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JEestimony — lost

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U.S. SENATE COMMITTEE ON

BANKING, HOUSING, AND URBAN AFFAII

Subcommittee on International Trade and Finance

Hearing on "Hawala and Underground Terrorist Financing Mechanisms." Prepared Statement of Mr. Patrick Jost SRA International
2:30 p.m., Wednesday, November 14,2001 - Dirksen 538 Mr. Chairman and Distinguished Members of this Committee: My name is Patrick Jost. I am currently with SRA International, developers of Assentor®, which is a system for the analysis of email messages, instant messages and faxes in brokerages and other financial institutions. Assentor looks for indicators of activities such as money laundering and price fixing, and quarantines messages containing these indicators for review. We are currently enhancing the product to analyze other types of documents for possible indicators of hawala and terrorist financing. Prior to joining SRA, I was with FinCEN, the United States Department of the Treasury's Financial Crimes Enforcement Network. At FinCEN, I was responsible for South Asia—India, Pakistan and neighboring countries. While at FinCEN, I assisted many domestic and international law enforcement agencies with the analysis of cases involving hawala. I have seen hawala, or what I might refer to as "hawala techniques" used as a component of money laundering schemes for predicate offenses including narcotics trafficking, alien smuggling, insider-trading and political corruption. In conjunction with Harjit Sandhu of India's Central Bureau of Investigation, then detailed to Interpol, I undertook a detailed study of hawala that resulted in the publication of three reports—one on hawala, one on the money laundering situation in India and one on the money laundering situation in Pakistan. Among his significant contributions to these reports, Mr. Sandhu provided valuable information on the use of hawala as a component of terrorist financing. In the course of the preparation of these reports and my other work at FinCEN, I spent a great deal of time in South Asia. Given my longstanding interest in that part of the world, I improved my knowledge of Hindi and Urdu, and learned some Gujarati to assist me in my study of hawala and to provide effective support to investigations and analysis. would like to point out that there are two essential characteristics of hawala—the first is a network of hawala brokers or dealers, called hawaladars in Hindi and Urdu and often referred to as "hawala operators" in the English language South Asian press, and the second is the trust that exists not only between hawaladars but between hawaladars and their clients.

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http://banking.senate.gov/01_l lhrg/111401/jost.htm

6/30/03