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U.N. report: Al-Shabaab is raising millions illegally in Somalia

Al-Shabaab reportedly generates between $70 million and $100 million per year

Funds are being used to pay for fighters, weapons and ammunition

The U.S. believes the group may be plotting attacks in the region and abroad

Washington (CNN) -- The once ragtag Somalia-based al Qaeda affiliate group known as Al-Shabaab has grown into an economic powerhouse, raising tens of millions of dollars in cash every year from a variety of schemes involving extortion, illegal taxation and other "fees," according to a United Nations report. 

The United States believes the group is closely coordinating with al Qaeda groups in Yemen and may be plotting attacks in the region and abroad. 

The terrorist group now "generates between $70 million and $100 million per year, from duties and fees levied at airports and seaports, taxes on goods and services, taxes in kind on domestic produce, 'jihad contributions,' checkpoints and various forms of extortion justified in terms of religious obligation," according to the July 18 report from the U.N. Monitoring Group on Somalia and Eritrea. 

The group has a long history of hindering humanitarian aid deliveries to millions suffering from drought and famine.  In recent months, the U.S. military and the CIA have stepped up covert operations inside Somalia in an effort to counter the growing Al-Shabaab capabilities. 

One U.S. official says there are now estimates that Al-Shabaab controls up to 1,000 fighters in the country.  He declined to be identified due to the sensitivity of the information. 

"I would say that the greatest risks right now in East Africa are Al-Shabaab and the violent extremists that they represent," says General Carter Ham, commander of the U.S. Africa Command. 

Speaking to his own troops recently, Ham said: "Even if you don't think the humanitarian need is compelling enough ... to me there is a security angle to this which affords us an opportunity as a nation, as a collective group of nations, to really take an effort to undermine what Al-Shabaab is trying to do in Somalia." 

The Al-Shabaab organization "presents an increasingly acute regional and international threat," according to the U.N. report.  The monitoring group says despite infighting and some military defeats, "the economic health of Al-Shabaab is more robust than ever." 

Funds are being used to pay for fighters, weapons and ammunition and continued fighting against the fragile Somalia security forces and African Union troops in the country. 

"Al-Shabaab is evolving from an armed faction into a lucrative consortium of business interests, both within Somalia and abroad, whose members benefit from cartel-style trading practices, tax breaks and mutual facilitation.  Moreover, there are indications that Al-Shabaab trading networks may also be used to camouflage charitable contributions from sympathizers in the Gulf States," the report reads. 

Al-Shabaab's economic growth has emerged largely since October 2009 when it won control of the southern port town of Kismaayo and other nearby ports.  The group now generates an estimated $35 million to $50 million a year from port revenues.  Another $30 million to $60 million a year comes from "taxes" on businessmen operating in marketplaces in the capitol of Mogadishu and other towns. 

"In addition to those taxes on businesses, Al-Shabaab operates a comprehensive web of mobile military checkpoints where transportation operators and passengers are all obliged to pay taxes for free passage," the report reads. 

The U.N. report offers extensive details on Al-Shabaab's arms smuggling operations, as well as what the U.N. says are credible reports of potentially illegal arms shipments coming in by air and sea into southern Somalia and then being shipped to fighters throughout the country. 

"During the Ramadan offensive in August and September 2010, for instance, several lorry loads of arms and ammunition arrived in Mogadishu just days after a consignment of weapons reportedly landed at Kismaayo airport," it reads. 

The report also identifies key Al-Shabaab fighters including the one insurgent leader who is "believed to command an estimated force of between 200 and 500 fighters," most of whom are from Kenya.