Journal of Money Laundering Control Volume: 14 Issue: 1 Dated: 2011 Pages: 44-59
This article identifies factors that make the organized crime and terror collaboration more likely, providing examples that illustrate the interaction and the role that fraud has in financing terrorist activities.
Criminal organizations exist in order to maximize profits from illegal activities that undermine and exploit unlawful economic activities and unlawful pursuits by the general public. Terrorist groups, on the other hand, may need money to conduct their activities, but are oriented toward causing death and suffering of targeted enemies for political and/or religious motivations. Terrorist and organized crime groups are likely to interact with one another through shared tactics and methods, the process of transformation from one type of group to the other over time, and short-term or long-term transaction-based service-for-hire activities (Mullins, 2009). Crime-terror connections are more likely to occur where a government is weakest in terms of law codes and law enforcement, where "shadow" economies exist, and where corruption and regional conflict are prevalent (Shelley et al., 2005). Although criminal and terrorist groups may differ in their ultimate goals, both are interested in avoiding the detection and law-enforcement intervention into their activities. Secrecy and money-making opportunities are critical for the survival of both groups, although the ultimate ways in which they use these tactics may vary; however, there are examples of terrorist groups evolving into profit-making criminal groups and vice versa. The inability to distinguish terrorist and criminal groups has been referred to as the "black hole" syndrome (Makarenko, 2004). This syndrome can result in a state being dominated by a crime-terror group, which gains excessive amounts of money through fraud and corruption while maintaining their power through terrorist tactics. Examples of the fraud-terror nexus focus on mortgage fraud, charitable fraud, identity fraud, insurance fraud, and immigration fraud. 39 references