According to an intelligence report acquired by ABC News, the British terrorist cell that planned to blow up transatlantic flights bound for the U.S. used eBay to help finance their operational plans. The report stated that suspected terrorist and cell member Assad Sarwar ?used eBay extensively? and that ?it is believed they would sell and purchase items to make a profit to fund (the) plot? (source).
Past evidence of Internet fundraising has included Hizb ut Tahrir?s use of the Internet to gather donations through PayPal. Therefore, the use of the Internet in general and eBay in particular to fund terrorist operations should come as no surprise. While it is unclear exactly why Sarwar chose to establish an online store via eBay, it is likely that eBay was chosen due to its immense popularity. According to Alexa.com, eBay is the thirteenth most visited site on the Internet. Due to its popularity eBay would have provided the London terror cell the best opportunity to raise funds in an efficient and timely manner. Additionally, it must also be considered that eBay?s immense popularity offered Sarwar a level of anonymity as it would have been difficult, without prior corroborating intelligence, to detect the terrorist cell?s seemingly legitimate online storefront.
Laundering Money with Online Payment Services
It is also possible to use online auction systems, like eBay, as well as online payment services, like eBay?s PayPal system, to both launder and transfer funds. According to the U.S. Treasury Department?s Money Laundering Threat Assessment Working Group, ?several FBI field offices reported the laundering of millions of dollars derived from Internet extortion and fraud schemes through money service businesses such as Western Union, PayPal, e-gold Limited, and other online payment systems (source).?
The following example scenario illustrates one way that terrorist operatives could abuse a site like eBay and an online payment system like PayPal to transfer operational funds. If a terrorist operative in London wished to transfer funds to another operative located in the United States the U.S.-based operative could post a fictitious item for sale on eBay. The London-based operative could post a bid on eBay for the fictitious item. The U.S.-based operative could select the London-based operative?s bid as the winning bid. The London-based operative could move funds to the U.S.-based operative eBay?s account. In this scenario the money changes hands even though the fictitious good does not. To the uniformed observer this transaction would not stand out among the multitude of daily eBay auctions and PayPal transactions and therefore offer a hidden way to transfer funds for terrorist operations.
It should be expected that terrorist operatives and sympathizers would continue to develop new and creative ways to exploit the Internet to raise, launder, and transfer funds for operations. As the U.S. Treasury Department?s Money Laundering Threat Assessment Working Group noted, ?online payment services function as international person-to-person payment systems. By crossing jurisdictional lines these services potentially create difficulties for authorities pursuing enforcement or legal actions (source).? ?Although individuals may use credit cards, wire transfers, or other bank payment tools to move to on-line payment systems,? the report continued, ?the investigative trail for law enforcement ends there when service providers do not have effective customer identification or record keeping practices. In addition, the trail is further shortened when service providers accept cash and money orders to fund accounts (source).?
