Wail Salem (AKA Salem Wail Taleb) landed at Ben Gurion Airport in early July, 1996. Arriving from Chicago with US and Jordanian passports in hand, Salem went through Israeli customs without arousing any more suspicion than most other visiting Palestinians now living in the United States. Until our reporters placed an inquiry, Israeli police and security officials said that they had never heard of him. They should have.
According to law enforcement officials in the US, and terrorism experts in Israel, Salem fits the profile of a major Palestinian criminal who could also be a major fund-raiser for radical Islamic groups.
Salem is no longer simply the object of vague suspicions. He was arrested in Chicago last February, a few days after returning to the United States after a two-year stay mostly in the Palestinian Authority and Jordan. Further, US law enforcement sources say that Salem is being charged with stealing millions of dollars in a series of illegal scams. The money is not accounted for, and it could quite possibly be used to finance Islamic terrorist groups in Israel and the territories.
Chicago is considered one of several important centers in the US used by Islamic extremists to raise funds for their murderous actions half a world away. Just last month, US federal authorities seized 1.5 million dollars in cash and property from a Chicago-based Islamic organization that allegedly was part of an elaborate money-laundering scheme to fund Middle East terrorism by Hamas. Some of the seized assets belonged to Mohammad Salah, who was previously convicted and served a five year prison term in Israel for channeling funds to support Hamas terrorist activities. According to an FBI affidavit filed in court, Salah funneled money from Europe and the Middle East to a US-based network of Hamas supporters who then provided cash to Hamas terrorists in Israel and Palestinian Authority controlled areas. Some of this money went for buying munitions and weapons in attacks against Israelis.
Like Salah, Wail Salem was ostensibly a simple storekeeper in Chicago. Salem is now out on bail under what amounts to house arrest, forced to wear an electronic bracelet so US Federal authorities can monitor his movements until his trial scheduled for November. In the meantime he is allowed to work in the African Supermarket in Chicago. We called on several occasions. The store confirmed that Salem worked there but he was never available to speak on the phone. Salem faces charges of heading a Palestinian gang involved in what law enforcement officials told our reporters was "the largest food-stamp fraud in the history of Chicago." Officials say Salem's gang stole over $12 million in the scam. Salem allegedly ran other illegal operations, and the total dollar amount may be much higher.
"There is no exact figure for the amount of money raised in the US to finance terrorist activities." This according to the Prime Minister's Deputy Terrorism advisor Sammy Mutzafi who told our reporters that "It's nearly impossible to stop the money from reaching Hamas and millions of dollars get through annually."
Our reporters have discovered that Salem, 33, was allegedly involved in other major scams including a fraudulent claim against an American life insurance company, an increasingly common technique used to bilk insurance companies of billions of dollars.
In this case, Salem's wife was claiming her husband was dead. The scam was exposed following an investigation inside the Palestinian Authority conducted by US private investigator Steven Rambam. PA officials told our reporters that their cooperation in the investigation of Salem marked the first time they had ever cooperated in the exposure and prosecution of any Palestinian in the United States. Israeli officials confirmed that to their knowledge PA cooperation in the case was a first.
After arriving in Israel in 1996, Salem traveled to areas under the control of the Palestinian Authority. At first he stayed mainly in the Bethlehem area and may have also visited the town of Bidu, where he was born in 1965. According to documents submitted to the insurance company by Amal Salem, wife of the 'deceased,' which were obtained from sources in the PA, Salem suffered a heart attack and was taken to the Specialty Surgical Center on Manger Square in Bethlehem, where he was later pronounced dead.
The documentation, printed on a Specialty Surgical Center letterhead, describes the incident as follows: "This is to certify that Mr. Salem Wail Taleb, aged 31, was brought to us on July 18th at 7pm in a state of unconsciousness, with difficulty in breathing, low blood pressure 30/50, sweating, very low pulse (bradycardia)." The report went on to say, "A friend, who brought him in, said that "Salem put his hand on his chest, unable to breath or talk and just collapsed in a heap a few minutes after receiving some bad news." The report concluded, "He passed away 30 minutes after admission with a severe heart attack. He stopped breathing, no pulse, no heart sounds and no vital signs. The patient was declared dead 35 minutes after admission." This document on Specialty Surgical Center letterhead indicated that a copy of the report was sent to the Palestinian Health Department, so that a death certificate could be issued for Salem.
A second document was also submitted to the life insurance company in the US, printed under an official Palestinian Health Department letterhead, it was a death certificate from the PA, issued on July 20, 1996. It included all the relevant details from the surgical center report as well as the clerk's signature, a PA Health Ministry seal and an ID number, which security sources say belongs to another Palestinian living in Jerusalem. The American insurance company declined to comment on the record on this specific case because it's considered sub-judice. But our reporters did get confirmation that the insurers received the death claim and documentation from Salem's 'widow.' In keeping with standard procedure, the insurance company chose not to pay the claim until they could verify the authenticity of the documents.
In recent years, several insurance companies have received many such claims on people who allegedly died overseas in countries notorious for sloppy, or corrupt bureaucratic systems. "Fake deaths are a growing concern from insurers," The New York Times reported last July. "Fraud has been increasingly plaguing the American life insurance industry. A central thread is a trip abroad. Any place will do where record-keeping is slipshod and where civil servants taking baksheesh (bribes) is a cultural hallmark." According to the Times article, "Steven Rambam, the head of Pallorium Inc., had handled dozens of these cases."
Nobody knows for sure the full extent of insurance fraud in the US, but trade association officials say it is on the rise. Last year, investigators for half a dozen insurance companies convened in Florida to share information on how to counter fraud. One of the speakers was Rambam who explained, "It's too easy to manufacture alternative identities, as a first step to defrauding the insurer." Investigators agree that the problem is to escape detection after filing a claim. Unfortunately, filing bogus life insurance claims carries little risk. Criminal prosecution is rare, even when the malefactor is caught red-handed. When insurance companies go to the authorities, they often have a hard time getting the attention of prosecutors who have their hands full with violent crimes. In even the strongest cases for the prosecution, getting a conviction is problematic. Kenneth Kessler, a senior investigator for the California Department of Insurance told the Florida meeting, "All your documentation and witnesses are overseas. You have a major hearsay problem to overcome."
Rambam apparently had suspicions of organized criminal involvement in the Salem case. Although under US law, he was restricted in the information he could provide our reporters on this specific case, Rambam said, "Certain organizations, including radical Islamic groups view life insurance companies as the perfect target for a 'just' scam. They see insurance policies as irresistible opportunities to take a lot of money from some enormously wealthy, faceless American corporation, and taking that money to help the Palestinian cause."
The insurance company decided to hire Rambam, aware that he had worked in Israel on other investigations. The problem in Salem's case was that it involved the Palestinian Authority bureaucracy. Neither Rambam, nor any other public or private American law enforcement agent had ever successfully dealt with the PA, which until this case had never cooperated in any US investigation of a Palestinian citizen.
Rambam is nothing if not industrious. The US investigator gained international recognition last year for his undercover operation in Canada (first reported in the Post and, later on CBS's 60 minutes) which revealed the presence of 150 Nazi war criminals, many of whom he met face to face using false pretense. Rambam also tracked down the real John J. Sullivan after the Hebrew press claimed it was an alias used by Binyamin Netanyahu when he lived in the US, and made headlines for exposing weak links in airport security by demonstrating how easy it is to smuggle weapons aboard planes.
To crack the Salem case Palestinian sources report that Rambam began his investigation by traveling to Bethlehem to visit the Specialty Surgical Center. Sources report that under questioning the center's staff confirmed that the SCC letter submitted as part of the Salem insurance claim was a fake, and that in fact not only had Salem not died there, but no one had ever died at the center.
Sources say Rambam then went to the PA Security Services office in Ramallah. The Palestinians confirm that Rambam, accompanied by his Israeli associate Allon K. were brought into an office to meet a PA security agent and other officials from the PA. Rambam, who is legally prohibited from detailing the discussions with the PA, did confirm that the meetings took place. He told our reporters, "The Palestinians seemed to be shocked to see me there in Ramallah." He added, "My first visit to the PA was during the unrest following the opening of the Hasmonean Tunnel in Jerusalem and the checkpoints between Israel and the PA controlled areas were sealed."
A source close to the Palestinian investigation told our reporters that when Rambam asked about Wail Salem and the authenticity of the PA death certificate, one of the PA agents stated, "Yes, we know about this guy. He's in Amman right now." Rambam still needed to get an official letter from the PA, certifying that Salem's death certificate was a phony. In March, 1998 PA officials in Ramallah told Rambam that he would have to go to the PA Interior Ministry's headquarters in Gaza to apply for the letter. He ended up having to make four trips on four successive days. In Gaza, Rambam kept getting bumped up the ladder to more senior PA officials, until eventually he met with the Director General of the Interior Ministry General Omar Ahmed Shibli and with the director of the Ministries 'Nationalities' Division Jamal el-Shannout.
The Palestinians wouldn't prepare the letter for Rambam the first day and told him to come back the next morning. He ended up coming back for about 12 hours of meetings with Palestinian officials. "Basically, we spent a lot of time talking and drinking black coffee," said Rambam, who has worked on cases in dozens of countries during his 20 year career. Rambam said, "The Palestinian officials were better organized, and much more professional than I had been led to expect. One person, probably an intelligence officer, was very well informed and seemed to know a lot about people on the Israeli side. One Palestinian even asked me if I knew who 'the Rambam' was, and began to tell me about 'Rabbi Musa.'"
"I was also, frankly very pleased by the pro-American attitude of some of the Palestinian rank-and-file. One of the Palestinians took me aside and said, "You know we're working very closely with some people who you know. We want to have a much closer relationship with American law enforcement."
The PA's Jamal el-Shannout told our reporters that Rambam was not immediately given the document in question because, "We had never issued such a document relating to a foreign prosecution, and we didn't have a policy on the issue." Rambam at one stage told his hosts, "Salem forged official PA documents. If you want to be treated like a state then you have to act like one, and assist with Salem's prosecution." Rambam was finally given the letter he had come for. Shannout told our reporters, "This is the first time we ever dealt with such a case. We were happy to help, and grateful to Rambam for his patience and professionalism." Shannout claims that the PA was not certain what were the motivations of Salem's scam. Our reporters have confirmed that the letter from the Palestinian Authority was given by Rambam to US law enforcement officials.
Although Salem may soon be charged with federal crimes related to his fraudulent death claim, he has already been charged with food stamp fraud. He was arrested last February when he suddenly resurfaced by crossing the border from Canada to the United States. He was arrested in his Chicago home a few days later.
Counter-terrorism experts in the US say that food stamp fraud is a traditional favorite of Hamas money raisers. Our reporters have obtained a copy of the United States District Court criminal complaint issued against Salem in December, 1996, and which was used in his arrest this year. Assistant US Attorney Madeleine Murphy told our reporters that Salem was being charged with, "The largest case of food stamp fraud in Chicago history." Murphy said the Salem gang in Chicago were all Arabs and consisted of his wife, six other relatives and one unrelated associate.
Other US officials say Salem's case is part of a much larger picture. "This is not an isolated incident," says Robert Pledgler, assistant special agent in charge of the Chicago office of the Internal Revenue Service. Pledgler adds that the defendants "represent a group of criminals who open small neighborhood stores that aren't in the food business at all, but operate with one goal in mind. To defraud the federal food stamps program intended to feed the poor."
Stores controlled by Salem in the Chicago area allegedly redeemed as much as ten times more in food stamps than it claimed in sales. Officials explained that in some places food stamp holders can receive about $70 in cash for every $100 worth of food stamps. Unscrupulous grocers can then turn around and redeem the food stamps from the federal government at full face value, realizing a 30 percent profit.
Murphy says that Salem's gang stole about $12.5 million. All of the money is missing, and Murphy says she has no idea whether Salem could have brought some of the money to Israel and the West Bank in his suitcase Sources told our reporters that Salem left some money in Bethlehem for the construction of a family home. The remaining millions are currently unaccounted for, and could end up in a Hamas charitable front.
The fact that Wail Salem decided to return to the US last February intrigues Murphy. It could be that he got word that Rambam was on to him following his inquiries with the Palestinian Authority. He must have felt the heat, because a date had already been scheduled for Amal Salem's lawsuit suing to force the insurance company to pay out the policy on Wail. Ironically, Amal and Wail Salem's arraignment for the food stamp fraud case ended up being scheduled for the same date, and the same time, but on a different floor of the Everett McKinley Dirkson Federal courthouse in Chicago.
Murphy told our reporters that Judge Koor, who was handling the insurance case on the 14th floor, was heard remarking to a colleague, "I'd like to go up to the 18th floor and see the dead guy being arraigned."
If, in fact Salem's gang was raising money for radical Islamic groups, he would not be the first Palestinian storekeeper to head a Hamas gang in Chicago. Sources in the US and Israel speculate that Wail Salem may have set up his operation to fill the void created by the arrest and conviction of Mohammad Salah in Israel in 1993.
Salah admitted to Israeli authorities that on orders of Abu Marzouk, he traveled to the West Bank in early 1993 to coordinate a terrorist attack against Israel. He was carrying a great deal of money estimated at several hundred thousand dollars. Money he brought in was also used to buy weapons later used in terrorist attacks, including an M-16 rifle used to murder an IDF soldier in Hebron. Until his arrest, Salah was a used-car salesman and the owner of the Holy Land Bakery and Grocery on Chicago's north side. His Hamas partner Mohammad Jarad owned a grocery store in Chicago. Like Salah and Jarad, Salem is also from Oak Lawn, a Chicago suburb widely known to be a center of radical Islamic activities.
Israeli security officials are well aware of Hamas efforts to funnel money into the hands of terrorists via front groups disguised as charitable organizations. This led to the decision last year to shut down the Holy Land Foundation in Israel, which received millions of dollars in donations raised primarily in the United States by the American branch of the Holy Land Foundation, based in Texas.
In May 1997 Israeli security forces raided the Holy Land offices located in an Israeli controlled area outside Ramallah. Officials seized documents linking the group to its US counterpart. Anti-terrorism official Sammy Mutzafi told our reporters, "If Salem is indeed affiliated with Hamas, the stolen money could have disappeared into one of several Palestinian Islamic 'charities' in the US. Mutzafi admits that it is very difficult to prove which money is then used for charitable purposes and which money goes to fund terrorism.
The US government is convinced that beyond its fundraising activities, Hamas uses fraud in the United States to fund the activities of its terrorist wing. Speaking recently to the Senate Judiciary committee on Terrorism, Richard Rhode, the Secret Service Deputy Assistant Director for Investigations said that, "The ability of criminal enterprises to utilize the proceeds of fraud schemes to further other crimes can not be underestimated." According to Rhode, "white collar terrorism" is being committed to fund other illicit activities. The Secret Service investigator says the Middle East terrorist groups are also engaged in counterfeit dollars, credit card and coupon fraud as well as illegal cloning of cellular phone numbers.
Undoubtedly, one of the most productive criminal conspiracies organized by supporters of radical Arab groups is the distribution of Iranian-made counterfeit US $100 bills. These counterfeit bills are so undetectable that the US Secret Service has branded them 'Superbills.' Experts say that superbills are often sold by Hamas supporters and associates through the use of organized criminal groups. Working undercover in the role of a supposed US Mafia 'associate,' late last year Rambam met with a number of Hamas supporters outside of Israel in the US. Working with an American TV crew, they were able to view and secretly videotape or audiotape discussions on the counterfeiting activities. An American TV producer who worked with Rambam and US law enforcement officials provided a copy of a videotaped meeting for our reporters to view. The producer also confirmed that both the Secret Service and Scotland Yard confirmed the Hamas affiliation of Rambam's contacts.
Financial institutions estimate losses from Middle Eastern frauds in the tens of millions of dollars annually. Financial institutions estimate losses from Middle Eastern frauds in the tens of millions of dollars annually. American private investigator Ben Jacobson claims that Islamic terrorists raised an estimated $150 million in assorted food coupon schemes last year alone. Hired by A.C. Nielson, the largest consumer coupon clearing house in the US Jacobson said, "Fraud schemes are continuing unabated, unchallenged and facilitated by computers and the Internet. Palestinian merchants in the US are among the biggest culprits, redeeming coupons for products never purchased, then sending $100 million in cash to the Middle East."
Law enforcement sources in the US and Israel estimate that the combined income from criminal activity and frauds in North America may net radical Islamic groups affiliated with Hamas more than half a billion dollars annually, possibly representing the majority share of the Hamas budget.
"Personally, I have no doubt that there is a straight line between criminal activity in the US and Canada and suicide bombings in Israel," says Rambam. Israeli officials agree, pointing out that the families of Hamas suicide bombers receive financial support, including lifetime medical care and educational tuition for everyone in the suicide bomber's family, all paid by Islamic 'charities' known to be affiliated with Hamas.
But knowing about the crimes and being able to do something about it are not always the same thing. Even though ten Palestinian groups were placed on the US list of banned terrorist organizations, until last month's operation against Salah in Chicago, no money had been seized from any of them. The FBI says that catching the crooks in these cases is both difficult and time-consuming. Oliver "Buck" Revell, the former chief of counter-terrorism for the FBI is less optimistic. "The Palestinian movement has a tremendous infrastructure in the Unites States and enjoys unparalleled freedom to raise funds and recruit members. They operate through structures that sound humanitarian. One of the primary purposes of these groups is to launder money and get it into channels where they can support their organizations overseas."
Philip Wilcox, counter-terrorism expert for the State Department admits, "It's a big concern for us. Money that is collected for charitable purposes is diverted for military and terrorist activities." Tracing the money is the biggest problem. In recent years federal agencies have improved their ability to track some funds, but banking secrecy laws, and the complexity and volume of the transactions makes it difficult, indeed. What is known is that until 1994, the biggest "contributions" were funneled to terrorist cells in the territories by Moussa Abu Marzouk.
Following his arrest in 1995, Marzouk, a one-time Virginia-based Palestinian, was deported last year from the US to Amman, Jordan where he now operated openly as a Hamas leader. Salem has spent most of the past two years living in Amman. If he is indeed a money raiser for Hamas, Salem and Marzouk would have had ample opportunity to figure out ways to move stolen millions raised by Salem to Hamas.
Rambam says, "Based on the federal indictment, Salem is clearly a thief and a fraud with an organization behind him, but there is no absolute proof tying him to Hamas. There is no smoking gun and no Hamas ID card. But certainly, Salem fits the profile of what Hamas fund-raisers do."
An American source close to the case told the Post, "The fact that Salem was able to get these official PA documents, with all the correct seals and stamps, indicates that this was probably not some low-level scam." And when Rambam spoke with Palestinian security agents in Ramallah, they did not have to check any files. They did not have to look for the information. They knew that Salem was alive and in Amman. They knew exactly who he was.