To nab terrorists, DHS will plumb trade data

To detect money laundering by terrorists, drug smugglers and other criminals, the Homeland Security Department will buy new tools to analyze trade data.

Immigration and Customs Enforcement, an arm of the department's Border and Transportation Security Directorate, plans to acquire 14 copies of LeadMiner, an improved version of the Numerically Integrated Profiling System (NIPS) now used by ICE to track down financial crimes.

The ICE Financial Investigations Division's Money Laundering Coordination Center will award a sole-source contract for the software and support to DataMining International Inc. of Washington.

'DataMining International is a new company started by the original programmer who wrote NIPS,' ICE spokesman Marc Raimondi said. Mark Laxer, the original NIPS programmer, now is the chief technology officer for the company.

ICE's predecessor agency, the Customs Service, began using NIPS in the early 1990s to investigate financial crimes (Click for Jan. 7, 2002, GCN story).

Raimondi said ICE officials want to use LeadMiner for data mining because it has the same look and feel as NIPS.

LeadMiner uses custom algorithms and artificial intelligence methods to analyze both structured and unstructured data to tease out relationships in the information, according to an ICE announcement.

ICE analysts will use the software, which can crawl through multiterabyte Oracle Corp. and Structured Query Language databases, to detect patterns of financial activity by scanning files stowed in more than 25 databases, DHS officials said. The data-mining tool uses a trade discrepancy feature to automate comparisons of federal trade data with information from foreign governments' databases.

Trade discrepancy analysis relies on the detection of unusual patterns of exports or imports to detect criminal activity. For example, in recent months, Iraq has figured as one of the top five exporters of copper in the world, though it has no copper mines. That trade activity reflects widespread looting of copper from the Iraqi telephone and electricity systems, according to sources in the copper industry.

International terrorist organizations also have used underinvoicing and overinvoicing of traded goods to shift revenue internationally'a practice that can be used either between companies or across subsidiaries of companies that operate in several countries. Such transfer pricing scams, which can be used to shift profits to jurisdictions with low taxes, have been outlawed by Congress and investigated by the IRS for decades.

There are Visual Basic and Java versions of LeadMiner, and analysts can use either or both versions running under Microsoft Windows NT, Windows 2000 or Windows XP. The Java version is suitable for Internet applications; the Visual Basic version can be used for disconnected operations in secure facilities, according to the company.

'LeadMiner is the new generation of our data-mining software, which incorporates network and Web-based applications and new analytical algorithms,' said Marc Epstein, chief executive officer of DataMining International.

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