Merchant of Death
Money, Guns, Planes, and the Man Who Makes War Possible

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A Serious Look at Islamist Banking in the United States
The Wall Street Journal has a fascinating story (viewable for free for a few days) on the criminal tax investigation launched by the Justice Department into the activities of one of the largest Islamist banking entities-Dar al-Maal Al- Islami Trust (DMI).

The case centers on investments made through a company called Overland Capital Group Inc. Two of Overland's offices in Boston were searched last week by IRS officials, according filings by federal prosecutors.

No one has been charged with any offense and the search warrant remains under seal. What is interesting is that the motion disclosing the investigation was filed by a prosecutor from the DOJ's Counterterrorism division.

Might this be the Al Capone method of getting at opaque Islamist financial structures in the United States?

As is often the case with Islamic banking institutions, the route to DMI is circuitous and not designed to be easily followed. DMI was founded in 1981 by the Arab Gulf elite as an Islamist alternative to the Western banking system.

It is one of the main financial institutions used by the international Muslim Brotherhood. Hasan al-Turabi, Osama bin Laden's benefactor in Sudan, sat on the board for almost a decade, and Yousef al-Qaradawi, one of the chief Brotherhood theologians has also been associated with the financial institution.

While DMI and several of its subsidiaries (including, as the Journal points out, Faisal Private Bank, Switzerland aka Faisal Finance) have been investigated for issues related to alleged terror finance, no charges were filed. This is the first criminal investigation made public against an Islamic banking institution in the United States.

In the forward to a 1981 booklet by DMI entitled "Studies on Islamic Economy and Contemporary Transactions," Dr. Ibrahim Mustapha Kamel wrote that DMI was "founded my desire to engage a Jihad to lift the flaw on Islamic financial and economic transactions". "Among this group of Mujahideen, Dr Ali Abdel Kader [author of the book] remains what he also was, a lighthouse...We are following Jihad in our modern times."

The actual money under investigation came through a DMI subsidiary based in the Bahamas called the Islamic Investment Company of the Gulf (IICG), who appear on DMI annual reports as wholly-owned subsidiaries of DMI.

What is interesting is that, in its motion to be dismissed from the 9-11 civil law suit, DMI filed a statement saying U.S courts had no jurisidiction over DMI because "DMI S.A. has no substantive contacts at all with this country (the United States). DMI S.A. has never done business, maintained a place of business or been licensed to do business in any U.S. jurisdiction." However, it now appears that its wholly-owned subsidiary did. The _Journal_ quotes a senior DMI official as saying that "DMI has sister companies and those sister companies have retained Overland occassionally as investment advisers."

DOJ's public motion came as the response to IICG's request for discovery in an civil arbitration hearing with disgruntled Overland employees. The judge's ruling granting the stay of discovery says that the "grand jury investigation of Overland Capital will be irreparably harmed" if discovery proceeds in the arbitration case.

The _Journal_ says that, according to corporate and legal records, Overaland's foreign backers have structured many of their U.S. investments through a network of shell companies in offshore havens such as the Cayman Islands. This allows the investors to to structure the investments as loans instead of equity, offering large potential tax benefits.

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