have a wider remit to uncover suspicious transactions and will better be able to co-operate with other forces around the world. 

The new laws will also re-define who a “politically exposed person” is. Under current legislation, a “politically exposed person” is someone who holds political, judicial or other offices in another country. This new legislation means “politically exposed persons” now includes those who live in Ireland. 

What happens if a bank suspects fraudulent terror activity

If a credit or financial institution has knowledge or a suspicion of terrorist financing, it must immediately send a suspicious transaction report (STR) to gardaí and the Revenue Commissioners.

In the event that a customer is matched to either the EU terrorist lists or UN terrorist lists, the credit or financial institutions should file an STR immediately with the Financial Intelligence Unit in the Garda Bureau of Fraud Investigation and not carry out any service or transaction in respect of the account until the report has been made.

When the report is made, the gardaí can give direction to the credit or financial institution in respect of the account. There is also a legal obligation to immediately freeze that person or entity’s account.

How the new laws are changing the game

As part of fighting back against the funding of terrorism, Ireland brought in new laws last year. At the time, Justice Minister Charlie Flanagan said the laws will deter many people from engaging in the funding of terrorism – be that domestic or international.

He said: “We know that by targeting the proceeds of crime we can remove the incentive for the commission of acts of serious and organised crime, such as human trafficking, drug trafficking and fraud. That is why we make it a crime to help to disguise or transfer the origin of illegal gains. That is why we have set up bodies like the Criminal Assets Bureau to freeze moneys obtained through criminal activity. We know that these measures are very effective.

Internationally it is recognised that preventive measures also play an important role. In the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and before that in the Criminal Justice Act 1994, we have required gatekeepers such as banks and other businesses, which can be used for money laundering or terrorist financing, to take certain actions.

They are required to know their customers. They are required to monitor their transactions for suspicious activity. When they see something suspicious, they must report it.

Ireland’s Justice Minister says that money laundering and terrorist financing are cross-border phenomena.

“We have a globalised, open economy and criminals will exploit this to move proceeds from one country to another. For this reason the European Union has long had legislation in this area. Internationally, the recommendations of the Financial Action Task Force are applied by 35 member jurisdictions. The FATF monitors and evaluates compliance by those members.”

But funding terrorists and extremists is set to be an ongoing challenge for Ireland’s gardaí and justice system – one that they’re continuing to fight back against.

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