Exploring the U.S. Crime-Terror Nexus: Terrorist Networks and Trade Diversion

Experts argue that both organized crime groups and terrorist organizations raise funds through trade diversion, which involves the diversion of goods from a low-price to a high-price market for profit.  However, despite the growing body of literature on the links between crime and terrorism, there are very few studies that focus on trade diversion as a tool for financing terrorism. This project examines the nexus between crime and terrorism through a social network analysis of the Islamist extremist network, the “Hammoud Enterprise,” which was involved in trade diversion in order to finance its multi-million dollar operation based out of Michigan. The criminal conspiracy ran between 1996 and 2002, purchasing hundreds of cartons of cigarettes in low-tax or no-tax jurisdictions before ferrying them to other states for redistribution, and netted profits of up to $500,000 per week. The individuals involved were primarily Lebanese and Arabic speakers; shared allegiance to Hezbollah; had familial ties; and were motivated by the opportunity for illicit profit.