Government accountants can play a critical role in stopping the flow of dollars that fund terrorist operations.
Thats the opinion of three faculty members in the West Virginia University College of Business and Economics in an article featured in the spring 2005 issue of the Journal of Government Financial Management. The journal is read by financial managers at all levels of government.
Richard Brooks, Richard Riley Jr. and Jason Thomas, faculty in the forensic accounting program, offer their insight inDetecting and Preventing the Financing of Terrorist Activities.
The article offers information on how terrorists finance their operations andlaundertheir money. One method exploits vulnerable government programs.
Terrorists would likely derive considerable pleasure from obtaining money from the U.S. government and using that money to fund terrorist activities in the United States,they state.
The USDA -FSP food stamp program is an example. Terrorists can set up a storefront that offers customers cash for food stamps at less than face value. The store can then submit the stamps to the government for full reimbursement and use the profits to finance the activities of terrorists.
The authors cite a case in which a man with suspected terrorist connections was accused of redeeming $1.6 million in food stamps while his store sold only $149,000 in food.
Government accountants are especially well placed for detecting the kinds of financial transactions that signal terrorist activity. Thesered flagsinclude checking accounts opened with debit cards or cash, bank accounts that have many transactions in amounts that fall just below federally mandated reporting thresholds, the use of wire transfers for business activities that would not normally generate such activity, and multiple accounts at a single bank with no apparent legitimate purpose.
The WVU authors conclude that by learning and being alert for these signals of terrorist operations, accountants can help thwart the kind of tragedy that shocked the world on Sept. 11, 2001.
In 2004, the College of Business and Economics established a graduate certificate program to provide training in forensic accounting and fraud investigation and is also helping to develop standards for such a program through a grant from the U.S. Department of Justice.
For a copy of the article or information about the forensic accounting program at the WVU College of Business and Economics, contact Richard Riley at Richard.Riley@mail.wvu.edu or 304-293-7849.