Abstract: An analysis of all related court cases since 2013 shows that, save for a few exceptions, the vast majority of U.S.-based Islamic State supporters left a remarkably small financial footprint.
Most, in fact, simply relied on personal savings to pay the small costs required for their activities. Some engaged in specific fundraising activities, which tended to be fairly unsophisticated. The crime-terror nexus prevalent in Europe has been virtually absent in the United States with respect to the Islamic State-linked cases, and very few U.S.-based supporters engaged in financial transactions with full-fledged Islamic State members, with only one known case of an individual who received funding to carry out an attack domestically. The small size of the financial footprint of U.S.-based Islamic State supporters is, in itself, good news for U.S. authorities but has a flipside, as the scarcity and inconspicuous nature of the financial transactions of many U.S.-based Islamic State supporters can represent a challenge for investigators.
Over the last few years, the United States has witnessed an Islamic State-related domestic mobilization that is proportionally smaller than that of most Western countries but unprecedented for a country that had historically seen low levels of radicalization of jihadi inspiration. Since the first arrest in 2013, U.S. authorities have arrested 204 individuals for Islamic State-related activities as of January 2020 and estimate that more than 250 Americans have traveled or attempted to travel to Syria and Iraq to join the group.1 a
Previous research has analyzed various aspects of this mobilization, from its demographic profile to the role social media played in it.2 This article, which summarizes the findings of a forthcoming George Washington University Program on Extremism (PoE) report, examines the financial component. It analyzes how U.S.-based Islamic State supporters have raised and moved funds for their activities, whether that entailed traveling abroad to join the Islamic State, sending funds overseas to support the group and/or its operatives, or carrying out attacks in the group’s name.
In order to do so, PoE researchers collected all publicly available court documents for all the individuals charged in the United States for Islamic State-related activities and integrated the information contained in them with interviews with national security professionals and news articles. There are inherent limitations in conducting a study of this kind. While court records are generally reliable and accurate sources of information, some details will naturally be missing or withheld depending on how far the case has progressed procedurally and the sensitivity of some information. They may also be limited by the scope of an investigation, which might not be primarily focused on the financial details and records of the Islamic State’s American supporters. In addition, there are no court records available for the subset of Americans who traveled abroad to join the Islamic State but have not been charged, and the handful of individuals that died carrying out attacks. Despite these limits, this stands to be the first comprehensive study on the subject and provides a solid overview of the financial dynamics of the U.S.-based Islamic State scene.
A Small Financial Footprint
The vast majority of U.S.-based Islamic State supporters left a remarkably small financial footprint, rarely more than a few thousand dollars. While outliers exist, the financial activities of the vast majority of the 204 U.S.-based Islamic State supporters in the Program on Extremism database were extremely low in both scale and sophistication. The most common funding source for American Islamic State supporters was personal savings. Most of the suspects studied, in fact, held jobs, which ranged from menial and relatively low paying to, in a few cases, fairly high-earning positions. This allowed these individuals to count on amounts that were enough to support the generally low-cost activities they engaged in to support the Islamic State.
In substance, most American Islamic State supporters appear not to have felt the need to engage in specific activities to obtain more funds. Those who did so engaged in either legal or illegal fundraising activities. While terrorism financing constitutes a federal crime, there are several terrorism-aimed fundraising activities that are not by themselves illegal in nature. In fact, 46 American Islamic State supporters (22.5 percent) used funds that came from donations (38 cases), legal asset sales (five), opening a new credit line (two), and injury lawsuits (one, the curious case of Minnesota resident, Mohamed Amin Ali Roble, who allegedly used his $91,654 settlement for the injuries he sustained in the 2007 collapse of the I-35W bridge over the Mississippi River to travel to Syria to join the Islamic State3) to fund their Islamic State-related activities.b A smaller number of American Islamic State supporters (14, 6.9 percent)c employed various illegal methods to support the group’s or their own activities. They include financial aid fraud (four cases), illegal firearms sale (three), armed robbery (two), drug trafficking (two), bank fraud (two), and embezzlement (one).
Many American Islamic State supporters operated as lone actors, without any known or identifiable forms of direct support from the organization.d This dynamic is common throughout the West but particularly prominent in the United States, where there is a smaller jihadi scene and Islamic State sympathizers often find it particularly challenging to connect with like-minded individuals outside of the virtual space. From a financial point of view, this means that many Islamic State supporters raised funds (in most cases, amounts no more than a few thousand dollars) for themselves, without transferring them to anybody else.
In several cases, American Islamic State supporters acted in small groups. Some of these clusters were constituted by individuals whose relations predated their radicalization. A textbook example of this dynamic is the relatively large group of high-school friends and relatives from the Minneapolis-St. Paul area that allegedly pooled resources to facilitate the travel to Syria of some of their members around 2014.4 Other clusters were formed by individuals who did not have preexisting ties but who fell into each other’s orbit, for the most part on social media platforms, because of a joint interest in jihadi ideology. While some of these connections evolved purely in the virtual realm,e others eventually transcended into the physical world.
Most commonly, these small groups consisted of only two to four individuals and involved small amounts of money. Jaelyn Young and Muhammad Dakhlalla, for example, made plans to travel together in August 2015 to Istanbul and from there join the Islamic State in Syria.5 The two met at Mississippi State University, where they started dating and eventually married in June 2015.6 By that time, they had already expressed their desire to travel to Syria to FBI undercovers online, and took steps to make that travel possible.7 The two applied for passports in June 2015, for which Dakhlalla paid $340 to have them expedited. After receiving the passports, they used Young’s mother’s credit card to purchase flight tickets to Istanbul where they expected to meet an Islamic State recruiter who was, in fact, an FBI online undercover. Young and Dakhlalla were arrested on August 8, 2015, before they could board their flight.8 Their story is representative of dynamics seen in many U.S. Islamic State cases, the financial component consisting only of a couple of small purchases (two passports and two tickets, the latter purchased using a relative’s credit card) and no specific fundraising activities. Both were sentenced in August 2016 for conspiring to provide material support to the Islamic State.9
Still other cases did not even pass that small financial threshold. For example, Joseph Jones and Edward Schimenti, two 35-year-old Zion, Illinois, residents, were arrested in April 2017 for conspiring to provide material support to the Islamic State.10 The two men began helping an FBI cooperating source plan travel to join the Islamic State overseas in the fall of 2015.11 Although they did not purchase flight tickets for the cooperating source and did not make any plans to travel themselves, Jones and Schimenti did provide the source with several cell phones they believed would be used by Islamic State fighters overseas to detonate explosive devices in attacks. When asked by the cooperating source how much he paid for the phone, Schimenti responded “five dollars,” and added that he hoped they would have been used to kill “many kuffar [infidels].” Whether seeking to travel themselves, facilitate travel for others, provide support to the Islamic State overseas (as in the case of Jones and Schimenti), or plan attacks in the United States, in the vast majority of cases the financial threshold was very low and no specific fundraising activity was implemented. The Zion, Illinois, pair were convicted of conspiring to provide material support to the Islamic State in June 2019.12
Fund and asset movement methods employed by American Islamic State supporters vary, but like the Jones-Schimenti case, they generally tend to be fairly unsophisticated. In most cases, the small amounts raised were simply transported and hand delivered to Islamic State operatives in person.f Only occasionally were funds moved through bank wires,g while money transfer servicesh and prepaid cardsi were used with greater frequency. Despite the increasing talk about terrorist use of cryptocurrencies, there are records of only one individual (Zoobia Shahnaz,j whose case will be detailed below) having used them.13
Finally, it is noteworthy that while movement of funds among U.S.-based Islamic State sympathizers are not uncommon,k transfers to and from full-fledged Islamic State members operating overseas have been a rarer occurrence. Among all 204 individuals charged for Islamic State-related activities in the United States from 2013 to January 2020, only eight engaged directly in financial transactions with foreign-based Islamic State operatives.l In most of these cases, the recipient of funds originating from the United States was a U.S. citizen or resident who had traveled to Islamic State-controlled territory and was receiving support from contacts back home. There is only one known case of someone, Mohammed Elshinawy, receiving funds from the Islamic State to conduct an attack in the United States.14
The Outliers
The Elshinawy case stands out not just for being the only known example of an individual receiving funds from the Islamic State to attack the homeland, but also for its complexity, which makes it one of the outliers in the U.S. pro-Islamic State scene. In early 2015, Maryland resident Elshinawy made online contact with a senior Islamic State operative, Siful Sujan, through a childhood friend from Egypt who had joined the Islamic State in Syria.15 m Sujan, a United Kingdom-educated computer systems engineer of Bangladeshi origin was, prior to his death in a coalition airstrike, an external operations planner for the Islamic State.16 At the time of his communications with Elshinawy, Sujan also directed the Islamic State’s computer operations, a position previously held by notorious Islamic State virtual planner Junaid Hussain.17
To channel funds to foreign-based recruits, Sujan used an IT, electronics, and web services company based in Cardiff called Ibacstel Electronics Limited.18 It was from Ibacstel that Elshinawy received his first transfer of $1,500 on March 23, 2015. Ibacstel requested equipment from Elshinawy, who masqueraded online as an electronics vendor, and paid Elshinawy for non-existent equipment. Elshinawy used part of this money to purchase a phone, laptop, and VPN to communicate securely with Sujan and other Islamic State-affiliated individuals.19 Sujan continued to send payments via PayPal from his front company, through other intermediaries in Bangladesh, Turkey, and Egypt, and via Western Union transfers directly to Elshinawy, totaling around $8,700 over a four-month time period.20 Sujan and Elshinawy had agreed that the Maryland native would use those funds to conduct an attack on behalf of the group on U.S. soil. Elshinawy kept his Syria-based handler abreast of his preparations, and also allegedly attempted to recruit his brother—who was living in Saudi Arabia—to join the Islamic State.21 Unbeknownst to Elshinawy, however, the FBI had tracked both the transactions and the conversations. Elshinawy was arrested, convicted, and sentenced to 20 years in prison in March 2018.22
Similarly complex were the activities of the aforementioned Zoobia Shahnaz, a naturalized U.S. citizen born in Pakistan who worked as a lab technician in a Manhattan hospital on a $71,000 salary.23 Starting in August 2015, Shahnaz began searching online for information on how to join the Islamic State.24 Six months later, she left the United States on a two-week medical volunteer trip to a refugee camp in Jordan “where ISIS exercises significant influence,” but it is unclear if she used the trip in any way to connect with the Islamic State.25
Shortly after returning to the United States, she started applying for—and fraudulently obtaining—over a dozen credit cards.26 After opening these lines of credit from a number of institutions, in addition to using the multiple credit cards she previously owned, Shahnaz was able to purchase over $62,000 in cryptocurrencies like Bitcoin.27 She then converted the vast majority back into U.S. dollars that she deposited into a checking account under her name.28 In addition to the funds acquired from these cryptocurrency transfers, Shahnaz obtained a loan of about $22,500 from a Manhattan bank.29 In total, the fraudulently obtained funds from U.S. financial institutions amounted to more than $85,000.
Using these funds and the existing money in her checking account, Shahnaz began to send money abroad to multiple individuals and shell companies accused of being associated with the Islamic State. On May 23, 2017, she sent $4,000 and $3,000 in two separate payments to an anonymous individual in Pakistan using a money remittance system based in Queens. Later that day, she wired just over $10,000 to a medical supply company based out of Zhejiang Province, China.30 Finally, Shahnaz made a remittance wire transfer of just over $100,000 to Ankara on July 21, 2017.31 After quitting her job, she obtained a Pakistani passport and purchased tickets for a flight to Islamabad with a multi-day layover in Istanbul. (She intended to skip her connecting flight and travel south to Syria.) She was detained by law enforcement agents at JFK on July 31, 2017.32 Shahnaz pleaded guilty to providing material support to the Islamic State on November 26, 2018, in the Eastern District of New York, and was sentenced to 13 years in prison on March 13, 2020.33
Completely differently, and also indicative of the broad demographic and socio-economic diversity of the U.S. Islamic State scene, is the case of Jason Brown. According to U.S. prosecutors, Brown was the 37-year-old leader of the AHK, a gang based in the Chicago suburb of Bellwood. AHK, which derives its name from the alternative spelling of “akh” (the Arabic word for “brother”), is accused by the U.S. government of trafficking large quantities of narcotics like heroin, cocaine, and a fentanyl analogue in the Chicago area.34
Brown had reportedly radicalized while serving time in prison in Georgia and watching videos of Jamaican preacher Abdullah el-Faisal.35 According to the criminal complaint in his case, upon leaving prison and taking the helm of AHK, Brown required fellow gang members to convert to Islam and sought to radicalize them.36 Brown allegedly became an avid consumer of Islamic State propaganda, and throughout 2019, he allegedly provided three separate cash payments totaling $500 to an intermediary he believed would send the funds to Syria to aid Islamic State fighters, but was actually an FBI undercover employee.37 Brown’s November 2019 arrest on material support charges was part of a larger federal operation to shut down AHK’s drug trafficking operations.38 Several AHK members were arrested alongside Brown on federal drug charges, but only Brown was indicted on terrorism-related charges.39 On February 27, 2020, Brown pleaded not guilty to all charges.40
Takeaways
The financial component of the U.S. Islamic State-related mobilization stands in stark contrast with dynamics observed in other Western countries. While cases of isolated individuals who finance their activities in support of the group purely through personal savings are not uncommon in Europe,41 in the United States they are overwhelmingly the norm. Moreover, save for a few exceptions, American Islamic State supporters do not seem to engage much in sophisticated funding schemes that are, on the other hand, fairly common in Europe.42
The crime-terrorism nexus that has characterized the Islamic State mobilization in many European countries is also virtually absent in the United States (the Brown case being a notable exception within the United States). European authorities, in fact, have noted that a growing percentage of radicalized individuals supportive of the Islamic State possess a criminal background and funded their activities through petty crimes.43 While in countries like Germany and the Netherlands, for example, the percentage of foreign fighters with a criminal past was above 60 percent, only roughly 10 to 15 percent of charged American Islamic State supporters had a criminal background.44 n And, as noted above, only a few resorted to criminal activities (for the vast majority, non-violent) to fund themselves.
The lack of sophistication of the U.S. Islamic State scene from a financial point of view is also evident when compared to dynamics observed in the United States in previous decades. In the 1990s and 2000s, in fact, many domestic supporters of al-Qaida, taking advantage of a more permissive environment, had engaged in relatively elaborate tactics to raise amounts, which were significantly larger than those collected by Islamic State supporters in recent years.45 The post-9/11 investigations against the Illinois-based Benevolence International Foundation and Global Relief Foundation, for example, revealed sophisticated, multi-million-dollar funding operations that, from the United States, reached jihadis around the world and provided material support to the upper echelons of al-Qaida.46 Nothing even remotely comparable appears to have been detected by U.S. authorities in support of the Islamic State.
Pro-Islamic State financial efforts seem unsophisticated also when compared to those currently undertaken by other Islamist groups operating on U.S. soil. It is well documented that Hezbollah possess an elaborate funding mechanism, whose sources include legal businesses, illegal activities, and donations within some sections of the Lebanese-American community throughout the country.47 Hamas has historically also done so, and while some of its fundraising mechanisms were dismantled in the 2000s, the group reportedly still manages to collect funds in the United States through various sources.48 And even other jihadi groups, such as al-Shabaab, appear to engage in fundraising activities on U.S. soil that, while less widespread, are more sophisticated in nature.o
The small size of the financial footprint of U.S.-based Islamic State supporters is unquestionably good news. But there is a flipside. The fact that most Islamic State supporters—with, as seen, a few notable exceptions—relied predominantly on personal savings; rarely engaged in criminal activities to obtain additional funds; raised and moved small sums; and did not often rely on the banking sector to transfer funds constitutes a challenge for law enforcement. Financial transactions are, in fact, often one of the first triggers of an investigation, the first element that flags a specific individual for potential involvement in terrorism.49 By the same token, financial transactions often constitute the best evidence to be produced in court to demonstrate material support for a designated terrorist organization. The scarcity and inconspicuous nature of the financial transactions of many U.S.-based Islamic State supporters does therefore represent a challenge for authorities. At the same time, to be sure, the lack of operational skills, including when dealing with financial matters of many U.S.-based Islamic State supporters have been repeatedly exploited by authorities. Several of them were arrested after making small donations to what they believed to be Islamic State members or intermediaries and were, in reality, FBI assets.p
While it is clear that, so far, financing has not been a significant component of the Islamic State threat to the homeland, U.S. authorities, like their counterparts throughout the world, are concerned about a more sustained use of the internet for fundraising purposes in the near future.50 While very few individuals operating in the United States were charged with the following kinds of activities, an increased use of online crowdfunding, cryptocurrencies, and deep/dark web transactions in the near future is a concrete possibility.q Many U.S.-based Islamic State supporters, in fact, have long made the web their main domain, something that became quite evident from how they operated on various social media platforms in the heyday of the group’s mobilization.r It is reasonable to suspect that other U.S.-based Islamic State supporters might use their technological skills to find resourceful ways to fund the group or its affiliates.
Law enforcement, regulators, and the financial sector are well aware that the challenge posed by the abuse of web-based fundraising and transfer mechanisms for terrorism purposes is one of the priorities for the near future.51 Yet, taking a step back and looking at the Islamic State mobilization in the United States since it began around seven years ago, it is fair to say that the counter-terrorism financing system in the United States, for the most part, worked.s Mechanisms put in place in the aftermath of the 9/11 attacks helped detect several Islamic State supporters.52 In many cases, they likely deterred Islamic State supporters from using mainstream financial tools, making their transactions less efficient, as well as easier for authorities to trace.53 This is even truer when it comes to other terrorist groups, such as Hezbollah, which possess significantly more sophisticated fundraising apparatuses on U.S. soil. At the same time, the counter-terrorism financing system needs to be fine-tuned to keep pace with the evolving nature of terrorist networks (which in the case of the Islamic State in the United States, paradoxically, means less sophistication) and technological developments.