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Bush cites crackdown on money networks that work for 'mass murderers'

TYSONS CORNER, Virginia (CNN) -- Citing "another step in the fight against evil," President Bush announced Wednesday that the Treasury Department blocked the assets of 62 individuals and organizations connected with two financial networks that operate "at the service of mass murderers."

Bush said offices for the two networks -- al Barakaat and al Taqwa -- were closed in four U.S. states. U.S. allies, he said, had also taken steps against the networks.

"By shutting these networks down, we disrupt the murderers' work," Bush said at the Financial Crimes Enforcement Network office here. He said the networks handled money for al Qaeda, the organization headed by suspected terrorist mastermind Osama bin Laden, implicated in the September 11 terrorist attacks.

Treasury and Customs agents acting on warrants based on sealed court affidavits took actions Wednesday in Boston, Minneapolis, Seattle, and Columbus, Ohio, according to U.S. officials. Two people were charged in Massachusetts in connection with the crackdown, Attorney General John Ashcroft said.

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Treasury Secretary Paul O'Neill said federal agents raided and shut down eight al Barakaat offices Wednesday morning. In addition, assets were blocked and evidence seized at two other "outlets" of the company in Virginia, under provisions of the newly enacted anti-terrorism legislation, he said.

"This organization is now exposed for what it is -- a pariah in the civilized world," O'Neill said. "U.S. businesses and individuals are now forewarned, and prohibited, from doing business with this company."

Calling al Barakaat the "quartermasters of terror," O'Neill said it operated a number of legitimate businesses, including a company providing Internet service and a service that allowed Somali nationals in the United States to send money to relatives back in their homeland. Part of the "hundreds of millions of dollars" being moved through al Barakaat were skimmed off and diverted to al Qaeda, he said.

The president said U.S. allies had also taken steps to block assets affiliated with the two networks. He cited the United Arab Emirates, and Secretary of State Colin Powell mentioned Saudi Arabia, part of the administration's bid to underscore cooperation the United States has received from some Arab nations in the war against terrorism.

O'Neill said officials in Dubai, in the UAE, blocked al Barakaat assets Wednesday. U.S. officials said actions were also taken against the financial networks in a number of other nations, including Switzerland, Liechtenstein, Great Britain, Italy and Germany.

"We've built an international coalition to deny terrorists access to the world financial system; 112 nations have blocking orders in force and nations around the world have blocked at least $43 million in assets," he said.

Numerous accounts under review

The United States has blocked $24 million in assets of the al Qaeda and the Taliban, the ruling regime in Afghanistan, and another 962 accounts are under review, O'Neill added.

Bush described Swiss-based al Taqwa as "an association of offshore banks and financial management firms that have helped al Qaeda shift money around the world." He said al Barakaat "is a group of money-wiring and communication companies owned by a friend and supporter of Osama bin Laden."

He said both networks raise and distribute funds for al Qaeda. "They provide terrorist supporters with Internet service, secure telephone communications and other ways of sending messages and sharing information," Bush said. "They even arrange for the shipment of weapons."

Combined, the two networks have been the source of "tens of millions of dollars" in financial support for the al Qaeda network, a senior U.S. official involved in the operation said.

The two financial networks are part of the "hawala" system of informal money transfers used in the Islamic world. Hawala is a largely paperless financial system that relies on moneylenders, active both in the Middle East as well as in the United States.

While there are no official bank records or statements, underground hawala networks can move thousands of dollars around the globe in just hours. It is one of the areas being given greater scrutiny by federal investigators.

In addition, hawala dealers will be required to register with the Treasury Department by December 31, 2001 as part of new regulations issued in 1999 that created a new category of non-bank financial institutions called "money services businesses."

"This is a significant adverse blow to Al Queda," said one of the senior officials. "But is it alone sufficient? No," He acknowledged dozens of other organizations around the world are being investigated for supporting terrorists.

U.S. officials cited action in numerous nations, including Switzerland, Liechtenstein, Great Britain, Italy and Germany.

As part of the police action, Swiss police working with U.S. and Italian authorities detained two Egyptian men Wednesday for questioning in a Swiss town bordering Italy, The Associated Press reported.

After some six hours of questioning, the two men were allowed to return to their homes in Campione, said their lawyer, Pier Felice Barchi.

The two people charged in Massachusetts were identified in a criminal complaint as Liban and Mohamed Hussein, but their relationship -- if any -- and nationalities was not immediately available.

Ashcroft said the two operated "an illegal foreign money transmittal business" in Dorchester, Masschusetts.

-- CNN correspondents John King, Kelly Wallace and Producer Terry Frieden contributed to this report.