ATMs new gateways for terror funding and money laundering

The Financial Intelligence Unit (FIU) which received more than 17,000 Suspicious Transaction Reports (STRs) during 2009-10 financial year, has reported such incidents involving ATMs in its 66-page report to the Finance Ministry.

The elite unit headquartered in the national capital followed up these suspicious transactions with central security agencies to trace the individuals."The ATMs have emerged as the new gateways for terror funding. The trend seen is that one source remits the money from within the country or abroad and multiple individuals withdraw it from one or multiple locations. Such accounts, when detected, were immediately frozen by the government under provisions of the Unlawful Activities Prevention Act," a senior Finance Ministry official said.

Withdrawals from ATMs reduce the chances of detection of terror agents by police and intelligence agencies, the official said.

"A report was received from a bank on transactions in a savings account in a district in Kerala. The account showed cash deposits below Rs 50,000 across several branches in Kerala and Maharashtra, followed by withdrawals through ATMs.

"The report was disseminated to an intelligence agency. Enquiries revealed that the subject had gone to one of the Gulf countries for employment and had started his own business in flowers and curtains in Kerala on his return.

"Analysis of two bank accounts of the person and his son revealed remittances from Gulf and immediate cash withdrawal from an ATM at Hyderabad. Investigations showed business connections with an accused who was in police custody for involvement in a pipe bomb case. The money was withdrawn from Hyderabad-based ATMs by an associate of the accused and was allegedly used to facilitate terrorist activities," the FIU report said citing an instance of terror funding using ATMs.

Officials in economic intelligence units said they are also probing instances of usage of Nepal-based credit cards to withdraw huge sums of money from ATMs in Jammu and Kashmir