Forensics Journal - Stevenson University 2015 | Page 44

STEVENSON UNIVERSITY

Disrupting Terrorist Financing:
Interagency Collaboration, Data
Analysis, and Predictive Tools
Andrea Lynch Pyon
in illegal activities. Forensic accountants and law enforcement
agencies utilize special investigative tools to achieve a higher
probability of obstructing the flow of money that finances
terrorist activities.

INTRODUCTION
Dr. Thomas Riley Kennedy O’Connor, a comparative criminologist
in the field of terrorism and homeland security, stated that locating
and halting the source of terrorist financing involves two tactics,
“follow the money and dry up the money” (O’Connor, 2013).
There are several fraudulent activities involved with funding terrorist
organizations such as: money laundering (trade-based money
laundering), Bitcoin operations, cross-border wire transfers, and
organized crime (drug trafficking). Law enforcement and government
agencies in collaboration with forensic accountants play key roles
in tracing the source of terrorist financing to the activities used to
inflict terror on local and global citizens. Law enforcement agencies
utilize investigative and predictive analytics tools to gather, dissect,
and convey data in an effort to distinguish patterns leading to future
terrorist events. Government agencies employ database inquiries of
terrorist-related financial information to evaluate the possibilities of
terrorist financing and activities. Forensic accountants review the
data for patterns related to previous transactions by utilizing data
analysis tools, which assist in tracking the source of the funds.

TERRORIST FINANCING
Obstructing terrorist financing requires an understanding of both
the original and supply source of the illicit funds. As the financing
is derived from both legal and illegal funding sources, terrorists may
attempt to evade detection by funneling money through legitimate
businesses thus making it difficult to trace. Charitable organizations
and reputable companies provide a legitimate source through which
terrorists may pass money for illicit activities without drawing
the attention of law enforcement agencies. Patrons of legitimate
businesses are often unaware that their personal contributions may
support terrorist activities. However, terrorists also obtain funds
from obvious illegal sources, such as kidnapping, fraud, and drug
trafficking (Perri, 2010). Terrorists often change daily routines to
evade law enforcement agencies as predictable patterns create trails
that are easy for skilled investigators to follow. Darrell Dorrell, a
recognized author in the field of forensic accounting and litigation,
stated audit “trail[s] can be [traced] from the donor source…to the
terrorist” by forensic accountants and law enforcement agencies
tracking specific indicators. Audit trails reveal where the funds
originate and whether the funds came from legal or illegal sources.
Money laundering is a specific type of illegal funding source, which
provides a clear audit trail (United States Dept. of Justice, 2014, p. 3).

According to the Association of Certified Fraud Examiners (ACFE),
forensic accountants use a combination of “accounting knowledge
with investigative skills in…litigation support and investigative
accounting settings” (ACFE, 2014). Several types of organizations,
agencies, and companies often employ forensic accountants to
provide investigative services. Some of these organizations are
public accounting firms, law firms, law enforcement agencies,
The Internal Revenue Service (IRS), The Central Intelligence
Agency (CIA), and The Federal Bureau of Investigations (FBI).

MONEY LAUNDERING

In 2009, the FBI officially created a forensic accounting
position within the Bureau to complement its standard criminal
investigations. According to the FBI web page, the Agency utilizes
forensic accountants to investigate terrorists “involved in financial
wrongdoing” (“FBI Forensic Accountants,” 2012). FBI forensic
accountants use various investigative tools to track terrorist financing,
i.e. government-wide databases and Financial Crimes Enforcement
Network (