Indonesia: Terrorist financing, cybercrime, Islamic charities and the underground economy
Note that the authorities reveal that charities and non-profit organizations are commonly used to fund terrorism, as we have covered extensively here on Shariah Finance Watch
Recently, the National Police’s Densus 88 counterterrorism unit arrested five suspects in the case of the Surakarta church bombing. Among them was an Information Technology (IT) expert, Rizki Gunawan, who used his skills to illegally gather funds from the Internet. According to the police, Rizki was able to hack into, among others, a Multi Level Marketing (MLM) company website and reaped around Rp. 5.9 billion (US$625,400). The police believed that part of the funds were used to support the church bombing attack in 2011.
According to the National Police, there have been many indications that terrorists are very resourceful in funding their activities through the use of IT. Hacking for money is now considered as a common method of obtaining funds for terrorist financing. In fact, police investigations have revealed that the 2002 Bali bombings were allegedly funded at least in part by online credit card fraud.
It is worrying to see that what at first seems to be a mere financial crime may turn into a life threatening offense such as terrorist attack. In some terrorist attacks, fraud is a predicate offense to other crimes world wide. A report on the global money laundering and terrorist financing threat by the Financial Action Task Force on Money Laundering (FATF) suggested that in many jurisdictions there seems to be an increase in Internet–based fraud and other uses of Internet technologies in fraudulent activities.
The FATF’s survey also revealed that fraud, trafficking in narcotics, cigarettes, weapons, human beings or diamonds and petty crime are the most common sources of terrorist financing. Additionally, according to the FATF, legitimate sources of funds such as charities, non–profit organizations and small cash intensive businesses are also commonly used for supporting terrorism.