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U.S. car dealerships part of ‘mind-boggling’ international criminal enterprise, U.S. charges

By Michael Isikoff National investigative correspondent / NBC News

 The Treasury Department on Thursday blacklisted one of the largest banks in Lebanon, accusing it of being part of what one official calls a “mind-boggling” international criminal enterprise that is laundering hundreds of  millions of dollar in illegal drug money every year for the benefit of Hezbollah.

The action, which was announced Thursday by Undersecretary of Treasury Stuart Levey, is the latest development in a four-year investigation that officials say has uncovered links between one of Colombia’s biggest drug traffickers, top leaders of Hezbollah and the Iranian Government.

As part of the alleged scheme, proceeds from the drug empire of Colombian trafficker Ayman Saied Joumaa, generated from massive shipments of cocaine to West Africa and then on to Europe, are being laundered through the Lebanese Canadian Bank, or LCB — a Beirut-based financial institution with $5 billion in assets and 35 branches, including an office in Montreal. Some of the money was then rerouted through about 50 used car dealerships in the United States, according to U.S. officials.

The profits ultimately benefit Hezbollah, a Lebanon-based Shiite Muslim group considered a terrorist organization by the U.S. government, which is suspected of using some of the revenue to rebuild its military arsenal and other infrastructure damaged in its 2006 war with Israel, the officials said.

As a result of Thursday’s action, LCB has been designated as a financial institution of “primary money laundering concern.” Under a provision of the U.S. Patriot Act, Treasury is proposing to ban it from engaging in any transactions with U.S. financial institutions. That rule would take effect after 60 days unless LCB takes corrective action, officials said.

Bechara Moussa, a representative at LCB’s Montreal office, told NBC: “The general management in Lebanon is aware of these rumors and by tomorrow they will issue a statement.”




“The Lebanese Canadian Bank for years has participated in a sophisticated money laundering scheme involving used cars purchased in the United States and consumer goods overseas,” said DEA Administrator Michele M. Leonhart. “Thanks to DEA-led operations, as well as today’s Treasury action, we are exposing and disrupting this money laundering network and its connections to global drug trafficking and Hezbollah.”

In addition to the services it provides for Joumaa, officials had an additional incentive to move against LCB.  According to Levey, Hezbollah’s Tehran-based envoy, identified as Abdallah Safieddine, has facilitated access to LCB and key LCB managers for Iranian government officials. U.S. officials also said that an LCB subsidiary in Gambia was partially owned by a Lebanese national who is “known to be a supporter of Hezbollah.”

A United Nations criminal investigator tells NBC that Safieddine is considered one of the Hezbollah’s top moneymen and a cousin and close associate of Hezbollah leader Hassan Nasrallah. Safieddine’s brother, Sayyed Hashem Safieddine, is the chief of Hezbollah’s executive director and has been considered a likely successor to Nasrallah.

Officials said  that they could not say with certainty how much of the drug proceeds were ultimately being funneled to Hezbollah. But they said a key figure in the scheme was Jourmaa, who was recently named  by Treasury, along with several family members and associates, as a “specially designated narcotics trafficker.” Officials told NBC that Joumaa’s Colombian based organization, ships ‘multi-ton bulk shipments”  of cocaine through Venezuela to Europe, using thinly policed parts of  West Africa as a transit point.  The cash proceeds are then flown by couriers to Beirut, where the funds are deposited in exchange houses that have accounts at LCB. Hezbollah “has benefited from the drug trafficking activities of Jourmaa” and his associates, said Levey.

Officials did not identify which car dealerships receive proceeds from the transactions, saying only that they are scattered in communities throughout the country, including Michigan, Florida and North Carolina, where there are significant concentrations of Lebanese immigrants. Members in the ring that work at the car dealerships buy cars and then ship them back to West Africa, selling them at significant mark-ups, officials said. Some of these car dealerships are currently under investigation by DEA, but officials said it may be difficult to prove they are knowing participants in a drug and money laundering scheme.


How America’s used cars helped fund Middle East terrorism

Lebanese terrorist organization and sometimes political party Hezbollah used the purchase of used cars in America to traffic money between West Africa, the United States, Canada and Lebanon, according to a suit filed by the U.S. Department of Justice. As much as $480 million was transferred in the scheme, going back to 2007. Here’s how it worked.

Hezbollah has perpetrated attacks and bombings against Israel since as far back as 1982. In 1997 they were labeled a terrorist organization by the United States government (and other Western governments), which means there are limits placed on how they can access funds.

Preet Bharara, the U.S. District Attorney for the Southern District of New York, says Hezbollah used a complex scheme involving, drugs, cars, and wire transfers to get around those limits.

Starting in January 2007, money was transferred from various financial organizations, including the Lebanese Canadian Bank, to the United states for the purchase of used cars. The approximately 30 individual buyers of these cars had "little or no property or assets" according to the complaint. Once purchased, the cars were then allegedly shipped to Africa (primarily the small Western African nation of Benin) and then re-sold.

The proceeds from those sales, according to the complaint, were then smuggled by a series of Hezbollah money couriers controlled by a Togo-based operative called Oussama Salhab. His network transferred the cash through Ghana and Togo to Lebanon, where it was then used by Hezbollah to fund itself.

"The intricate scheme laid out in today’s complaint reveals the deviously creative ways that terrorist organizations are funding themselves and moving their money, and it puts into stark relief the nexus between narcotics trafficking and terrorism," said U.S. Attorney Bharara. "Today, we are putting a stranglehold on a major source of that funding by disrupting a vast and far-flung network that spanned three continents."

Drug trafficking organizations have also been using similar car sale schemes to move money. From the DEA/Justice Department press release:

This same used car, Hizballah-controlled money laundering infrastructure is used to conceal and funnel hundreds of millions of dollars in narcotics proceeds from West Africa back to Lebanon. For example, Joumaa’s drug trafficking organization, which operates in Lebanon, West Africa, Panama and Colombia, launders as much as $200 million in proceeds per month, through various channels, including bulk cash smuggling operations and Lebanese exchange houses. Joumaa’s organization uses Hizballah couriers to transport and launder narcotics proceeds, and pays fees to Hizballah operatives to facilitate the laundering of narcotics proceeds.

Another drug trafficking organization, which is led by Maroun Saade, is also involved in the transportation and distribution of large quantities of narcotics in West Africa. Saade is a member of the Free Patriotic Movement, a Lebanese Christian organization closely allied with Hizballah, and has provided extensive services to Hizballah members engaged in narcotics trafficking and bulk cash smuggling in West Africa. On February 14, 2011, Saade was charged in the Southern District of New York with participating in an international drug conspiracy in West Africa and conspiring to aid the Taliban. Saade is a close associate of Salhab, who relied on Saade to pay bribes to release money couriers arrested for smuggling cash through West Africa.

Much of the actual transportation of these vehicles was done by Michigan-based transportation company Cybamar Swiss, which is owned by Salhab and his residents. We’ve reached out to the company for a comment on these complaints but they’ve yet to respond.

The complaint is seeking a civil penalty of the amount they’ve determined has been laundered, which has been estimated at $483,142,568.

That’s a lot of used cars.

Photo Credit: Getty Images