Money Transfers by Hijackers Did Not Set Off Alarms for Banking Regulators
WASHINGTON - Even as the Sept. 11 hijackers pumped hundreds of thousands of dollars into commercial banks to finance the terrorist operation, they never tripped any of the American banking system's alarms intended to warn federal regulators of the suspicious movement of cash, investigators have said.
The hijackers, largely financed by a series of cash infusions sent by a suspected middleman for Al Qaeda in the Persian Gulf region, moved at least $325,000 into about 35 American accounts without any of the banks' issuing reports of suspicious activity to federal regulators. Without any such red flags from the banks, federal financial investigators never scrutinized any of the accounts before Sept. 11, officials said.
Some federal investigators said they now believed that the hijackers were careful not to raise suspicions — and not to run afoul of American bank reporting requirements — by keeping many of their initial transactions less than $10,000.
The terrorists also apparently avoided transactions that involved large amounts of cash.
Banks have to report cash deposits of $10,000 or more to the Financial Crimes Enforcement Network of the Treasury Department.
New details on the financing of the attacks became public as the House subcommittee on terrorism and homeland security prepared to release a report on intelligence lapses and abilities before Sept. 11. The panel conducted a separate inquiry from the broader investigation into lapses by intelligence and law enforcement that is being conducted by a joint Congressional committee.
The House subcommittee is widely expected to find that the United States needed to focus more intensely on counterterrorism before Sept. 11 and to propose legislation to improve coordination among federal agencies.
Financial safeguards also failed to detect the money trail behind the Sept. 11 plot. Even when the hijackers began to receive much larger amounts of money, their transactions did not prompt any of the banks that they were using to file federal reports of suspicious activity. In fact, because they received most of their money through wire transfers of funds directly into commercial bank accounts, the hijackers were able to avoid having to make large cash deposits, and so skirted several important bank reporting requirements, officials said.
F.B.I. officials have said that in some cases the hijackers used fake Social Security numbers to open their accounts, but that bank officials never checked or questioned those numbers. If the banks had realized that accounts had been opened with bogus Social Security numbers, they would have been required to file reports of suspicious activity to federal regulators, officials said.
The banks' failure to scrutinize the application forms for the accounts let the hijackers gain access to the commercial banking system.
None of the banks used by the hijackers filed so-called currency transaction reports, routine filings that banks have to make to the federal government on any cash transaction of $10,000 or more. Banks have to file currency transaction reports even when they have no reason to believe that the transaction is suspicious.
But even those reports do not necessarily raise red flags with government investigators. Instead, the government asks commercial banks to monitor patterns of transactions that appear suspicious and gives the banks broad guidelines, rather than fixed standards, on what to look for.
None of the banks detected unusual patterns in the hijackers' accounts, and none filed suspicious activity reports with the Treasury Department, the officials said.
Beginning in the summer of 2000, Mohamed Atta and Marwan al-Shehhi, who investigators theorize were two leaders of the 19 hijackers, began to receive a series of wire transfers from the United Arab Emirates.
F.B.I. officials said the bureau believed that the transfers were sent by Mustafa Ahmed al-Hisawi, who has been identified as a financial manager for Osama bin Laden. Mr. Hisawi is widely believed to have fled to Pakistan before Sept. 11, but only after receiving unused cash back from the hijackers.
In June 2000, Mr. Shehhi received a $4,790 wire transfer in Manhattan from the United Arab Emirates. The next month, a second transfer, for $9,985, was wired from the emirates to a SunTrust bank account in Florida opened jointly by Mr. Atta and Mr. Shehhi. On Aug. 7, 2000, an additional $9,485 was wired from the emirates to that account, a transfer quickly followed by a wire transfer of $19,985 from the emirates to the account on Aug. 30 and a $69,985 wire transfer from the emirates on Sept. 18.
Officials at the Financial Crimes Enforcement Network said banks were not required to report such transfers to the government. Instead, banks have to keep records of wire transfers of more than $3,000 for five years.