Are Money Laundering Rings Aiding Terrorists?

This is a partial transcript of "The Big Story With John Gibson," March 18, 2005, that has been edited for clarity.

JOHN GIBSON, HOST: Ever since 9/11, the feds have been fighting to cut off the flow of money to terrorists. This week they cracked down on a man in Virginia, charging him with operating an unlicensed money transmitting business. The feds say he sent $23 million abroad, most of it headed to Syria and other terror-friendly countries.

The USA Patriot Act (search) is designed to identify, disrupt and dismantle these underground sources of cash. Heather Nauert is here with that story.

HEATHER NAUERT, FOX NEWS CORRESPONDENT: John, there are thousands of legitimate money transfer businesses across the country; but many of them are now operating illegally, and those are catching the fed's attention because underground money service companies can potentially be used to finance terror groups.

Dennis Lormel, a former FBI special agent, who works on money laundering and terror financing for the company Corporate Risk International, joins us now. And Dennis, today's big question is: Why should we worry about these money transfer businesses?

DENNIS LORMEL, FORMER FBI SPECIAL AGENT: Well, there's a good reason to worry here because, as an unregulated business, these are vehicles that terrorists and money launderers can use to exploit the systemic vulnerabilities.

NAUERT: Now, I understand that this has actually been done in the past, where Colombian drug lords, for example, would take money that was being sent. It was a way to, sort of, clean the money and then they would get it later on, so that the government is really looking at this very carefully to make sure that this isn't being done with terror groups.

LORMEL: Oh, absolutely.

Here is a problem because we don't have a regulated system, in terms of an anti-money laundering program, or an adequate program. And as such, these individuals are able to go undetected in a sense and wire money to compatriots in other countries.

NAUERT: OK. Now, in case folks don't know what we're talking about, because money transfer business sounds a little bit vague. These are basically kiosks that sometimes operate in mom and pop grocery stores, they're places where you can buy phone cards and sometimes these things are even run out of homes?

LORMEL: Yes. And that's one of the attractions for the terrorists and for money launderers because they are kind of, set up in neighborhoods with ethnic communities and particularly at-risk groups, particularly people aligned with the Islamic terrorists and things. And they can move money to offshore locations, again in at-risk countries.

NAUERT: Now I understand that billions and billions of dollars a year get sent from the United States all over the world. Some of it's legitimate, from immigrants who want to send money to their family members in other foreign countries. But some of it is extremely suspicious.

Is there any way that our government can figure out exactly where the money is going?

LORMEL: Well, I think most of it is legitimate. And it's just that money that is questionable and does go to the nefarious side.

Yes, there are things that can be done. Certainly the arrest in Virginia serves as a deterrent, but there also needs to be regulation, in terms of FINCIN, which is the Financial Crimes and Investigative Network.

NAUERT: And they're trying to get these businesses to comply with the law.

LORMEL: Oh yes.

NAUERT: But the problem is many of these businesses aren't complying, so, they're operating outside of the law. Let me just ask you quickly, this money that's going to Syria and Iraq, as an investigator who has worked on these types of cases, briefly, what does that say to you? Does that raise some red flags?

LORMEL: Oh, absolutely. Countries like Syria, Iraq, Iran, certainly Afghanistan, and Pakistan raise red flags for us. And the luxury to using these types of businesses for the bad guy is it's much more difficult for us to track the money once it gets to its destination.

NAUERT: All right. And I understand that that can take years and years and years. And our government says that the best solution is just to shut it down.

Dennis, unfortunately, we're going to have to leave it there. But thanks a lot and hope you'll keep us informed as to what's going on with this.

LORMEL: Thank you very much, Heather.

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