ShareThisWASHINGTON - Terrorist groups and organized crime syndicates are increasingly turning to the multibillion-dollar trade in counterfeit cigarettes, medications and DVDs to fund their operations.
For decades, there's been a brisk global trade in illegally dubbed movies, knockoff apparel and other intellectual property (IP) theft. But what is changing, according to law enforcement officials and industry experts, is who is running these enterprises. Increasingly, it is terrorist organizations and organized crime groups.
"Terrorist organizations are very similar to any other criminal organization. They need to earn money," said Jim Dinkins, director of the office of investigations at U.S. Immigration and Customs Enforcement, part of the U.S. Department of Homeland Security. "We've documented and we know that they're going to take the easy way out, fly underneath the radar, and IP theft is often one of those avenues that they can do that in."
Homeland security investigators point to two recent ICE cases as examples:
-- In February, four individuals and three Miami businesses were indicted on charges of exporting electronics to a terrorist gathering place in Paraguay known as Galeria Page.
-- In November 2009, a Philadelphia team peddling stolen cell phones and other electronics was indicted on charges of trying to purchase 10,000 machine guns and anti-aircraft missiles for Hezbollah, a terrorist group based in the Middle East.
A 2009 report by the RAND Corporation, a global think-tank, pointed out three cases where IP theft supported terrorists. The RAND study, which received funding from the Motion Picture Association, found:
-- The Irish Republican Army used film piracy, among other criminal activities, to fund its fight in Northern Ireland.
-- An Indian organized crime entity, D-Company, has been the "major syndicate" for pirated films in India. D-Company carried out bombings in Mumbai in 1993, killing more than 250 people.
-- A counterfeiting operation run out of South America has become "the most important financing center for Islamic terrorism outside the Middle East," providing $20 million annually to Hezbollah. This operation is apparently unrelated to the 2009 Philadelphia bust.
Internationally, 12 percent of IP theft cases are linked to other areas of organized crime, according to John Newton, program manager at Interpol, the international police cooperative including 188 countries.
Increasingly, law enforcement authorities around the world are seeing the same types of counterfeit products, Newton said. That's reflective of a shared supply chain. "All the indications are that it's a global activity," Newton said.
One area of particular concern is counterfeit medicine. In January, Interpol announced a multi-country police operation in southeast Asia that led to the seizure of 20 million fake and illegal medicines, including antibiotics, anti-malarial and birth control medicines, anti-tetanus serums, aspirin and erectile dysfunction drugs.
Bogus medications are a growth industry. According to the Pharmaceutical Security Institute, a drug maker-funded nonprofit group that works to diminish the health risk from counterfeit medicine, more counterfeit drugs are being found. Customs seizures and police and health inspector raids intercepted 2,003 fake medicine cases in 2009 -- a tenfold increase since 2002, data from the group shows.
This bogus medicine can be health hazards for several reasons, said Tom Kubic, executive director of the group. The pills could contain toxins. Or, if they contain minimal to no active ingredients, they could lead to deaths or complications that otherwise would have been avoided by taking the appropriate medication.
It's not yet known how especially close the connection is between terrorist groups and bogus medicines, Kubic said.
(E-mail reporter Isaac Wolf at wolfi(at)shns.com)
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
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