U.S. Raids 17 Businesses That Send Cash Abroad

"The entry point to these networks may be a small storefront operation, but follow the network to its center and you discover wealthy banks and sophisticated technology, all at the service of mass murderers," President Bush said of the raids at the time. Al Barakaat officials have denied ties to terrorism.

Well before the Al Barakaat raids, U.S. agents had been targeting businesses that handled money for drug traffickers or other criminals, but the Patriot Act gave them more tools. Since it passed, authorities have arrested more than 80 people nationwide in connection with the illegal transfer of millions of dollars to countries including Pakistan, Iraq and Yemen, immigration and customs officials said.

Locally, the crackdown has been carried out by an Annandale-based team that includes officials from Immigration and Customs Enforcement, the Secret Service, the Internal Revenue Service, the U.S. attorney's office and local police.

They discovered a thriving underground banking system in the Washington area. It ranged from an Afghan grocery store in Alexandria, where immigrants dropped off cash for a local hawala operator, to the Towfiiq Group, which sent millions of dollars to the Middle East from an office on Leesburg Pike, according to ICE officials. Law enforcement agents shut down that company in November and seized $523,386 from its Virginia-based bank accounts. Local immigrants said the service was used by many from Somalia, whose money often passes through Middle East banking hubs. No charges have been filed.

Agents have also targeted unlicensed money-transmitters who send funds to Pakistan, Guatemala and Peru.

Authorities have not publicized many details of the local raids, since some of the targets have cooperated and others are under investigation. But officials say they are scrutinizing some of the firms for possible terrorist links.

Allen J. Doody, who heads the local ICE office, said three of the area money-senders are suspected of transferring money to Sudan. That is prohibited under U.S. sanctions that cite Sudan's alleged support for terrorism. Local immigrants acknowledge that some residents have sent money to relatives in Sudan despite the ban.

Two of those firms also may have sent funds to Libya, a practice that until recently was also illegal, Doody said.

Law enforcement officials say the fact that the businesses do not register with the government is suspicious. They have turned up cases across the country in which drug traffickers, smugglers of illegal immigrants and others have used informal money-transmitters.

But immigrants and some financial experts say some of the businesses caught in the crackdown are small operations that do not know the regulations or cannot afford the expense involved, particularly in getting a state license. Although many states have required money-transmitting licenses for years, enforcement was not strict until recently, immigrants say.

Osman Yusuf, 49, a Somalian refugee, said he was eager to comply with the new anti-terrorism regulations. The entrepreneur held a business license for Dahabshil Inc., a three-room business in a wooded office park in Alexandria, which sent money to his war-torn homeland. But only after the Al Barakaat shutdown did he learn that he needed a separate license from Virginia, he said.

Yusuf said it took six months to obtain the license, in part because he made some mistakes on the forms and needed a lawyer to fix them. He was required to close his doors until he got the permit.

"It costs a lot. A lot of documentation is involved," he said, adding that he also had to post a half-million-dollar bond.

Passas, the Northeastern professor, said the regulations could ultimately be counterproductive, driving the informal bankers further underground.