Overseas Terrorism in Canada, scams, intimidation, theft, blackmail

In 1996 ‘Gord’ — a sometime artist who found that a subsidized life on Ontario welfare rolls was sufficient to maintain his Bohemian lifestyle — saw that change was looming. The new Harris government was threatening to reform the welfare system and it was quite probable that he might have to work for a living again. Then a middle aged Tamil couple gave this young man an opportunity that was too good to be true. Any good scam demands a victim who hasn’t quite figured out that there is no such thing as a free lunch, and Gord certainly fit the bill.

Some scams, such as the incessant ‘You are recommended as a person of good character and I need your help to get $400 million out of Nigeria’ spam messages that bombard most internet users, are simple enough. This one was a bit more complex.

Gord was asked if he would like to have a free room in a house that had been converted into a series of rental accommodations. In return, he would collect the rent from the other tenants; he would also be registered as the owner of the house as far as the bank was concerned. The pair explained that for ‘tax purposes’ they couldn’t be seen as the owners of the house, so they needed him to act as an agent. The rental payments would be forwarded to the pair, who would then pay the mortgage in Gord’s name. Once Gord accepted this argument, he was easily talked into accepting a fake letter of reference and other documentation from a fictional software company indicating that he was making something like $90,000 dollars a year.

The realtor was another middle-aged Tamil, and together they arranged the purchase of the house and the mortgage from a prominent Canadian bank. Gord moved in, as did a number of other tenants and all seemed well. Three months after the deal was struck, the mortgage holder called — in that polite way they have — to inquire as to the whereabouts of this month’s payment. Startled, Gord called the realtor and the couple who arranged the purchase in the first place, but neither telephone was in service and, as he now realized, he had no idea of what their addresses — or real identities -- were.

The bank that was involved in this case has refused all comment, and Gord — who cooperated fully with their investigation — is now a chastened and wiser man. However, several points stand out: If the realtor and the deal’s instigators were operating with false identification, but they did pay the mortgage for a two months, it suggests that the scam probably involved several houses before it was time to leave with the profits (Gord was asked if he knew other people in his situation too). Moreover, the scheme might have only been truly profitable if the legitimate owners of the house -- or houses -- had been a party to it, and also used fake identification.

Canadian banks, like those everywhere, are truly reticent about those times when they have been deceived in the ways outlined above, but they will admit to losing a very conservative $1 million a year to cons and scams outside of credit card counterfeiting. The actual figure is probably somewhat higher than that. In discussing the housing scam with another Canadian bank branch manager, we were told of a small business loan his branch had been robbed of. The applicant had full documentation from Sri Lanka that detailed a successful mercantile career there, and now hoped to translate this experience to Canada. His credentials withstood scrutiny, his business plan was sound, and his credit rating seemed excellent. He was lent $40,000 and promptly disappeared — all of the client’s identification and past history turned out to have been fictional.

In both cases, we have only single source information about fraud, although it does seem reasonable to conclude, given the LTTE’s long experience with counterfeiting, that the proceeds were for their benefit. In any event, few criminals would work so hard for such returns without repeating their successes as often as possible, and so being eventually caught; while the resources displayed in these two instances strongly suggest that a larger network exists. Moreover, the supporters of the LTTE have a long history in document fraud and counterfeiting where people smuggling is concerned.

The ways of committing fraud are legion: Stolen and/or inferior goods can be substituted under well known brand-names and sold at a substantial discount, credit cards can be counterfeited, and sale coupons can be collected for redemption from producers by fraudulent outlets — all techniques that have been used in recent years by North American supporters of al Qaeda, Hizbollah and Hamas.

Stolen credit cards and debit cards have limited utility nowadays, as most consumers are quick to report their loss within a day or two. What has become more lucrative is the creation of forged cards — tied to an existing account — that can be used for up to a month before discovery becomes too likely. The tools and knowledge necessary to forge cards are not too difficult to acquire: What is more necessary is gaining access to account numbers and PIN numbers from existing cards.

The easiest way to get this data is to work in store where it is possible to use the cards of large numbers of consumers, and occasionally make a second swipe of a card and keeping the sales slip so that the account number can be copied and used for counterfeiting (a method that does not work for very long before being noticed by card providers). More sophisticated techniques can include installing a second camera near an ATM to read cards and pin numbers over the shoulders of users, installing digital taps (known as ‘CC Grabbers’) which intercept card data being sent over telephone lines when vendors seek payment authorization, or acquiring a ‘skimmer’ or ‘swiper’— a handy pocket sized magnetic card reader that can acquire all the essential data on a card with a quick swipe.

It is difficult to engage in these techniques in many commercial establishments, but gas-bars -- where a clerk can operate with little supervision and often out of sight from a customer inside his booth — are ideal places to pirate data. Restaurants where the waiters also handle payments can be useful if the waiter has a skimmer. Small businesses where all of the staff may be involved in copying data are also useful. There are tens of thousands of gas bars, restaurants, and small stores where a consumer cannot see every aspect of the transaction being made with his card, and all of these could be potentially misused if the retail clerk is sympathetic to a terrorist organization.

Skimmers, CC Grabbers and other techniques for stealing credit card information have been often used in Europe and the United States. Islamic fundamentalist terrorist groups have been commonly associated with this activity. Part of the core training for al Qaeda members in Afghanistan is alleged to have been in counterfeiting techniques.

Once a forged card is made, it is possible for the counterfeiters to inflate its value by sending in a forged check to inflate the balances in the real account it is based on, and then to use it to buy goods for resale — or even launder it in a casino by buying chips and cashing them in later.

Terrorist supporters have attempted to steal credit card information inside Canada. The Algerian Salafist terrorists Samir Ait Mohamed, Mokhtar Haouri and Said Araar were in the same Montreal-based al Qaeda cell as Ahmed Ressam. The group had many plans and ideas, only a few of which ever got close to fruition, but the trio proposed two ideas: Opening a store in Montreal to collect credit card information from buyers which could be used to finance other Fundamentalists in the area. They also attempted to find a Canadian passport office worker who could be induced to obtain genuine passports. Ressam was also advised by Haouri to help open a store that could be used for the same function.

A former LTTE assassin and member of the Tamil VVT street gang, Narinjan Fabian, was also arrested in October, 2001 as part of a multi-agency investigation into credit card forging. The raid on his apartment netted hundreds of cards — which could have cost banks more than $20 million had they entered circulation. Fabian’s set-up included CC-grabbers in combination with pinhole video cameras in a gas bar, and data from both was transmitted by wireless technology to a receiver hidden inside a parked car behind the gas bar.

A crackdown in 1993 on stolen and phony credit cards that had been used for bogus gasoline charges by Tamil and Somali gas station attendants resulted in 18 arrests. This was a simpler scam, and most of the cards had either been stolen from a mail sorting plant or from apartment mailboxes. The ploy was all gang related, and the plan had been to steal hundreds of thousands of cards eventually. It should be noted that at the time, Somali gang members in Toronto were also raising money for their clans in Somalia’s chaotic civil conflict.

Counterfeiting currency is another ideal terrorist moneymaker. As with involvement in narcotics, the terrorist can involve himself in this activity both to generate immediate capital for his own operations and also to undermine the economy of the nations he strives against. Probably the biggest and best-documented terrorist counterfeiter is Hizbollah, who have a long history of producing fake US dollars. The normal techniques of counterfeiting documents and currency — such as the use of scanner copiers with a resolution of 300 DPI (dots per inch) or more, or the use of digital press printer are becoming increasingly common, and are responsible for most of the forged currency usually seen in Canada. However, this is the sort of stuff that normally fools corner store clerks and will not survive a trip to the bank.

What makes Hizbollah’s currency special is the use of high quality Intaglio Presses — large, expensive machinery whose use is normally monitored by law enforcement and whose sale is normally restricted to national governments. These presses are normally used to print banknotes and high quality documents with all the highly refined features that used to guarantee real currency from being copied. Iran and Syria smuggled Itaglio Presses that had been bought for their own use into Lebanon for Hizbollah.

So far, Hizbollah had largely restricted its attentions to US currency, but Canada has been used as a conduit for counterfeit dollars from the Middle East to enter the US. In the mid-1990s, counterfeit US $100 bills would appear in the hands of members of the Lebanese underworld in Montreal, and would enter the US via the Akwesasne Reserve — which was then a pipeline for a massive two-way flow in contraband over the US-Canadian border.

The same printing and copying techniques used for currency can also be used for passports and key identity documents.

Three suspect Islamic Fundamentalists were arrested in northern Alberta and extradited to the United States in December, 2001; the trio faced charges for a variety of offences related to forgery and fraud. Emad Jamal Hassan, Yousef al-Amleh and Mohammed-khair Salah were wanted for US $1 million in fraudulent food-stamps claims after forging baby-formula labels and selling substandard products instead, while claiming to have sold the higher quality bogus product to needy consumers in return for foodstamps. One of them had also been convicted by a US court for defrauding a bank of US $63,000 in forged cashiers’ cheques.

The case of Michael John Hamdani is also instructive. While not a terrorist, Hamdani acted as an informant on terrorism in order to win a plea bargain for numerous counterfeiting offences in Canada and the US. In seven years since arriving in Canada from Pakistan in 1994 (predictably making a refugee claim, a tactic repeated some five times since in Canada and the US), he has repeatedly been arrested while in possession of false or blank US, Canadian, Indian and Pakistani passports, fraudulent drivers’ licenses, traveler’s cheques, and other identity papers. Predictably, most of his information was fabricated and of little use. What makes his case interesting is the ease with which he was able to set up sophisticated counterfeiting operations with openly available equipment. It is also worth remembering that authorities in two countries have spent hundreds of thousands of dollars in investigating and deporting the man, only to see him successfully return to North America time and again.

Canada, to our shame, is also home to a number of telephone and internet fraud operations that plague consumers in our own country as well as throughout the US and Europe. Apparently, the industry is large enough to generate billions of dollars in annual profits and has attracted a wide variety of criminal elements. So far, it is not known if any of these operations are being run by the supporters of a terrorist group, but given the lucrative nature of the business, it is probably just a matter of time.

In Western societies that offer full social support for the unfortunate and indigent, it is inevitable that the welfare system will be abused. Like many other nations, Canada offers a full package of social services, including welfare, to those who have claimed refugee status here. Opportunism was inevitable: In one recent case, Sudanese and Pakistani students in US were getting dropped off on the approaches to Canadian customs posts, so that they could make an undocumented refugee claim here, become entitled to welfare and get the cheques forwarded to a Canadian address which would cash the cheques and wire the money (less a fee) back to the US. While these students are not terrorists — although it is quite likely that some approve of al Qaeda — terrorists have been known to abuse our welfare system too.

Large numbers of al Qaeda members in Europe have lived on welfare, often while also running criminal activities or establishing business enterprises of their own. Mohamedou Ould Slahi, an al Qaeda member who was recruited as a student in Europe, lived in Montreal for two years after fleeing Germany where he was wanted for welfare fraud after receiving 7,500 DM even while drawing a salary of 40,000 DM from an electronics company. Ahmed Ressam received welfare payments, while also living as a petty criminal, in Montreal during the 1990s.

Perhaps one of the most spectacular Canadian uses of the welfare system to fund other peoples’ wars came as a result of the Somali civil conflict of the early 1990s. Canada soon became a destination of choice for Somalis fleeing the country, and Canadian immigration officers and social workers in the Toronto area were often to find that many of them had a precise knowledge of all their entitlements before they landed in Canada. Moreover, at that time, the Province of Ontario (then under an NDP government) was operating with a very relaxed attitude towards new claims, accepting most of them at face value.

It soon turned out that many Somalis soon started making multiple claims, usually by traveling into the United States and then turning around and making a new refugee claim under an assumed name on re-entering Canada. However, few of these multiple claims were for personal benefit, as money from social welfare payments was diverted to Africa to buy arms and supplies for clan militias back in Somalia. To compound matters, the favored wife of the most notorious Somali warlord, Mohammed Farah Aideed (who was already working with al Qaeda in 1993), was living in London, Ontario with four children on welfare, when not traveling back to Africa to accompany her husband on ‘state’ visits. When challenged on this, she predictably accused the Canadian reporters who were trying to interview her of being racist.

Intimidation

One of the signal characteristics of organized crime is a willingness to coerce those who must deal with them into inactivity. Perhaps one of the baldest statements of the concept comes from the cocaine cartels of Colombia, where local police forces were offered the choice "lead or silver"; in short accept the silver or receive the lead. It does not take much to demoralize police officers, witnesses, or politicians under these circumstances as numerous historical examples illustrate.

A starker choice is offered to those who would provide testimony against organized crime figures; if you talk, you must accept the consequences. In societies where entrenched criminal institutions have survived for a long time, people can be terrified into codifying their behavior. The Southern Italian code of ‘omerta’ is an example of this, and it has taken a large number of dedicated and courageous police officers and judges (many of whom were murdered in the process) to convince the citizens of Palermo in Sicily that it was right and safe to break the traditional cultural code of silence and non-cooperation with authorities.

Similar processes have occasionally been observed in North America — as can be attested by the many clients of the FBI’s "Witness Protection Program" in cases concerning the Mafia or outlaw motorcycle clubs. Over the years in Canada, it has become necessary to occasionally guard Crown prosecutors, key witnesses, and even — at times — the jury. This has been especially true in cases related to bikers, but also in cases related to terrorism.

Intimidation became a feature of Sikh life in the early 1980s for several reasons. The brutality employed by the Khalistan militants in seeking control of Canadian temples was impressive, as was the 1982 shooting inside an Ontario Supreme Court, when Kuldip Singh Samra killed two men and wounded another (Samra was one of the few Canadian Sikhs to violently oppose the militants) when a case went against him. Tensions rose inside the Sikh community when it became clear that both sides were capable of committing violence, and it became clear that voicing a public opinion could be dangerous. Added to this is a traditional cultural reticence in dealing with non-Sikhs over troubling issues — an instinct developed when the Sikhs were a much-persecuted minority during the time of the Gurus who shaped their faith.

Intimidation is still a part of life for those offering to act against the BKI in Canada. In December, 2002, Sukhminder Singh Cheema decided to withdraw from the case against the Air India Bomber after reporting that he had been receiving threats ever since offering to testify against them. The Sikh journalist also decided not to cooperate with another investigation into the 1988 attempted murder of the late Tara Singh Hayer for the same reason.

Some of the Police officers who have worked on the Tamil Task Force in the 1990s have wondered about their safety. One RCMP officer in a hospital for heart surgery was surprised to receive a cheeky ‘get well’ card from one of the subjects of his team’s investigations. Metro Toronto police officers were surprised to see a couple of other Tamils strolling through their police station parking lot, writing down the license plates of the cops’ own automobiles — an act that did not seem so much as an act of intelligence gathering as a means of saying ‘We can find where you live’.

Two of Canada’s leading reporters that have specialized on particular terrorist groups; Stewart Bell of the National Post and Kim Bolan of the Vancouver Sun; have been threatened with physical harm because the quality of their work. Bell, who has done a superlative job in reporting on LTTE activities, was also subjected to a series of smear attacks from anonymous ‘sources’ inside the Tamil community — who invented and passed rumors that the reporter had availed himself of child prostitutes while visiting Sri Lanka. While the LTTE has yet to launch any lethal attacks in Canada, Bolan is well aware of the much deadlier reputation of the Sikh militants here — although this has not prevented her from continuing her excellent coverage of their activities.

While the Tamil Tigers had, until the September 11^th attacks and the recent version of the Palestinian intifada, launched more suicide attacks than the combined total of all other terrorist groups in the world, they have never launched such attacks outside of Sri Lanka and southern India. However, two VVT gang members doused themselves with gasoline outside a Toronto court in 1996, with the intention of entering the court, embracing a veteran Toronto police officer of the anti-gang squad, and setting a match. Fortunately they were stopped before kindling their plan.

Robbery and Auto Theft

Banks, armored delivery trucks, and payrolls have been irresistible targets for generations of terrorists. Joseph Stalin made a reputation for himself as a young Bolshevik with a series of bank robberies; Latin American "revolutionaries" of the 1960s frequently engaged in it, and one of the last actions of the US "Weathermen" was to hit an armored car in a holdup. One of the biggest bank robberies of all time was staged as a joint operation by two unlikely partners — the PLO and the Lebanese Christian Phalange — called a halt to their fighting to stage a break-in in the vaults of the British Bank of the Middle East in Beirut in January 1976. The robbery may have netted as much as $100 million (records were destroyed as the job was finished). It is also interesting that an expert team of safecrackers, presumably from the Sicilian Mafia, were also called on for their particular talents.

Bank robbery is not unknown in Canada, but none of it appears to have been committed on behalf of a terrorist group. Yet the threat always exists. According to a indictment from the US Attorney’s Office in New York released on November 16^th 2001, Ahmed Ressam and Samir Ait Mohamed also planned to commit a series of robberies while armed with hand grenades and submachine guns, in order to finance acts of terrorism in North America. While Ressam had eked out a living with petty theft in Montreal in the 1990s, this would have been far beyond his usual activities of swiping luggage from tourists.

Terrorists have also had a long history of stealing cars — usually commandeering them for their own purposes. According to the much traveled-American columnist P.J. O’Rourke (in an essay on Northern Ireland subsequently reprinted in his 1991 tour de farce Give War a Chance), the most common reported crime in Londonderry was automobile theft. The first task of the police was to determine if the theft was for ‘political’ reasons or was the work of ‘ordinary decent criminals’ instead. If the theft was for political reasons, it usually meant that the car would turn up in a few days after having been used by either the Protestant or Republican groups for a quick reconnaissance on a potential target or a fast smuggling run. Criminals were more likely to strip the car down for its parts or sell it somewhere else.

Organized automobile theft can produce respectable profits, and some terrorist organizations have been quick to capitalize on this industry as well. One new activity is to steal luxury automobiles and SUVs, and then ship them overseas. Hizbollah leaders, according to the RCMP, ride around in vehicles that have been stolen from North America by Middle Eastern criminal groups that contribute about 10% of their earnings to the organization. Stolen cars might be stripped for parts in ‘chop-shops’ in southern Ontario or Quebec, or they might be transferred to a shipping container under a false passport and sent overseas from the cargo container port in Montreal and Halifax. Other stolen cars — and missing construction equipment — get sent to Asia by way of containers from Vancouver, but Asian gangs service this market and are without known connections to any existing terrorist group.

Blackmail and Protection Rackets

It is difficult to separate ‘war-tax’ subscription systems and other quasi-legal fundraising mechanisms (discussed in Chapter Four) from blackmail and protection rackets. For a start, when terrorists evolve into organized criminal societies, one of the primary motives for doing so may be the attractiveness of the collections system. Any attempt to separate a ‘war tax’ from a straightforward protection racket could be doomed if attempted in a courtroom, as the exact boundary between the two could be extremely difficult to define. However, the questions of motive and intent leave some room for inquiry.

"Saudi businessmen and wealthy Palestinians [and members of the Saudi royal family] have reportedly made large contributions to various terrorist groups. Unlike Bin Laden’s voluntary contributions, these contributions appear, at least in some circumstances, to have been given in response to blackmail or as a subtle form of protection payment."

The feeling that some Saudi figures have made contributions to al Qaeda for ‘protection’ for themselves and their businesses was repeated by Vincent Cannistraro, a former chief of Counter-terrorism operations for the CIA, in his testimony to the House of Representative Committee on International Relations on October 3^rd, 2001. Cannistraro believes that most of the contributions from these sources were voluntary, but it may be that it is a convenient and polite diplomatic fiction to describe the money paid to al Qaeda by members of Saudi Royal family as "protection money." The Saudi Royal family apparently donated as much as $300 million to bin Laden’s organization.

While the ‘War Tax’ system was operating in Canada until 2002 in the Tamil Community, at times the system did have the flavor of a collections racket. Not all contributors volunteered their payments and there was a strong hint of coercion. If the peace process does continue to stumble forward in Sri Lanka, it will be interesting to see if the War Tax system outlasts the conflict that created it. The easy money generated by such a system appears to be one of the most powerful inducements to the perpetuation of a terrorist movement after the cause that allegedly created it has vanished.

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John Thompson is President of the Mackenzie Institute which studies political instability and terrorism. He can be reached at: mackenzieinstitute@bellnet.ca

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