When police raided a London mosque three years ago in their pursuit of a radical Islamic preacher, they found forged passports, laminating equipment, and bundles of cash.
The haul, details of which were only recently made public, speaks volumes about a remarkable evolution in the funding of terrorism. What was once a global network financed by elusive donors and administered by Al Qaeda "fund-managers" has now fragmented into a constellation of franchises that sustain themselves primarily through crime.
This, experts say, is partly a result of the vigorous multinational effort since 9/11 to break up the Al Qaeda network and stanch the cash flows that sustained terror attacks. But it's also due to the reduced cost of mounting terror attacks, they say.
Estimates suggest that the 9/11 attacks may have cost as much as $500,000 to stage. By contrast, the Madrid bombings of 2004 are believed to have cost no more than $15,000, and last year's London attacks perhaps $2,000.Four bombs, four rucksacks, some train tickets, a little gasoline, and a few phone calls.
"Terrorist financing is very different today," says Loretta Napoleoni, author of "Modern Jihad: Tracing the Dollars Behind the Terror Networks." "Five years ago, we had large movement of funds which went through the international financial system.
"Now we are just talking about four friends who raise £1,000 to stage an attack," she adds. "The unit cost of terrorist financing has crashed to the floor. They [terrorists] don't need another 9/11. They can do a small thing and create the same hysteria."
But those who track terror financing haven't adjusted their strategies accordingly, says Gus Hosein, an antiterrorism expert at the London School of Economics: "What we are seeing is terror done on the cheap and yet all the regulations to monitor financial transactions and crack down on this are looking for larger sums."
The 9/11 attacks startled the world into action to combat terror finance. More than 130 countries have signed on to a UN convention requiring legislative action and financial supervision to spot the dirty money. Scores of charities and individuals have been blacklisted both by the UN and by individual jurisdictions.
Hundreds of millions of dollars of assets have been frozen. Many countries set up dedicated terrorist finance units to coordinate action, like the US Treasury's Office of Terrorism and Financial Intelligence. Some passed laws to make financing terrorism a specific crime.
Many of the ideas emanated from a set of recommendations issued by the Paris-based think tank Financial Action Task Force [FATF], in October 2001.
Vincent Schmoll, a senior policy analyst at FATF who says the recommendations have taken on a certain "moral authority" with countries that might otherwise drag their heels, lists the main areas where progress has been made: freezing assets, notification of suspicious transactions by financial institutions, and growing efforts to tackle the informal money transfer system, known as hawala, which operates below the official financial system's radar.
But there have been problems with some initiatives. Banks desperate to avoid a black mark for letting suspect money through the net have zealously filed their "suspicious activity reports," resulting in an avalanche of paperwork for overwhelmed financial investigators. Some estimates put the number of filings in the US alone at 13 million a day.
Islamic charities, meanwhile, complain bitterly about being singled out for attention. One London-based charity that helps fund Palestinian social projects, Interpal, protests that it was blacklisted by America even though it had been cleared in Britain. "It means we cannot take any donations in US dollars, which is obviously a major obstacle to getting funds," complains one employee.
While charity forms an important pillar of the Islamic faith, intelligence chiefs have long suspected that alms sometimes end up financing terrorists.
Despite the flurry of activity, however, actual convictions for financing terrorism have been few and far between. Last September, a Spanish court sentenced Imad Yarkas to 27 years for helping fund the 9/11 attacks; two months earlier, Yemeni cleric Mohammed Ali Hassan al-Moayad was sentenced to 75 years in the US for conspiring to provide financial support to Al Qaeda and Hamas.
The reason for the dearth of other convictions may be that the authoritieschoose to "follow the money," rather than haul in suspects, says Bill Tupman, a professor at Exeter University in Britain who has studied terrorism for decades.
While the 9/11 commission said that tracking Al Qaeda financing had proven "a very effective way to locate terrorist operatives and supporters and to disrupt terrorist plots," Professor Tupman explains that intelligence services face a difficult choice of whether to confiscate the money and bring a criminal case, or follow the cash and see where it ends up.
He adds that the lack of criminal convictions may also be due to the fact that terror funding is a complex jigsaw, and no one agency holds all the pieces. Banks may have one piece, counterterrorist units another, but others may be held by partners overseas, requiring better international cooperation. "There is plenty of information," says Tupman, "but then there was plenty of information at the time of 9/11 ... the problem is putting it all together."
If the problem is putting it all together, the solution, according to Britain's Chancellor of the Exchequer Gordon Brown, lies in unified action. Among a series of measures outlined last month was a plan to bring national experts together in a unit that would work at "cracking" terror finance in the same way that wartime mathematicians collaborated in cracking the Nazi Enigma code.
But while international efforts focus on the big money that helped finance 9/11 and establish terror cells in Europe, Al Qaeda has moved on. Experts say terrorists are no longer waiting for Osama bin Laden's moneymen to dole out the cash. Instead they are, according to Professor Wilkinson, "accumulating funds themselves for attacks through petty crime, ID theft, fraud of many sorts, money laundering, and smuggling of money and commodities across porous borders."
Tupman says the metamorphosis mirrors that of groups such as Irish republicans and South American narcoterrorists.
"If you are going to survive, you have to create income streams," he says. "And if you stay in the legal world, it's confiscated, so you end up following the examples of people who run illicit businesses." The alliance between organized crime and terrorists is increasingly profitable, he says. But successful terror cells will always need to launder money to find somewhere safe to park it until it is needed, perhaps buying property for cash or investing in trusts that yield an income.
The trick for the authorities is to snare the dirty money at the point that it tries to enter the legitimate system. Those points should be the frontline in the war on terror, says a UN expert, who spoke on condition of anonymity because of continued involvement in the affair. "It's where you incorporate companies, it's with the bankers and fiduciary trusts and lawyers that help you mutate these things on a weekly basis, buying assets that are portable, that you can move easily, so you always get money wherever you go."
But for open societies that pride themselves on freewheeling financial centers, snaring the villains without hindering the operations of the innocent can be difficult. Are cities like London, whose easy-come-easy-go attitudes bring boundless international capital, going to sacrifice financial freedom to catch a few money launderers? Napoleoni thinks not.
"After all," she says, "you can open a bank account in Turkey and use a cashpoint anywhere in Europe to withdraw the funds. "How are you going to stop that?" 
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