In Part 1 to this three part series, we covered how terrorist organizations, like drug cartels, have worked with banking institutions such as UBS and HSBC in laundering money to finance their operations by obscuring and obfuscating the source of the funds in question.
Utilizing banks as a tool, terrorist organizations are able to purchase weapons and explosives used to kill and injure U.S. military personnel and civilian contractors. The banking activity can be a criminal violation of the U.S. Anti-Terrorism Act, which provides that any U.S. citizen or his/her survivors may file a lawsuit for injuries caused by an act of international terrorism.
The first step, placement, is when a representative of the organization in question deposits the money into a bank in such a way that its origins are difficult to trace while avoiding attention from tax and customs officials and law enforcement. This can involve “structuring” cash payments (breaking up large sums into smaller deposits), or using a “legitimate” business as a cover in order to conceal the money’s source.