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Europe
Fraud pays for al-Qaeda in Europe
2004-06-15
Counterfeiting, forgery and credit card fraud have become the financial backbone of numerous individual terrorist cells linked to al-Qaeda in western Europe, according to intelligence services across Europe and central Asia. Fake documents, credit cards and other forgeries are being used to provide extremist groups with new identities or to be sold at a premium to criminal gangs.

Interpol figures indicate that counterfeiting may now be more profitable than drug-trafficking in western Europe. The organisation believes "there is a significant link between counterfeiting and terrorism in locations where there are terrorist groups," Ronald Noble, secretary-general of Interpol, told reporters in Brussels last month.

According to the agency, earnings from counterfeiting and drug-trafficking may amount to 10 for every 1 invested. But fake goods may be easier and more economical to transport - 1kg of pirated compact discs is currently worth 3,000 in western Europe, while a kilo of cannabis resin is valued at 1,000, according to Interpol. The penalties for trafficking drugs are also higher than those for counterfeiting.

"Al-Qaeda is rethinking aspects of its modus operandi," says a senior intelligence officer. "But it would be wary of dealing with a criminal network that was not their own people. The Islamists are also alert to law enforcement, and aware that criminal networks can be infiltrated."

But supporting a terrorist network is expensive. According to Mr Noble, 10 per cent of al-Qaeda’s estimated $30m-$50m annual expenditure in 2001 was used to finance attacks. The rest was used to maintain the terrorist network. US officials now put al-Qaeda’s annual expenditure at about $10m (8.3m, £5.5m).
Which is why closing down all the Islamic charities isn't enough -- $10 million isn't that much money to raise.
Mr Noble told a US congressional committee last July: "Intellectual property crime is becoming the preferred method of funding for a number of terrorist groups. ... In the case of terrorist groups who resemble organised crime groups, counterfeiting is attractive because they can invest at the beginning of the counterfeiting cycle and extract an illicit profit at each stage of the counterfeiting process - from production to sale - thus maximising returns," Mr Noble said.

Security services in several European countries say that individuals arrested for alleged links to al-Qaeda are often caught with fake documents. When Dutch police raided a house in Rotterdam just after the September 11 2001 attacks, they discovered extensive forging equipment and false passports. At his trial on charges of belonging to the extremist Takfir w’al Hijra group linked to al-Qaeda, Rabah Idoughi, an Algerian, admitted to police that he was a forger but said he provided documents for illegal immigrants.
"I'm just a simple forger!"
He was acquitted late in 2003 of extremist associations, but jailed on forgery charges after police evidence substantiating the more serious charge was dismissed on technical grounds. However, the prosecutor, Theo d’Anjou, told the court that Mr Idoughi "made up part of a criminal organisation that ran a sort of business where fundamentalist Muslims could come to get false passports."
Posted by:Dan Darling

#9  plus, less bugs in music CD's than Windows Install CD's - less angry customers
Posted by: Frank G   2004-06-15 8:29:11 PM  

#8  You have a future in finance OG.
Posted by: Shipman   2004-06-15 8:19:22 PM  

#7  Yeah, I assumed music: Greater demand, more legit product out there (the better to hide the pirated stuff), more legit outlets (the better...). Somebody peddling music CDs at a street fair would probably go unnoticed, notso someone with a bunch of Windows install discs! While you could get more per piece for software, it would be hard to sell as many, and harder to stay unnoticed.
Posted by: Old Grouch   2004-06-15 8:12:15 PM  

#6  Wait a second... Old Grouch were you assuming music CDs? If it were software maybe the numbers add up to the 3000...
Posted by: Shipman   2004-06-15 5:07:15 PM  

#5  Think you guys are right... if you remove the baksheesh premium it might be way more lucrative.
Posted by: Shipman   2004-06-15 5:05:42 PM  

#4  And if you know of a country with a cooperative government that will look the other way (cough *China* cough), you can arrange for some "special production runs" at otherwise legit plants, which can make for copies that are damned difficult to distinguish from originals.

Which is just one more reason why China needs to be viewed as the real international terrorist. Islam may be more conspicuous and violent, but China is the real threat to world peace.
Posted by: Zenster   2004-06-15 2:39:06 PM  

#3  "1kg of pirated compact discs is currently worth 3,000...? ... I think they got the numbers screwed up..."

*Grabs postal scale*
Lessee... one CD (by itself, no jewelbox) = c.a. .6 oz ... 16 to the pound ... 2.2lbs/kg ... invert ... hokay, about 59 cds/kg. Retail price in Europe, $21 - $23 (including VAT): so say about $1300 gross, if sold at retail. (But if I was a pirate, I'd be injecting them into the distribution chain ahead of the retailers or selling them at open air markets or swap meets. Best you could hope for that way would probably be 50% of retail, $600.) So if Interpol says 3,000 euros that's high. (Who gave 'em their figures, the RIAA?)

Still not bad for something that only costs pennies to produce and doesn't automatically scream "illegal" the way drugs do. And if you know of a country with a cooperative government that will look the other way (cough *China* cough), you can arrange for some "special production runs" at otherwise legit plants, which can make for copies that are damned difficult to distinguish from originals.
Posted by: Old Grouch   2004-06-15 12:35:05 PM  

#2  1kg of pirated compact discs is currently worth 3,000

These would be the original masters? Damn how much does a set of windoz xp weigh?

I think they got the numbers screwed up. The dope sounds about about right *koffi* but the cd counterfeits price gotta be way off base.
Posted by: Shipman   2004-06-15 10:39:26 AM  

#1  However, the prosecutor, Theo d’Anjou, told the court that Mr Idoughi "made up part of a criminal organisation that ran a sort of business where fundamentalist Muslims could come to get false passports."

Weren't the Madrid atrocities sufficient to make a statement like the one above set off all sorts of alarm bells in that courtroom?

What will it take for Europe to realize the threat being leveled against them? One can only fear it will require a horror far worse than our own 9-11 to make them take notice. It is quite possible that they shall get their way in this matter yet. Europe's lethargic response regarding Iran's obvious attempt to fabricate nuclear weapons may finally bring about such a belated and catastrophic awakening.
Posted by: Zenster   2004-06-15 1:35:01 AM  

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