The Financial Landscape of Terrorism: Understanding ISIS’s Funding Methods in the United States

The Use of Unwitting Money Services Businesses (MSBs)

ISIS has been exploiting the financial system in the United States by using unwitting Money Services Businesses (MSBs) to fund their activities. Here are some key points:

• Collecting and consolidating donations: U.S.-based ISIS supporters collect and consolidate donations within the United States, making it difficult for financial institutions to detect suspicious activity.
• Transferring funds outside of the United States: These funds are then transferred out of the country using unwitting MSBs rather than banks.

Limited Use of Virtual Assets

While virtual assets are increasingly being used for financial transactions, their use by ISIS remains limited in the United States.

Indirect Relationships and Shell Companies

ISIS financial facilitators are creating complex networks to move funds raised in the United States. Here are some key points:

• Indirect relationships between U.S.-based supporters and ISIS operatives: The infrequency or inconsistency and small dollar amounts of these donations make it challenging for financial institutions to detect this activity proactively.
• Use of shell companies: Shell companies around the world are being used to create layers between U.S.-based supporters and ISIS, helping transactions circumvent monitoring by financial institutions.

Case Examples

Several case examples highlight the challenges faced by financial institutions in detecting and preventing terrorist financing activities:

• Bangladeshi husband and wife sentenced for supporting ISIS: A Bangladeshi husband and wife were sentenced for conspiring to provide material support to ISIS.
• Individual pleads guilty to attempting to support ISIS and Al-Nusra Front: An individual pleaded guilty to attempting to provide material support to ISIS and Al-Nusra Front.
• Forfeiture actions against cyber-enabled terror finance campaigns: A series of forfeiture actions dismantled several cyber-enabled terror finance campaigns supporting ISIS, AQ, and HAMAS.

Conclusion

The financial landscape of terrorism is complex and constantly evolving. The use of unwitting MSBs, limited virtual assets, indirect relationships, and shell companies make it challenging for financial institutions to detect and prevent terrorist financing activities in the United States.