Hamas’ money laundering machine knows no bounds

Up to now, the biggest headache for the security establishment involving the thousands of trucks loaded with produce, fish, or scrap iron that make their way from the Gaza Strip to Judea and Samaria each year was the fear that a large part of the payment for the goods went not only to farmers in Gaza but also to Hamas terrorism there. It turns out that Hamas uses Israel’s humanitarian policy and the revenue from Gaza farm produce to strengthen its infrastructure in Judea and Samaria and launder terror money.

This is how it works: Israel, which is aware of the severe humanitarian crisis in Gaza, allows Gazan farmers and fisherman to export vegetables, fruit, and fish to the West Bank. Some two-thirds of the 9,000 trucks carrying produce of that nature that have left Gaza since 2014 were bound for Judea and Samaria.

But along the way, Hamas sticks its finger in the pie and makes it clear to Gaza farmers and they cannot export their produce and make a living unless they agree to the following arrangement: Hamas in Gaza, not the customer in the West Bank, pays the farmers for their produce. On the other end, the customer transfers the money to Hamas operatives in Judea and Samaria. To make it worth everyone’s while, Hamas pays the farmers more than the going rate, and the West Bank customers pay less. So fish and cucumbers from Gaza wind up funding terrorist acts as well as the terror support system in the West Bank that Hamas maintains and is always trying to increase.

This week, Maj. I, head of the Financial Warfare Branch in the IDF’s Central Command, whose staff work to identify and confiscate terror money in Judea and Samaria, spoke for the first time publicly about the Hamas system in an interview to Israel Hayom.

“Hamas in Gaza exploits the humanitarian easements that Israel is giving the residents of the Gaza Strip to strengthen its terrorist infrastructure in Judea and Samaria,” he says. He makes it clear that this is only one of the organization’s methods.

“In addition to the Palestinian Authority’s well-organized system of standard payments to families of terrorists who carried out attacks, Hamas has also organized a support system for terrorism and families of terrorists, and funnels money into it,” he says.

Salaries and gifts for freed prisoners

The fish and vegetables from Gaza, as well as other kinds of ordinary goods, help Hamas bolster itself in the West Bank and even expand.

“When a Hamas guy goes to prison in Israel, he and his family receive regular stipends not only from the PA but also from Hamas – double payments,” I. reveals. “When he is released, he receives a gift. Hamas supports him and his family the whole way, based on their needs. Sometimes, it’s paying for a wedding, other times it’s tuition for the kids, and often, it means covering debts.”

The major discusses the mechanism that operates in Gaza, most of which is made up of former prisoners freed in exchange for former captive IDF soldier Gilad Schalit – an entire mechanism devoted to “financial support for Hamas in the West Bank, mostly its terrorist activity, their families, and operatives.”

The system works using things other than vegetables and fish: “While Gaza is in serious economic distress, and despite the fact that the living standard in the West Bank is considerably higher than in Gaza, Hamas in Gaza is still looking for any way of transferring money into its West Bank terrorist activity,” I. stresses.

He says that at the start of 2018, the Shin Bet security agency exposed Hamas infrastructure in Judea and Samaria, arrested the operatives, and took care to have them indicted. At the same time, it turned out that the terrorist network that was exposed had been handling finances to the tune of hundreds of thousands of shekels.

“People from [my] department, together with the Shin Bet and other bodies, tracked down the source of the money. We were amazed to discover that the money came from a bridal salon in Hebron. The owner, who imported the dresses from China, said when interrogated that rather than paying the Chinese manufacturer for the gowns, he paid Hamas members in the West Bank. Meanwhile, Hamas abroad took care of the payment to the dress manufacturer in China” – meaning that a bridal salon in Hebron was funding Hamas’ network in the city. And at every stage, like with the produce and fish, people were taking their cuts.

Dollars inside boxes of medicine

The war against terror money never stops. In the more distant past, the money made its way to the West Bank in various ways. In 2002, tens of millions of dollars earmarked for Hamas “dawah” in the West Bank (social and charitable work that also bolstered the group’s terrorist infrastructure). A total of 22 associations and foundations that worked to collect that money were outlawed.

Six years later the famous “Charity Coalition” was exposed, which involved some 50 radical Islamist funds from the Gulf states, Europe, the U.S., and Turkey. Hundreds of millions of dollars were transferred to Hamas institutions in Judea, Samaria, and Gaza. The foundations were supposedly operating on behalf of Hamas’ civil and social wing but were actually serving terrorist purposes. The money was moved into Judea and Samaria via businesses, money changers, and banks. Israel – and the U.S. – outlawed the Charity Coalition.

Money changers played a key role in the various circles through which terror money flowed from Turkey, Gaza, and the Gulf states into Judea and Samaria. And money changers weren’t the only ones. Hamas did not hesitate to exploit ill people who came to Israeli hospitals for treatment to smuggle money to its operatives. For years, dollars, shekels, or Jordanian dinars were slipped into patients’ shoe soles, prescription boxes, and clothing.

Only a small part of the money funds terrorism directly. Most of it oils the mechanism of support for Hamas in Judea and Samaria and is doled out to support terrorists, their families, and their close associates.

“The money encourages more young people to join terrorist circles and serves as proof that there is someone who will provide financial backing for their actions and take care of them and their families,” I. explains.

In August 2017, for example, money and valuables worth over 130,000 shekels were discovered in the homes of families of Hamas terrorists, including some who had carried out major attacks. At the time, the Shin Bet and the Israel Police raided homes belonging to the father of Hassan Mahani of Beit Hanina, one of the terrorists responsible for the attack in Pisgat Ze’ev in Jerusalem that left two Israelis wounded, one critically, and the mother of Tareq Abu Arafa of Ras al-Amud, who in 1994 was involved in the kidnap and murder of IDF soldier Nahshon Waxman.

Last August, 30,000 shekels ($8,400) were discovered in the home of a family in the Shuafat refugee camp and traced back to Hamas in Gaza – “compensation” for one of the members of the hamoula (clan) who was in prison. This January, IDF troops and forces from the Shin Bet and the police confiscated 100,000 shekels ($28,000) in terror money during sweeps of the village Bet Ula in Judea. In February, Border Police on duty in the Binyamin region stopped a car at a checkpoint in Abu Dis and confiscated checks worth 17,000 shekels ($4,700) as well as 44,000 shekels ($12,000) in cash.

No indictment

The “terror money” that the Central Command’s Financial Warfare Branch and security forces have found in the past few years is just a little bit of the much larger sums that are out there.

“We still haven’t gotten to most of it,” I. confirms. Still, every year, more is tracked down: in 2016, they discovered about 1.8 million shekels ($500,000), and in 2017 and 2018 about 2.2 million shekels ($610,000) each year. As of the end of March 2019, some 450,000 shekels ($130,000) of terror money had already been discovered and confiscated.

The intelligence about the money and the ways in which it is laundered and smuggled into Judea and Samaria is concentrated in the hands of the department I. has been heading for the past year and a half.

“In comparison to the not-so-distant past, the resources we are allocating to fight the phenomenon have increased fivefold. Dozens of soldiers on mandatory service are coordinating massive efforts, helped by experienced reservist teams. We collect information independently and also receive material from the Shin Bet and other entities. We work all this into distilled intelligence and give it to combat troops in the field, whose job is to find the money or property, which is a substitute for money, and confiscate it.”

Q: Does the PA help Israel with its battle against terror money?

“I can’t go into details, but we definitely have identical interests,” he says.

For the past year, I.’s department has been cooperating with the tax authorities and with the National Bureau for Counter Terror Financing (NBCTF) in the Defense Ministry, which was established by former Defense Minister Avigdor Lieberman. The HQ is directed by attorney Paul Landes.

“We, as a military body, can’t approach companies or businesses that are involved in laundering terror funds directly,” I. explains.

“The people who approach them directly on behalf of the government are people from the NBCTF in the Defense Ministry.”

He stresses that “in most cases, we don’t indict, and stick to the framework of ‘administrative justice,’ which puts a lot of limitations on us. There is no element of punishment, only prevention. We confiscate the money or property of equal value to the money transferred to terrorist purposes and by doing so create deterrence, but we don’t put the people involved on trial because it’s very difficult for us to expose the sources of our information.”

One of the exceptional cases in which an indictment was served has to do with a business in Ramallah – a store that sold gold jewelry whose owner, a Christian from Ramallah, was helping Hamas launder money. Hamas would smuggle the gold from Africa to Judea and Samaria and from thence to Israel. The people who benefitted included Hamas members who would sell the gold and use the money.

“The police exposed the affair, and criminal elements were involved, as well. We found that the same tradesman would hide some of the smuggled gold and declare it as goods that had been bought and sold from his business. When we asked him why he was working with Hamas, his answer was simple: ‘They’re honest people and pay on time.’ He wasn’t tried. The criminal procedures against him are still ongoing,” I. says.

The shipping container model

One of the department’s standout successes, which came as a result of cooperation with the tax authorities, the Shin Bet, and the NBCTF, exposed a widespread network of Hamas funding. Like the cucumbers, fish, and wedding dresses, Hamas was trying to import goods (mostly clothing, shoes, and toys), sell them in Israel, and use the money for its own purposes.

The last link in the chain was a giant shipping container that arrived at the Ashdod Port, which Israel confiscated. This is how the system worked: Palestinian merchants who wanted to buy goods from outside Israel would pay for them via money changers in the West Bank, “mainly a money changing company called Beit Al-Maqdis from Tulkarem, that belongs to the Awad family,” I. says. Hamas abroad would then pay the foreign supplier. The thwarted plan was to unload the goods from the container at the port, sell them in Judea and Samaria, and divide the money between Hamas, which would get most of it, and the money changer, who would receive a percentage.

The shipping container method of 2018 is somewhat reminiscent of the way in which two Hamas representatives from Hebron would operate in Turkey three years ago. The two would receive tens of thousands of dollars, buy goods in Turkey, and import them to Hebron via international courier companies. After the goods were sold, the money (minus a commission) was handed over to Hamas operatives in the city. Nearly $200,000 made its way to Hamas in Judea and Samaria through this method.

A nearly identical system was active in the early 2000s. The Faiz Abu Akar company from Khan Younis would buy goods from various foreign suppliers. The supplier was paid directly by the foreign commands of Hamas and Islamic Jihad. Later, the goods, packed in the shipping container, were sent to a branch of Faiz Abu Akar in Judea and Samaria. The plan was to sell the goods there and funnel the money, minus a commission, into the pockets of Hamas and Islamic Jihad. That framework was also exposed, and 31 packed shipping containers that arrived at the Ashdod Port were confiscated by government authorities.

“A major part of our work has to do with motivation. We understand, through intelligence, that our confiscations, both of cash and property, are sending the message that it doesn’t pay to take money from a terrorist organization and that there’s a growing chance the money will be confiscated,” I. says.

“That’s also true for people who have already gotten money and for business owners, not necessarily Hamas members, who provide Hamas a service by laundering money – people who for a personal profit, for a cut, make their business available to Hamas. The army, the police, the Shin Bet, and the Border Police are out in the field almost every day on the basis of information that we and others provide them, and we are seeing results. This is a tough war that we intend to broaden and maintain,” he says.

Up to now, the biggest headache for the security establishment involving the thousands of trucks loaded with produce, fish, or scrap iron that make their way from the Gaza Strip to Judea and Samaria each year was the fear that a large part of the payment for the goods went not only to farmers in Gaza but also to Hamas terrorism there. It turns out that Hamas uses Israel’s humanitarian policy and the revenue from Gaza farm produce to strengthen its infrastructure in Judea and Samaria and launder terror money.

This is how it works: Israel, which is aware of the severe humanitarian crisis in Gaza, allows Gazan farmers and fisherman to export vegetables, fruit, and fish to the West Bank. Some two-thirds of the 9,000 trucks carrying produce of that nature that have left Gaza since 2014 were bound for Judea and Samaria.

But along the way, Hamas sticks its finger in the pie and makes it clear to Gaza farmers and they cannot export their produce and make a living unless they agree to the following arrangement: Hamas in Gaza, not the customer in the West Bank, pays the farmers for their produce. On the other end, the customer transfers the money to Hamas operatives in Judea and Samaria. To make it worth everyone’s while, Hamas pays the farmers more than the going rate, and the West Bank customers pay less. So fish and cucumbers from Gaza wind up funding terrorist acts as well as the terror support system in the West Bank that Hamas maintains and is always trying to increase.

This week, Maj. I, head of the Financial Warfare Branch in the IDF’s Central Command, whose staff work to identify and confiscate terror money in Judea and Samaria, spoke for the first time publicly about the Hamas system in an interview to Israel Hayom.

“Hamas in Gaza exploits the humanitarian easements that Israel is giving the residents of the Gaza Strip to strengthen its terrorist infrastructure in Judea and Samaria,” he says. He makes it clear that this is only one of the organization’s methods.

“In addition to the Palestinian Authority’s well-organized system of standard payments to families of terrorists who carried out attacks, Hamas has also organized a support system for terrorism and families of terrorists, and funnels money into it,” he says.

Salaries and gifts for freed prisoners

The fish and vegetables from Gaza, as well as other kinds of ordinary goods, help Hamas bolster itself in the West Bank and even expand.

“When a Hamas guy goes to prison in Israel, he and his family receive regular stipends not only from the PA but also from Hamas – double payments,” I. reveals. “When he is released, he receives a gift. Hamas supports him and his family the whole way, based on their needs. Sometimes, it’s paying for a wedding, other times it’s tuition for the kids, and often, it means covering debts.”

The major discusses the mechanism that operates in Gaza, most of which is made up of former prisoners freed in exchange for former captive IDF soldier Gilad Schalit – an entire mechanism devoted to “financial support for Hamas in the West Bank, mostly its terrorist activity, their families, and operatives.”

The system works using things other than vegetables and fish: “While Gaza is in serious economic distress, and despite the fact that the living standard in the West Bank is considerably higher than in Gaza, Hamas in Gaza is still looking for any way of transferring money into its West Bank terrorist activity,” I. stresses.

He says that at the start of 2018, the Shin Bet security agency exposed Hamas infrastructure in Judea and Samaria, arrested the operatives, and took care to have them indicted. At the same time, it turned out that the terrorist network that was exposed had been handling finances to the tune of hundreds of thousands of shekels.

“People from [my] department, together with the Shin Bet and other bodies, tracked down the source of the money. We were amazed to discover that the money came from a bridal salon in Hebron. The owner, who imported the dresses from China, said when interrogated that rather than paying the Chinese manufacturer for the gowns, he paid Hamas members in the West Bank. Meanwhile, Hamas abroad took care of the payment to the dress manufacturer in China” – meaning that a bridal salon in Hebron was funding Hamas’ network in the city. And at every stage, like with the produce and fish, people were taking their cuts.

Dollars inside boxes of medicine

The war against terror money never stops. In the more distant past, the money made its way to the West Bank in various ways. In 2002, tens of millions of dollars earmarked for Hamas “dawah” in the West Bank (social and charitable work that also bolstered the group’s terrorist infrastructure). A total of 22 associations and foundations that worked to collect that money were outlawed.

Six years later the famous “Charity Coalition” was exposed, which involved some 50 radical Islamist funds from the Gulf states, Europe, the U.S., and Turkey. Hundreds of millions of dollars were transferred to Hamas institutions in Judea, Samaria, and Gaza. The foundations were supposedly operating on behalf of Hamas’ civil and social wing but were actually serving terrorist purposes. The money was moved into Judea and Samaria via businesses, money changers, and banks. Israel – and the U.S. – outlawed the Charity Coalition.

Money changers played a key role in the various circles through which terror money flowed from Turkey, Gaza, and the Gulf states into Judea and Samaria. And money changers weren’t the only ones. Hamas did not hesitate to exploit ill people who came to Israeli hospitals for treatment to smuggle money to its operatives. For years, dollars, shekels, or Jordanian dinars were slipped into patients’ shoe soles, prescription boxes, and clothing.

Only a small part of the money funds terrorism directly. Most of it oils the mechanism of support for Hamas in Judea and Samaria and is doled out to support terrorists, their families, and their close associates.

“The money encourages more young people to join terrorist circles and serves as proof that there is someone who will provide financial backing for their actions and take care of them and their families,” I. explains.

In August 2017, for example, money and valuables worth over 130,000 shekels were discovered in the homes of families of Hamas terrorists, including some who had carried out major attacks. At the time, the Shin Bet and the Israel Police raided homes belonging to the father of Hassan Mahani of Beit Hanina, one of the terrorists responsible for the attack in Pisgat Ze’ev in Jerusalem that left two Israelis wounded, one critically, and the mother of Tareq Abu Arafa of Ras al-Amud, who in 1994 was involved in the kidnap and murder of IDF soldier Nahshon Waxman.

Last August, 30,000 shekels ($8,400) were discovered in the home of a family in the Shuafat refugee camp and traced back to Hamas in Gaza – “compensation” for one of the members of the hamoula (clan) who was in prison. This January, IDF troops and forces from the Shin Bet and the police confiscated 100,000 shekels ($28,000) in terror money during sweeps of the village Bet Ula in Judea. In February, Border Police on duty in the Binyamin region stopped a car at a checkpoint in Abu Dis and confiscated checks worth 17,000 shekels ($4,700) as well as 44,000 shekels ($12,000) in cash.

No indictment

The “terror money” that the Central Command’s Financial Warfare Branch and security forces have found in the past few years is just a little bit of the much larger sums that are out there.

“We still haven’t gotten to most of it,” I. confirms. Still, every year, more is tracked down: in 2016, they discovered about 1.8 million shekels ($500,000), and in 2017 and 2018 about 2.2 million shekels ($610,000) each year. As of the end of March 2019, some 450,000 shekels ($130,000) of terror money had already been discovered and confiscated.

The intelligence about the money and the ways in which it is laundered and smuggled into Judea and Samaria is concentrated in the hands of the department I. has been heading for the past year and a half.

“In comparison to the not-so-distant past, the resources we are allocating to fight the phenomenon have increased fivefold. Dozens of soldiers on mandatory service are coordinating massive efforts, helped by experienced reservist teams. We collect information independently and also receive material from the Shin Bet and other entities. We work all this into distilled intelligence and give it to combat troops in the field, whose job is to find the money or property, which is a substitute for money, and confiscate it.”

Q: Does the PA help Israel with its battle against terror money?

“I can’t go into details, but we definitely have identical interests,” he says.

For the past year, I.’s department has been cooperating with the tax authorities and with the National Bureau for Counter Terror Financing (NBCTF) in the Defense Ministry, which was established by former Defense Minister Avigdor Lieberman. The HQ is directed by attorney Paul Landes.

“We, as a military body, can’t approach companies or businesses that are involved in laundering terror funds directly,” I. explains.

“The people who approach them directly on behalf of the government are people from the NBCTF in the Defense Ministry.”

He stresses that “in most cases, we don’t indict, and stick to the framework of ‘administrative justice,’ which puts a lot of limitations on us. There is no element of punishment, only prevention. We confiscate the money or property of equal value to the money transferred to terrorist purposes and by doing so create deterrence, but we don’t put the people involved on trial because it’s very difficult for us to expose the sources of our information.”

One of the exceptional cases in which an indictment was served has to do with a business in Ramallah – a store that sold gold jewelry whose owner, a Christian from Ramallah, was helping Hamas launder money. Hamas would smuggle the gold from Africa to Judea and Samaria and from thence to Israel. The people who benefitted included Hamas members who would sell the gold and use the money.

“The police exposed the affair, and criminal elements were involved, as well. We found that the same tradesman would hide some of the smuggled gold and declare it as goods that had been bought and sold from his business. When we asked him why he was working with Hamas, his answer was simple: ‘They’re honest people and pay on time.’ He wasn’t tried. The criminal procedures against him are still ongoing,” I. says.

The shipping container model

One of the department’s standout successes, which came as a result of cooperation with the tax authorities, the Shin Bet, and the NBCTF, exposed a widespread network of Hamas funding. Like the cucumbers, fish, and wedding dresses, Hamas was trying to import goods (mostly clothing, shoes, and toys), sell them in Israel, and use the money for its own purposes.

The last link in the chain was a giant shipping container that arrived at the Ashdod Port, which Israel confiscated. This is how the system worked: Palestinian merchants who wanted to buy goods from outside Israel would pay for them via money changers in the West Bank, “mainly a money changing company called Beit Al-Maqdis from Tulkarem, that belongs to the Awad family,” I. says. Hamas abroad would then pay the foreign supplier. The thwarted plan was to unload the goods from the container at the port, sell them in Judea and Samaria, and divide the money between Hamas, which would get most of it, and the money changer, who would receive a percentage.

The shipping container method of 2018 is somewhat reminiscent of the way in which two Hamas representatives from Hebron would operate in Turkey three years ago. The two would receive tens of thousands of dollars, buy goods in Turkey, and import them to Hebron via international courier companies. After the goods were sold, the money (minus a commission) was handed over to Hamas operatives in the city. Nearly $200,000 made its way to Hamas in Judea and Samaria through this method.

A nearly identical system was active in the early 2000s. The Faiz Abu Akar company from Khan Younis would buy goods from various foreign suppliers. The supplier was paid directly by the foreign commands of Hamas and Islamic Jihad. Later, the goods, packed in the shipping container, were sent to a branch of Faiz Abu Akar in Judea and Samaria. The plan was to sell the goods there and funnel the money, minus a commission, into the pockets of Hamas and Islamic Jihad. That framework was also exposed, and 31 packed shipping containers that arrived at the Ashdod Port were confiscated by government authorities.

“A major part of our work has to do with motivation. We understand, through intelligence, that our confiscations, both of cash and property, are sending the message that it doesn’t pay to take money from a terrorist organization and that there’s a growing chance the money will be confiscated,” I. says.

“That’s also true for people who have already gotten money and for business owners, not necessarily Hamas members, who provide Hamas a service by laundering money – people who for a personal profit, for a cut, make their business available to Hamas. The army, the police, the Shin Bet, and the Border Police are out in the field almost every day on the basis of information that we and others provide them, and we are seeing results. This is a tough war that we intend to broaden and maintain,” he says.