Terror investigation looks at Muslim investment fund

Wall Street Journal:

The Justice Department is investigating possible criminal tax-law violations by a Boston private-equity firm that manages hundreds of millions of dollars for Muslim investors in Europe and the Middle East and is affiliated with a Swiss investment group U.S. authorities suspect of financing Islamic extremists.

Federal prosecutors disclosed a grand-jury probe of Overland Capital Group Inc. in filings last week with U.S. District Court in Boston. While the Boston grand jury is examining suspected tax evasion related to complex investment structures, the case is being handled by a prosecutor from the Justice Department's counterterrorism division, the filing states.

In the years since the Sept. 11 attacks, U.S. counterterrorism agencies have been stymied in several attempts to bring terrorism cases against wealthy individuals from the Middle East. Some prosecutors have pushed the government to use tax laws as a more effective approach, a method famously employed against gangster Al Capone in 1931.

Overland, which doesn't disclose its ownership, says on its Web site that it has made more than $1.5 billion in U.S. investments for its clients, largely in real estate, since its founding in October 2001.

Legal records say Overland is controlled by a Geneva-based financial group known as Dar Al-Maal Al-Islami Trust, which was founded by a senior member of the royal family of Saudi Arabia. The U.S. government is treating the companies as related: The Justice Department is examining "acts and practices" of Overland and a DMI subsidiary "that implicate potential violation of the Internal Revenue Code," the filing states.

DMI is the hub of a network of banks and investment funds across Europe and the Middle East that cater to Muslims interested in strictly following Quranic principles, such as a ban on collecting interest. Some DMI affiliates came under scrutiny by U.S. counterterrorism agencies in the mid-1990s for suspected connections to extremists, government records show.

There is much more and of course the people being investigated deny any connection with terrorist. One of the investments of the group includes 30 rental units on the top floors of the Four Seasons Hotel in Houston, Texas. They are nice units in a great downtown Houston location. It is an interesting article worth reading in full. It does suggest some transfer of funds to Hamas some of which was into the US.


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