Radical Pakistani madrasas are enaged in massive trade-based money laundering to fund jehadi groups, eminent experts have told American lawmakers who expressed concerns over terror financing.
Concerned over the practice, Congressman Stephen F lynch said trade-based money laundering (TBMl) involves using trade and products or commodities for value in order to divert and obscure the true nature of the illicit wealth.
“Trade-based money laundering is related to terrorist finance,” John Cassara, former US Intelligence Officer and Treasury Special Agent, told members of the House Financial Services Committee during a Congressional hearing.
He said in one example of TBMl and terrorist financing, a Pakistani madrassa was linked to radical jehadi
groups and it received large amounts of money from foreign sources.
“It was engaged in a side business dealing in animal hides. In order to justify the large inflow of funds, the madrassa claimed to sell a large number of hides to foreign customers at grossly inflated prices. This ruse allowed the extremists to ‘legitimise’ the inflow of funds which were then passed to terrorists,” Cassara said.