IS Using Front Companies to Support Terrorism

As the Islamic State (IS) has been beaten back in Iraq and Syria, the group has continued to attack civilian targets in countries in the anti-IS coalition. Just last week, the group’s operatives attacked Barcelona, and IS may also be responsible for attacks in Russia and Finland. A recent affidavit, brought to light by the George Washington University’s Program on Extremism, showcases the challenges of interdicting the funding and networks behind such attacks. The affidavit unveiled a worldwide, now-defunct network of Wales-based front companies controlled by an IS sympathizer, and demonstrates IS’s capacity to pursue complex financing strategies.

At the core of the Wales-based network was Siful Sujan, a Bangladeshi national and IS’s director of computer operations. Sujan set up a string of companies in an everyday business park in Cardiff with the stated intention of providing printing services. Sujan’s companies also had an office in Bangladesh, and an affiliate planned to open an office in Turkey. Sujan, then 29, used a fake name on the official documents for at least one of the companies in an effort to hide ownership. He used these companies to procure advanced electronics for IS, as well as to send money to those seeking to carry out attacks on IS’s behalf. Sujan was killed fighting for IS in Syria in a 2015 drone strike that was timed with the international operation to arrest members of his network.

One of Sujan’s activities entailed funding for a potential attack in the U.S. According to the FBI, a 32-year old Maryland man, Mohamed Elshinaway, “pretended to sell computer printers on eBay.” This provided cover for Sujan’s company to send nearly $9,000 to Elshinaway for his fake printers. The money traveled through Western Union and PayPal, which interacts with the banking system and thus is subject to U.S. jurisdiction. Elshinaway used the funds to pay for a computer, cellphone, and encryption, which he used to communicate with IS planners. He “dreamt of carrying out a gun massacre in a church,” but was arrested as part of the international sweep in December 2015. He has pled guilty to associated terrorism charges.

The efforts of Sujan’s companies were not confined to fueling jihadism in Western countries. Sujan’s “company and affiliates bought military-grade surveillance equipment, antennas, and anti-bugging devices from companies in the U.S., Canada, and Britain.” In one instance in 2015, Advance Technology Global (ATG), the firm Sujan created under a fake name, purchased three military-grade sensors from a Canadian company. ATG also sent one sensor to Spain, where it has not been accounted for. Though there is no direct evidence that the sensors traveled to Syria, a media report has stated the technology was “understood to be linked” to IS drone development. This technology may have contributed to the development of armed drones, which IS deployed against Iraqi forces in Mosul to devastating effect. The group has also used them in Syria, including against U.S. special forces.

IS operatives and sympathizers rarely act alone. They typically have some degree of coordination, and oftentimes financing, from the broader group. Terror attacks can be inexpensive, but additional funding provided by IS can allow for increased scale. In Spain, for example, the attackers were reportedly attempting to assemble a large bomb that could destroy the historic Sagrada Familia basilica in Barcelona. This makes finding and stopping networks such as Sujan’s of the utmost importance.

As Sujan and Elshinaway show, young members of IS may shift the group towards moving money through online resources. IS is likely to continue using these funds to attack innocent civilians in countries that support the anti-IS military campaign in Syria. Finding and disrupting these networks should remain a top priority for law enforcement, as they may continue to unveil difficult-to-detect funding schemes that shed more light on IS’s plots and new funding sources.

Alex Entz is a research analyst at the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance.