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


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.

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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.