Faisal Shahzad used "Hawala" System to Get Money, Sources Say

By: CBS News Investigates
Topics: News

CBS/AP

Law enforcement sources tell CBS News that investigators have determined that Times Square bomb suspect Faisal Shahzad used the "hawala" system in plotting the attack, concealing the movement of money by using couriers and bypassing banks or other financial institutions.

The hawala system is a courier system used by terrorists and criminals to conceal the flow of money without raising red flags among law enforcement.

It's a type of informal banking system frequently used by family and tribes - at times legitimately. There are numerous ways to do it. One is to have couriers come to the United States carrying less than $10,000 cash to remain under the amount that must be declared at U.S. Customs. That courier usually gives the cash to a "hawala dar," a person who controls the money - who then gives it to the intended person.

Complete Coverage: Terrorism in the U.S.

It can also be used as an informal money-wiring system. For example, if you wish to give a relative $200 in New York and you are located in Pakistan, you may give it to a family member in Pakistan who knows someone in New York. The family member in Pakistan tells the person in New York that it's okay to give the your relative $200 because his relative in Pakistan "gave me the $200 and I have it in hand."

Law enforcement sources said it's unclear whether Shahzad used the hawala system in part or totally in obtaining financing for the attack, including the purchase of the SUV he allegedly packed with explosive material and parked in Times Square and the purchase of his ticket to Dubai from Kennedy Airport to escape authorities.

In a related development, U.S. federal agents conducted a series of raids in the Massachusetts, New York and New Jersey, arresting three people in connection to the Times Square bomb investigation.

Law enforcement sources tell CBS News the raids are aimed at possible money remitters, though authorities have said it's possible those detained had passed money to Shahzad unwittingly.

As investigators probe a possible link between Shahzad and the Pakistani Taliban, one of the critical aspects is confirming the flow of money - who handled the money, who were the facilitators, to determine if they were associates or members of the Pakistan Taliban.

So far, that analysis is leading investigators in the direction of the Pakistani Taliban. Investigators are continuing to focus on the identities of those individuals with the help of Pakistani intelligence and law enforcement.

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by bankersvox May 14, 2010 11:05 AM EDT

Does anyone recall that the NYT exposed the Bush's adminstration use of Banks to catch these Islamic Terrorists, by following the cash ? The NYT said that this was an invasion of privacy. So, naturally, the bad Islamics stopped using the banks, and this is the result. where is the apology from NYT and LA times , running their own self righteous investi. story, harming all of our safetly >?

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by dd_us May 14, 2010 1:07 PM EDT: "Much hand-wringing about nothing."
Only an ISI agent says that of Terrorists acts in non-Muslim countries.

"Terrorism" is simply an excuse to keep the American public docile and afraid."
Yes, that is the aim of Al Qaida. Taliban, TTP, LeT, LeJ and the rest.

Even the 'fundamentalist Sunni dictator' the Punjabi General Muhammad Zia-ul-Haq,
has said, "Once the mind is terrorized, victory is already achieved!".

by wyodutch May 14, 2010 8:29 AM EDT

Much hand-wringing about nothing. "Terrorism" is simply an excuse to keep the American public docile and afraid.
.
How many were hurt by the uncooperative SUV? NONE
.
How many were killed by the uncooperative SUV? NONE
.
Meanwhile, in our nations capitol - - -
.
Washington Post - March 31: Three people were killed and at least six others injured when a gunman sprayed bullets into a crowd from a car in the nation's capital last night. DC police arrested three people after a chase that left four officers injured, the Washington Post reports. No motive has been established for the shooting, although police sources say it may be connected to two killings in southern DC earlier this month.
.
The victims were clustered in front of an apartment building and witnesses compared the outbreak of gunfire to a war zone. "All I saw was bodies dropping," said one local resident. "It was like Vietnam." Police sources believe an AK-47 was used. The incident has claimed the largest number of victims of any shooting in the capital in at least 15 years. A tenth gunshot victim was found a few blocks away, but police aren't sure if he was shot by the same assailants.

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by scoutsout80 May 14, 2010 9:53 AM EDT: You just don't get it that there are radical extremists that want to kill you.


by Harden_Tar May 14, 2010 8:11 AM EDT: Sounds to me that hawalas are an unregulated and illegal financial operation in this country. You can't move money around like that. The IRS needs to know. Let's put a few thousand US government rules and regs in place here. Maybe a tranfer fee. C'mon feds, this is ripe for the pickins.; Reply to this comment


by LIBERALS-are-HYPOCRITES-2 May 14, 2010 1:07 AM EDT: TARP/Stinulus $$$; Reply to this comment


by Globalopinion May 13, 2010 7:24 PM EDT: The Hawala system is not religion based, it is a simple alternative wiring system designed for countries that have no banking, or restrictive money transfer(Communist use to restrict wiring outside the country) or to reduce the bank wiring fees (like sending 100$/month to support family)
Western Union Money transfer is very similar to Hawala, and very popular in most of 3ed world countries, Hawala is normally cheaper.

Hawala can be use illegally outside the low, or to cover for some money transactions, but that is not why it is wildly use, and people who work on it, have no way to know where the money will be used, just like when you take your money from the ATM.
In some countries like Gulf/Dubai, Hawala is regulated and consider just like banks, and all transactions are traceable.; Reply to this comment

by mitcheisenstein May 13, 2010 6:40 PM EDT

The hawala system is kind of like the system that investment banks use to send money all over the world in an instant on margin, using yours and my money as collateral

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by OttoResponder May 13, 2010 7:09 PM EDT: Yeah, it's a practice that goes back centuries and isn't necessarily a "terrorist" thing. http://en.wikipedia.org/wiki/Hawala


by sean56v May 13, 2010 6:07 PM EDT: Faisal just needs his bag for picking apples and peaches. The federal prison bakery needs fruit for pies and tarts. He is required to supply the bakers with produce for the next twenty years.; Reply to this comment


by maistir May 13, 2010 3:58 PM EDT: mispellin, sorry: hawala; Reply to this comment


by maistir May 13, 2010 3:56 PM EDT: It's a safe bet that the "fixers" in the U.S. who arrange such money transfers and take a cut for doing so are also engaged in tax evasion, at the same time that they profess to be good citizens. They will even try to defend the halawa system as a "religious" practice. They sneer at our open society.; Reply to this comment


by dd_us May 13, 2010 3:20 PM EDT: Hawala rackets provide illegal transfer of money mainly used by smugglers who deal with any contraband, like drugs, gold, and now arms & explosives. For the last couple decades, the Hawala money racket in South Asia is controlled by underworld bosses like Dawood Ibrahim, who are now sheltered by Pakistan's Military & ISI.

Originally Dawood controlled operations in Mumbai. Now he has offices in Karachi, Dubai, Abu Dhabi, & Saudi Arabia. He has palatial homes in these places, but mainly & openly resides in the Karachi area. After India's anti-terrorism squad (ATS) started investigation & is a wanted man, Pakistan's ISI gave him safe haven & he ran of to Pakistan.

In the serial train blasts in Mumbai more people were killed than in the later commando style attack on Mumbai's hotels by Kasab & other Pakistani terrorists. India's ATS suspects that dawood, the Karachi-based don may have played the role of facilitating the transfer of Inter-Services Intelligence (ISI) money to India.

Highly placed sources in the ATS says that the money may also be routed from Karachi to Islamabad and subsequently to a border region in Pakistan.

From Pakistan, the money was routed to Dubai and then to Saudi Arabia & to India. The money was then siphoned off to hawala operators in Mumbai, who handed it over to the terrorists, a source said.

Usually, a hawala operator earns anywhere from 300 to 400 per 100,000 of transaction. In the Mumbai trains terror operation, it was found that the commission paid was as high as 450 per 100,000.; Reply to this comment