Volume 1, Issue 1, October 2003 

“Integrity is the CORNERSTONE of our financial systems.” 

Financial Investigations 

Around the World 

ICE in Iraq 

Since the commencement of Operation Iraqi Freedom, ICE 

Senior Special Agents have been on the ground in the Iraqi 

Theater of Operation (ITO), locating and identifying Iraqi front 

companies and procurement networks. These companies and 

networks were allegedly used to assist with procurement and 

further Iraq’s attempt to acquire, develop, and maintain weapons 

of mass destruction and advanced weapons systems. ICE’s 

efforts involve the utilization of financial records, import and 

export documents and related sources. As an example, ICE 

Special Agents in Baghdad are working jointly with Central 

Bank of Iraq (CBI) employees in reconstructing the financial 

history of Iraq in an effort to locate hidden regime assets and 

identify additional investigative leads pertaining to violations of 

U.S. Federal laws. 

ICE Agents recovered approximately $32 million of the previous 

regime’s hidden assets. Additionally, ICE assisted U.S. Military 

Forces in the recovery of millions more in U.S. currency in Iraq. 

In April 2003, ICE initiated Operation Iraqi Heritage, an effort to 

identify and recover cultural property items looted from the Iraq 

National Museum. ICE, assisted by U.S. Military Forces, has 

recovered over 39,400 manuscripts and 700 artifacts. 

ICE Agents Arrest Father-son Team Accused of Arming 

Saddam Hussein 

On October 15, 2003, officials from ICE announced the arrest of 

Sabri Yakou, 69, and his son Regard Yakou, 43, on charges of 

brokering the sale of six armed patrol boats, worth some $11 

million, to the Saddam Hussein regime prior to the recent war in 

Iraq. Sabri Yakou, an Iraqi native, is a legal permanent resident 

of the United States with businesses in California, Singapore, 

Iraq, and elsewhere. His son is a naturalized U.S. citizen. The 

arrests were the first to result from the deployment of ICE teams 

to Iraq in March of this year to search for evidence that U.S. 

persons or entities may have supplied Iraq with arms, technology 

or materials in violation of U.S. laws and U.N. embargoes. To 

date, ICE agents have uncovered evidence in Iraq that has 

prompted roughly 30 ongoing investigations into possible illegal 

exports of U.S. arms, technology or materials to Iraq. (see 

http://www.ice.gov for full Press Release)

TRIPWIRE 

Cornerstone 

A New ICE Financial Investigations 

Division Program 

Secretary Ridge’s Announcement, New 

York, NY 

On July 8, 2003, DHS Secretary Tom 

Ridge unveiled U.S. Immigration and 

Customs Enforcement’s (ICE’s) financial 

programs designed to safeguard the 

integrity of our nation’s financial systems 

against criminal exploitation. Secretary 

Ridge announced the launching of 

Cornerstone – a new ICE Financial 

Investigations Division program - to 

identify vulnerabilities in financial systems 

through which criminals launder their illicit 

proceeds. Cornerstone will develop a 

working partnership with industry 

representatives to share information and 

eliminate financial industry-wide security 

gaps that could be exploited by criminal 

organizations or terrorists. As part of the 

Cornerstone program, ICE has created a 

unit solely dedicated to provide training to 

the private sector on identifying and 

preventing exploitation by criminal 

organizations. 

‘Cornerstone’ continued on page 2 

In This Issue: October 2003 

Cornerstone/Financial 1

Division Overview 

ICE in Iraq 1

Emerging Financial Vulnerabilities 2

Financial Tidbits 3

The Cloak and Dagger of ATMs 4

Fraudulent Mortgage Schemes 4

ICE Field and Financial 4

Community Outreach 

Outreach Calendar of Events 5
TRIPWIRE 

2

‘Cornerstone’ continued

Cornerstone will continue to: 

Identify and assess the means and methods used 

by criminals to exploit financial systems in order 

to transfer, launder and otherwise mask the true 

source of criminal proceeds. 

Work with specific private sector industries to 

gather new intelligence and shut down 

vulnerabilities found within existing financial 

systems. 

Dedicate Special Agents at all 25 field offices as 

liaisons to the private sector. 

Investigate and prosecute criminal organizations 

exploiting traditional and emerging nontraditional financial systems. 

Work with financial institution security teams to 

discern how criminal organizations exploit 

financial systems in their industry. 

Provide the private sector with TRIPWIRE, a 

quarterly report detailing specific examples of 

how certain U.S. financial systems are being 

exploited by criminal organizations to transfer, 

launder or mask the true source of criminal 

proceeds. TRIPWIRE will also provide 

recommendations to industry on detecting and 

preventing such exploitation. 

Cornerstone Special Agents Serve as Subject 

Matter Experts 

Cornerstone is staffed with Senior Special Agents 

who serve as subject matter experts in various 

disciplines, including fraudulent schemes, money 

service businesses, casinos, bank regulators, 

alternate remitters, outbound currency initiatives and 

human smuggling/human trafficking. These agents 

work with a broad spectrum of Federal, state and 

local agencies and industry/private sector 

representatives in support of the Cornerstone 

mission. 

Other Programs Within the Financial 

Investigations Division 

Money Laundering Coordination Center 

(MLCC)/Intake/Field Support Unit 

This unit is staffed with Senior Special Agents and 

Intelligence Analysts, overseeing the Headquarters 

command and coordination center that collects, 

develops, manages and disseminates leads to the 

field. This unit is composed of the Money 

Laundering Coordination Center (MLCC), an 

interagency clearinghouse for undercover money 

laundering operations, Intake, which coordinates and 

disseminates investigative financial leads, and a 

Field Support Section, which provides necessary 

investigative assistance. 

Financial Programs 

This unit is staffed with Senior Special Agents as 

Program Managers, targeting money laundering 

activities, currency smuggling and other financial 

investigations. Further, this unit supports field level 

financial investigations and national initiatives. 

Emerging Financial Vulnerabilities 

“The Matricula Consular Issue” 

The Matricula Consular is an identification card 

issued to citizens of Mexico residing in other 

countries, whether or not they are legally in that 

country, to include the United States. In practice, 

ICE has found that this card is most often carried by 

individuals who do not have lawful status in the U.S. 

The Mexican Consulate is responsible for issuing the 

cards and maintaining data pertaining to these cards. 

The major security issue surrounding the cards is the 

use of a Mexican birth certificate as the principal 

document to obtain a matricula. Mexican birth

certificates are often difficult for authorities to 

authenticate and may be issued based upon 

unverifiable information, such as statements of 

witnesses to the birth, baptismal records, etc. To 

compound the issue, the U.S. Government lacks 

regulatory oversight over the standards, documents 

and data utilized by Mexico to issue the card. 

DHS Undersecretary, Asa Hutchinson has stated that 

general acceptance of foreign government-issued 

identification documents makes enforcement more 

difficult, particularly if the documents allow access 

to other types of documents such as state issued 

driver’s licenses. Further, the U.S. Department of 

Justice has concluded that the matricula is not a 

reliable form of identification. This said, 74 of our 

nation’s 9,000 banks now accept the card as a form 

of identification. No major bank in Mexico lists the 

card among identification it accepts, and only 10 of 

Mexico’s 32 states and districts recognize the card as 

a valid identification document. 

‘Vulnerabilities’ continued on page 3 
TRIPWIRE 

3

‘Vulnerabilities’ continued 

PHOTO

Presecurity feature matricula 

PHOTO

Matricula with security features 

Over one million matriculas issued by Mexico 

before 2002 are still valid and in circulation. 

Unfortunately, these cards have no security features. 

Mexico issued over one million of an improved 

matricula in 2002, but does not have a system in 

place to authenticate identification documents or to 

safeguard against duplicate card issuance. 

These identification cards are now printed 

bilingually and expire five years after the date of 

issuance. Mexico has added several features to 

prevent counterfeiting. Valid cards have a serial 

number printed on both the front and back of the 

card. On the face of the card, you will find a 

photograph of the cardholder, the cardholder’s name, 

a local U.S. address and the card’s expiration date. 

Because of the growing acceptance of the matricula, 

several other foreign governments – including 

Guatemala, Honduras, Poland, Peru and El Salvador 

– are preparing to issue similar cards. The inherent 

danger in the use of such cards is that in matters of 

national security, identification verification and 

other crucial issues, the U.S. Government will be 

reliant on the scrutiny and security of foreign 

governments. DHS Secretary, Tom Ridge has 

advised that institutions accepting the matricula card 

do so at their own risk. 

Financial Tidbits

ICE’s Forensic Document Lab (FDL): 

The FDL, located in McLean, Virginia, supports 

ICE’s fight on crime. The FDL is the only Federal 

crime laboratory dedicated almost entirely to the 

forensic examination of documents. This is a unique 

operational/intelligence enforcement tool employed 

by ICE to authenticate identification and other 

documents. 

Federal Trade Commission (FTC) Survey: 

On September 3, 2003, the FTC announced that 

more than 27 million people have been victims of 

identity theft in the last five years. According to the 

FTC, in the last year, 9.9 million people were 

victims of identity theft, which cost them $5 billion 

and cost businesses and financial institutions nearly 

$48 billion. Credit card fraud followed by bank and 

utility fraud, were the most common forms of 

identity theft. 

Lawyers Charged With Immigration Fraud: 

In August of 2003, ICE and other Federal agencies, 

arrested and charged two Virginian lawyers and a 

restaurant owner with immigration fraud for 

allegedly conspiring to prepare and submit more 

than 150 fraudulent employment applications. The 

two lawyers allegedly prepared fraudulent 

applications, sold them for between $10,000 to 

$50,000 to Korean immigrants, who then used them 

to obtain green cards. 
TRIPWIRE 

4

The Cloak and Dagger of ATMs 

Developed by El Dorado Task Force 

In July 2003, the ICE El Dorado Task Force in New 

York City, in conjunction with the NY/NJ High 

Intensity Financial Crimes Area (HIFCA) Task 

Force, met with a major New York based financial 

institution’s, Fraud Prevention and Compliance staff, 

regarding issues involving independent ATMs and 

their potential for fraud and abuse. During internal 

compliance reviews by the firm, a number of ATM 

businesses were identified as having abnormal 

account activity. Although review of these accounts 

found no reportable violations at the time, the firm 

was concerned by the abnormalities. Concurrently, 

during a comprehensive analysis involving the 

movement of money orders, HIFCA concluded that 

a number of ATM businesses that are issuing agents 

of money orders or otherwise involved in the money 

order transactions appear to be conducting 

suspicious financial activity. El Dorado and HIFCA 

have identified several possible schemes that could 

be used to effectively launder illicit proceeds 

involving ATMs. El Dorado/HIFCA have identified 

the following indicators and vulnerabilities: 

The consistently heavy use of independent 

ATMs at locations that do not appear to support 

large volume business (i.e. local “bodegas” or 

other stores) 

The users of independent ATMs are willing to 

pay a service charge for each transaction, 

(limited to $200) when they can conduct their 

business at a nearby bank branch for no fee 

The potential of independent ATM 

owners/operators stocking their machine with 

illicitly derived cash 

The automated settlement process is totally 

unregulated and whose activities and 

transactions are not reportable 

No background checks or other verification 

processes are required or conducted on 

purchasers or owners of independent ATMs 

As a result of ATM transactions, banks will have 

a debit on the account of the user or a credit to 

the account of the ATM owner. In both of these 

instances, the transaction is processed through 

an account settlement processing service (i.e. 

NYCE, Core Data, Cirrus etc). Banks typically 

see only one side of the transaction and accept 

the transaction from the settlement process. 

They do not know the actual ATM location, nor 

do they know the type of activity at the ATM 

location. Therefore, as far as the bank knows, 

the funds entering or leaving an account via 

electronic settlement is “clean” money. 

“Buying” into the American Dream 

Real estate agents and mortgage brokers say a large 

number of illegal immigrants appear to be finding 

ways to buy their first homes. These purchases are 

just one more example of the extent to which the 

nation’s estimated 9 million illegal immigrants are 

integrating themselves into American society. 

When applying for a mortgage loan, illegal 

immigrants have trouble documenting their income 

and proving their credit worthiness. Often, illegal 

immigrants will obtain and utilize fraudulent 

documents, such as Social Security Card’s (SSN’s), 

driver’s licenses, proof of residency, etc. In 

addition, illegal immigrants can obtain an Individual 

Taxpayer Identification Number (ITIN) issued by 

the Internal Revenue Service (IRS) before 

attempting to purchase a home. No criminal 

background check is required before applying for an 

ITIN. Many financial institutions now accept ITINs 

from illegal immigrant customers as a primary form 

of identification. 

The potential loss to financial institutions, due to 

default and foreclosure, rests in the inability to track 

or obtain restitution from illegal immigrants who 

have the ability to easily flee or change their 

identity. 

Outreach to ICE Special Agents and 

the Financial Community 

Cornerstone Conference, Bethesda, MD 

September 22 to 26, 2003, Cornerstone hosted a 

training conference in Bethesda, MD. Various ICE 

entities and representatives from the financial 

community participated in the training of field 

Special Agents in the identification and investigation 

of financial systems vulnerabilities. 

‘Outreach’ continued next page 
‘Outreach’ continued 

SHARE Program Conference, New York, NY 

On behalf of DHS, Cornerstone will soon host a 

Systematic Approach to Reducing Exploitation 

(SHARE) Program conference in New York City. 

This conference will include meetings with CEOs, 

Anti-Money Laundering officials and financial and 

trade sector officers. These meetings will lead to the 

development of training for the private sector to 

identify and develop methods to detect suspect 

violations. If your institution/corporation is 

interested in attending or has information to SHARE, 

please contact Cornerstone. 

Future Cornerstone Conferences and Training 

Cornerstone is planning and scheduling future 

conferences and training seminars. In addition, as 

part of its outreach program, Cornerstone will offer 

individualized training seminars to financial and 

industry sector businesses around the country. 

Cornerstone subject matter experts will conduct 

these conferences and seminars. A calendar of 

events will be included in future TRIPWIRE 

publications.

Calendar of Events 

Special Event: Cornerstone Conference 

Place: Bethesda, Maryland 

Time: September 22-26, 2003 

Special Event: SHARE Program Conference 

Place: New York, New York 

Time: TBA 

TRIPWIRE is the official newsletter of Cornerstone, 

a unit of the Financial Investigations Division, 

Office of Investigations, U.S. Immigration & 

Customs Enforcement, U.S. Department of 

Homeland Security. TRIPWIRE is published 

quarterly by Cornerstone through the ICE Office of 

Public Affairs. 

Secretary of Homeland Security 

Tom Ridge 

Assistant Secretary Designee 

Michael Garcia 

Director of Operations 

Michael Dougherty 

Director, Office of Investigations 

John Clark 

Deputy Assistant Director, Financial Investigations 

Division 

Marcy Forman 

Editor 

Michael Kuhn 

The Secretary of Homeland Security has determined 

that the publication of this newsletter is necessary in 

the transaction of business required by law of U.S. 

Immigration and Customs Enforcement. 

ICE Web site: http://www.ice.gov 

Address correspondence and contributions to: 

Marcy Forman 

Deputy Assistant Director 

Financial Investigations Division 

1300 Pennsylvania Avenue NW, Room 6.3C 

Washington, DC 20229 

Fax: 202-927-6476 Voice: 202-927-0840 

Office of Public Affairs 

U.S. Immigration and Customs Enforcement 

U.S. Department of Homeland Security 

425 I Street NW 

Washington, DC 20229