Islamic militants are suspected of using Second Life, the internet virtual world, to hunt for recruits and mimic real-life terrorism.

Police and the intelligence services are concerned that it may have been infiltrated by extremists to proselytise, communicate and transfer money to one another. Radicals may also be responsible for “virtual” terrorist attacks in which buildings depicted on the website are blown up.

Kevin Zuccato, head of the Australian government’s High Tech Crime Centre, said jihadists may also be using the virtual reality world to master skills such as reconnaissance and surveillance. “We need to start thinking about living, working and protecting two worlds and two realities,” he told a security industry conference in Sydney.

The concerns are shared by Europol, the pan-European police agency, which believes that Second Life provides a means to transfer money across borders in a way that is more difficult for the authorities to monitor. It has recruited security consultants to advise on the use of Second Life for fraud and terrorism.

Of particular concern is the anonymity of Second Life members who can use false names for their digital personas, known as avatars, to disguise their real identity and provide false contact details in the real world.

Intelligence sources said that although communications traffic through Second Life could in theory be monitored, often the only means of tracking an individual is by tracing the user’s IP address - the physical location of a computer in the real world - but even this can be faked. Monitoring complex money movements in the virtual world presents law enforcement agencies with further surveillance challenges.

Second Life, which has a global membership of more than 8.5m, uses three-dimensional graphics technology to create a virtual world. Anyone can become a member or “resident” for free and roam the virtual world after creating an avatar. They then meet and interact with other users’ avatars, visiting shops, theatres and sports events, trading goods and services and having sex.

So popular has Second Life become that companies such as Sony, BMW and Reebok have bought “land” and opened premises there. Some governments, including that of Sweden, have opened virtual embassies in Second Life.

Recently, inhabitants of the virtual world have experienced a more sinister phenomenon - virtual terrorist attacks against buildings and avatars. A recent attack took place at the Australian Broadcasting Corporation’s Second Life base. A number of these attacks, known as “griefings”, have been launched by what industry insiders say are “geeky teenagers” giving themselves names such as the Second Life Liberation Army.

Some experts, however, believe the “virtual atrocities” may have been committed by real Islamic radicals. Rohan Gunaratna, a terrorism expert at the International Centre for Political Violence and Terrorism Research in Singapore, said that for the past three months he had monitored about 12 jihadists who have assumed identities in Second Life. He said they were mostly based in America and Europe.

Some radicals, he said, had given themselves “innocuous” titles, while others had provocative jihadist names such as Irhabi007 (Arabic for Terrorist007). Gunaratna acknowledged that not all Islamists had any intention of carrying out terrorist attacks in real life, but said that they were using Second Life to build a community of extremists.

“Even in the training camps of Afghanistan, less than 1% returned and committed terrorist acts,” said Gunaratna.

Second Life has its own currency, the Linden dollar, named after the company behind the virtual reality world. About 250 Linden dollars are equivalent to one US dollar and residents can buy the currency from the company to trade in Second Life.

Linden Lab said that about $1m (£490,000) a day was exchanged in Second Life.

Linden, which has a team monitoring financial transactions in Second Life, said it was not aware of any money being exchanged by jihadists, but could not rule out the possibility.

Europol and the British Serious Organised Crime Agency (Soca) are concerned that Second Life provides an ideal facility for criminals to launder money through in-world enterprises such as casinos. There are fears that terrorists could also take advantage of difficulties in policing Linden dollar movements to transfer funds between operatives around the world.

A Soca source said the agency was looking at ways to address illicit financial activity in the virtual world.

The source added that policing the movement of money in Second Life presents challenges, as funds may be transferred across borders.

Mark Johnson, chairman of Risk Management Group, a British agency that advises Europol on fraud and terrorism in Second Life, said: “The critical issue with terrorist funding cases is trying to detect money movements prior to the commission of the crime. So if you can move money around in secret in an environment where there is little surveillance, it is a very sensitive point.”

John Zdanowski, chief financial officer at Linden, said the company strictly monitored the exchange of money in Second Life. So far, he added, there had not been any suspicious transaction where the company had called in the police or the FBI.

Linden also said that it was unaware of any extremists using Second Life.

Terror Spotters

CCTV cameras capable of spotting criminals and known terrorist suspects through facial recognition technology are set to be deployed at Euston railway station in London, writes Dipesh Gadher.

The cameras are likely to monitor passengers coming through ticket barriers in order to get a “fix” on their faces. The captured images will be cross-referenced against photographs of criminals.

Sources claim this will initially involve identifying minor offenders, such as pickpockets. Once installed, the technology could also be used with a security service database of terrorist suspects.

Euston already has a network of digital CCTV cameras that should be able to run facial recognition software.

The technology - based on two-dimensional images, or possibly 3-D ones for greater accuracy - is being developed by biometrics experts at the National Policing Improvement Agency.

The trial, which could take place later this year, is part of a wider clampdown on security at key transport hubs.

The July 7 suicide bombers were captured on CCTV as they travelled to London on the Thameslink rail service from Luton. At least two of the attackers had previously been monitored and photographed by the authorities.

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