The Al Capone Model of Anti-Terror Policing

AL CAPONE HAD BECOME a celebrity criminal by 1931. Everybody knew what he was up to: his litany of offenses included murder, bribery, and running illegal breweries. But the government would have had trouble proving Capone's guilt beyond a reasonable doubt for his most notorious activities. Instead, it charged him with tax evasion, prompting the incredulous mobster to claim, “The government can't collect legal taxes from illegal money.” Capone proved to be wrong, and he entered an Atlanta prison on May 5, 1932. His conviction for tax evasion is the most famous example of a model that law enforcement adopted to combat the unique problem that the mob posed–a model that is now being used address the threat of terrorism.

The government knew that convicting mobsters for their most serious offenses was difficult for a number of reasons, including omertá (a code of silence). When Capone was charged with tax evasion, it signaled that law enforcement's top priority was neutralizing mob leaders and their activities rather than winning the heaviest sentence. Fortunately for prosecutors, the investigation of mobsters would often uncover a great deal of relatively minor crimes.

Similarly, today prosecutors often find it difficult to prove the most serious terrorism offenses, such as material support, beyond a reasonable doubt. But the investigation of suspected terrorists often reveals other illegal activities that prosecutors can go after. They have done so aggressively since 9/11, following a model that then-Attorney General John Ashcroft outlined shortly after the attacks:

Let the terrorists among us be warned: If you overstay your visa — even by one day — we will arrest you. If you violate a local law, you will be put in jail and kept in custody as long as possible. We will use every available statute. We will seek every prosecutorial advantage. We will use all our weapons within the law and under the Constitution to protect life and enhance security for America.

As the U.S. political landscape changes, the Al Capone model of anti-terror policing will likely be challenged. But the question of whether this is a proper model is not settled by the Bush administration's popularity or competence (or lack thereof).

One important aspect of the Al Capone model of anti-terror policing is the fact that terrorists have been heavily involved in criminal activity in the U.S., and have gained a great amount from it.

Often the first kind of crime that would-be terrorists engage in is immigration violations. Janice Kephart, former counsel to the 9/11 Commission, recently authored a report entitled Immigration and Terrorism that examines the histories of 94 foreign-born terrorists who operated in the U.S. between the early 1990s and 2004. It concludes that “about two-thirds (59) committed immigration fraud prior to or in conjunction with taking part in terrorist activity.” Terrorists have engaged in document fraud such as forgery, false statements, and the misuse of visas.

Terrorists have also been involved in sham marriages, which are attractive because federal law allows an alien who is the spouse of a U.S. citizen to gain lawful permanent residency. However, federal law prohibits marriage fraud, which is defined as a marriage that is entered solely “for the purpose of evading any provision of the immigration laws.” A number of terrorists and terror supporters affiliated with al Qaeda, Hezbollah, and the Palestinian Islamic Jihad used sham marriages. For example, three members of a Hezbollah fundraising cell in Charlotte, North Carolina were involved in sham marriages. Two of the women who married conspirators were actually a lesbian couple who lived together rather than with their “husbands.”

Terrorists have also gained financially from illegal activity. U.S. News & World Report noted in late 2005 that “[n]early half of the 41 groups on the government's list of terrorist organizations are tied to narcotics trafficking, according to DEA [Drug Enforcement Agency] statistics.”

Hezbollah in particular has profited from the U.S. drug trade. In January 2002, a federal investigation dubbed Operation Mountain Express III culminated in a series of raids that took place on a single day in ten different cities. These raids were directed at a drug ring that had been smuggling pseudoephedrine tablets from Canada to such Midwestern cities as Chicago and Detroit. (Pseudoephedrine is a key methamphetamine ingredient.) In the wake of the operation, Asa Hutchinson, then the DEA's director, revealed that “[a] significant portion of some of the sales are sent to the Middle East to benefit terrorist organizations.” Hutchinson fingered Hezbollah as one group that had benefited from pseudoephedrine trafficking, but DEA officials were quick to say that they didn't know exactly how much money had reached Hezbollah or other terrorist groups.

Similarly, the multi-agency task force Operation Green Quest exposed instances of drug money being laundered in support of Hezbollah.

Terrorist groups and their backers have also engaged in a variety of financial scams, including identity theft, bank fraud, cigarette smuggling and counterfeiting. Identity theft provides a “cloak of anonymity” that facilitates other violations of federal law such as bank fraud, credit card fraud, wire fraud, mail fraud, bankruptcy fraud, and computer crimes. Terrorists can also use their new identities to elude federal investigators as they plan or prepare attacks.

A second financial scam, cigarette smuggling, is an arbitrage scheme. Central to such schemes is the variance in cigarette tax rates between the states. Some states, such as Virginia and North Carolina, have low cigarette taxes. Others, like New Jersey and New York, have higher cigarette taxes. In a cigarette smuggling scheme, the smugglers purchase large volumes of cigarettes in states that have low tax rates and resell them below market prices in states with high cigarette taxes. They can undersell the market since they don't pay taxes on the cigarettes they resell.

The best-known cigarette smuggling case involved the above-mentioned Hezbollah fundraising cell based in Charlotte. Brothers Mohamad Hammoud and Chawki Youssef Hammoud would buy van loads of cigarettes in North Carolina, where the tax was five cents a pack, and transport them to Michigan, where the tax was 75 cents a pack. Douglas Farah noted in Blood from Stones that “[t]he brothers could clear $8 to $10 per carton, and each van load netted them up to $13,000.” Nor is this the only case where profits from cigarette smuggling were diverted to terrorist groups. By mid-2004, the ATF had more than 300 open cases of illegal cigarette trafficking, and an official told the Washington Post that “[t]he deeper we dig into these cases, the more ties to terrorism we're discovering.”

Counterfeiting is a third financial scam used by terrorists. Criminology professor Mark S. Hamm has written that “there is mounting evidence of terrorists' involvement in the lucrative underworld of counterfeiting.” He notes the FBI's 1996 confiscation of 100,000 counterfeit t-shirts that had both a fake Nike “swoosh” and Olympic logos. Followers of Sheikh Omar Abdel Rahman, who was sentenced to life in prison for his involvement in a 1995 plot to bomb New York City landmarks, reportedly ran that operation. Also, an indictment unsealed in March 2006 revealed that a Dearborn, Michigan-based ring had been involved in the sale of counterfeit goods that included “counterfeit Zig Zag rolling papers and counterfeit Viagra.” The profits from this operation were allegedly sent to Hezbollah.

Once money is raised illegally, it may then be illegally transferred to terrorist groups overseas. This has been carried out in different ways. For example, the Illinois-based Benevolence International Foundation (BIF), which achieved tax-exempt status as a charitable organization in March 1993, provided logistical support to jihadists overseas. After pleading guilty to one count of racketeering conspiracy, BIF director Enaam Arnaout admitted at his sentencing that he sent boots to mujahideen in Chechnya; boots, tents, and uniforms to soldiers in Bosnia-Herzegovina; and uniforms to a provisional, unrecognized government in Chechnya. The court found that BIF had diverted a total of $315,624 to overseas fighters.

The Holy Land Foundation (HLF), a Richardson, Texas-based tax-exempt charity, had a long-standing relationship with the terrorist group Hamas. HLF was eventually indicted on money-laundering charges. The indictment charges that HLF “transmitted or caused to be transmitted approximately $12,400,000 to various HAMAS controlled zakat committees and organizations.” The indictment lists 17 different wire transfers that were designed to support these organizations, as well as 12 instances in which the HLF defendants transmitted funds to the West Bank and Gaza with the intent to contribute funds, goods, and services to Hamas.

Also, a number of individuals and groups that raised money for Hezbollah in the United States illegally transferred money and other items of support to the terrorist group. This happened, for example, with the Charlotte cell. The second superseding indictment in that case explains that cell members sent money to Hezbollah leaders, and sent equipment to Lebanon that included night vision goggles, global positioning systems, mine and metal detection equipment, advanced aircraft analysis and design software, stun guns, and laser range finders.

The nost important premise of the Al Capone model of anti-terror policing is that, just as terrorists can gain discrete advantage by engaging in illegal enterprises, law enforcement can also exploit the crime-terror nexus by charging suspected terrorists with lesser–and easier to prove–offenses than material support of terrorism or involvement in a terrorist plot.

Many analysts have wondered why the United States hasn't witnessed another major act of terror since 9/11. Surely terrorists have not lost their desire to attack America, as successful terrorist attacks in Britain, Egypt, Indonesia, the Philippines, Russia, Spain, Tunisia, Turkey, and many other countries make clear. While there is no single answer to this question, surely the government's law enforcement model has played a role.

Two major principles will allow law enforcement to gain maximum advantage from terrorist involvement in criminal activity. First, methodology of determining whether an individual or organization is a possible terrorist threat is important. One element in this analysis is an examination of an individual or organization's terrorist or extremist associations. A second principle is awareness of the kind of criminal enterprises that terrorists have entered. For example, after the government learned that terrorists were raising money through cigarette smuggling, more law enforcement resources were devoted to combating that practice. It's proper to devote more resources to areas that have not just criminal but also national security implications.

Using every available statute against suspected terrorists, a staple of the Al Capone model, minimizes their chance of success and increases the likelihood of successful prosecution. If this policing model is indeed challenged, the debate will be wide-ranging. But one critical aspect is understanding what terrorists have gained from their involvement in criminal activity — and how, in turn, law enforcement has been able to turn this nexus between crime and terror to its own advantage.

Daveed Gartenstein-Ross is a senior fellow at the Foundation for Defense of Democracies and the author of My Year Inside Radical Islam. Kyle Dabruzzi is a terrorism analyst at the Gartenstein-Ross Group. This article is adapted from their paper “The Convergence of Crime and Terror,” which was written for the Manhattan Institute's Center for Policing Terrorism.