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Copyright 2002 The Washington Post

The Washington Post

August 12, 2002, Monday, Final Edition

SECTION: A SECTION; Pg. A01

LENGTH: 2304 words

HEADLINE: Small Scams Probed for Terror Ties; Muslim, Arab Stores Monitored as Part of Post-Sept. 11 Inquiry

BYLINE: John Mintz and Douglas Farah, Washington Post Staff Writers

BODY:

Authorities are quietly investigating more than 500 Muslim and Arab small businesses across the United States to
determine whether they are dispatching money raised through criminal activity in the United States to terrorist groups
overseas.
The investigation into Arab businesses, many of them convenience stores, is part of a sprawling inquiry launched
after Sept. 11, when law enforcement agents dramatically stepped up scrutiny of small-scale scams that they think are
generating tens of millions of dollars a year for militant groups, federal officials said.
The criminal activity includes skimming the profits of drug sales, stealing and reselling baby formula, illegally
redeeming huge quantities of grocery coupons, collecting fraudulent welfare payments, swiping credit card numbers and
hawking unlicensed T-shirts.
Some of the criminal rings have operated in this country for decades. But until recently, law enforcement agencies
paid only scant attention to the schemes because they are difficult to crack and time-consuming to prosecute. Since the
Sept. 11 terrorist attacks, however, they have deployed hundreds of investigators to pursue the plots.
A number of law enforcement task forces involved in the crackdown are searching for similarities in the
convenience stores' financial practices and money transfer methods to determine whether their activities are centrally
directed.
As part of the overall effort, a U.S. Customs Service supercomputer program has been diverted from analyzing the
flow of drug money to tracking terror funds. That effort has led to raids on Pakistani operators of jewelry kiosks in
seven states, authorities said.
"It wasn't until after September 11th that we understood the magnitude of the [terrorist] fundraising from our own
shores," said John Forbes, a former U.S. Customs Service official who directed a financial crimes task force in New
York. "We were always looking to catch the big rats" in terror financing, he added. "But in looking for rats, thousands
of ants got by."
Investigators suspect that some of the money has gone to Palestinian groups that use suicide bombings to kill
Israeli civilians, including the Islamic Resistance Movement, or Hamas, and the Popular Front for the Liberation of
Palestine, federal officials said.
Senior U.S. officials said they are concerned that the inquiry might be seen as ethnic profiling but are simply going
where leads take them.