Bankrupting Terrorism: Heinz Alum Hits Extremists Where It Hurts
Jan 26, 2017
By Michael Cunningham
Heinz alumnus builds groundbreaking tool to counteract the financing of terrorism
Terrorist activities, like many things in life, cost a lot of money. And much of that money is laundered.
Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source. Money launderers often achieve this by utilizing transfers involving foreign banks or legitimate businesses.
The U.S. Department of State has prevented more than 300 terrorist attacks by tracing and recovering illegal money meant to fund terrorist activities. But even with that rate of success, the World Bank estimates that approximately $3.61 trillion is laundered annually across the globe, making laundering a colossal challenge for counterterrorism experts.
One of the keys to fighting terrorist attacks is further preventing the illegal laundering of money, usually disguised as legitimate business transactions, to fund terrorist activities.
That’s exactly what Ian Kloo (MSPPM-Data Analytics '14) has done. Through his work as a Presidential Management Fellow, Kloo developed an innovative app for the Center for Army Analysis that helped analysts at United States Central Command (USCENTCOM) find links between known and unknown money launderers that support terrorism.
Kloo’s app has had a monumental impact at USCENTCOM, enabling government officials to seize and interdict what Kloo described as a “significant” amount of money from known terrorist organizations. For his efforts in developing the app, Kloo was awarded the 2016 David Rist Prize by the Military Operations Research Society (MORS). The Rist Prize recognizes the practical benefit sound operations research can have on “real life” decision-making.
“USCENTCOM had a lot of data that had been subpoenaed through various legal actions,” said Kloo. “We came up with a methodology to go through and create some visualizations based of all of that data.”
The key to developing this groundbreaking technology, which was unprecedented in financial counterterrorism, was something called “entity resolution” – the practice of determining whether two similar names in the same financial transaction data set are actually the same person.
“We were trying to answer the really hard question of, ‘which two people in this data set are actually the same person, but using different names or different monikers,’ so getting after that is where I think we had the greatest impact,” explained Kloo. “We created an interface for analysts to use, where they could go through and create some relatively complicated rule sets to do some fuzzy matching of these names.”
For example, using Kloo’s app, an analyst could determine that they wanted to create a data set where everyone who has the same date of birth, and similar names based on some key metrics, is considered to be the same person.
“In a typical data set, it would be several hundred million pair-wise comparisons to do that by hand, which is impossible,” explained Kloo. “But the analysts had the intuition to do it. So we were able to leverage the analysts’ insight and the power of computers to fit where appropriate instead of trying to shoehorn one into the wrong place.”
In addition to the Rist Prize, Kloo’s work to counteract terrorist financing also landed him a job. With his two-year Presidential Management Fellowship set to expire next month, Kloo was hired on by the Center for Army Analysis full-time to continue leading data science projects that make a positive impact on society.
Currently, Kloo is developing an app to optimize space in the Arlington National Cemetery, and he is creating tools to help Army analysts predict which digital news stories will attract the most public attention.
“Being able to use data science to have a positive impact on society is very fulfilling, and it’s one of the main reasons that I wanted to get involved in government work in the first place,” said Kloo.
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