Nobody has been as good at tracking the painful truth of Iraqi-facilitated evasion of international sanctions on Iran as financial crime consultant Kenneth Rijock. Consider:
The Kurds in northern Iraq have “allowed both rampant money laundering, and widespread facilitation of global Iran sanctions evasion” though their banks. In central Iraq, U.S. dollars are flowing in bulk from Baghdad to Iran… more>>
Lebanese banks and Bank Melli, a sanctioned Iranian bank, are operating in northern Iraq. EU and North American businesses that use Lebanese banks may not be taking sufficient steps to prevent their transactions from benefiting Iranian end-users… more>>
“Iraq blatantly disregards UN sanctions on Iran” in accepting an Iranian-flagged vessel‘s shipment at its Um Qasr port, for example… more>>
Five Turkish banks in Iraq may be facilitating Iran’s sanction dodging behavior… more>>
Iran will reap $16 billion annually from a new natural gas deal with Iraq… more>>
Reading about the dangerous anti-money laundering (AML) and combating the financing of terrorism (CFT) policies of Iraq may be upsetting to those who have made personal sacrifices fighting for Iraqi freedom, but we have to face the current facts. How does Rijock describe the Iraq invasion? “Military success, yes; but AML/CFT utter failure.”
In January we learned about Wassim el Abd Fadel, a Lebanese financier of Hezbollah. A surprising amount of detail has been disseminated through the press about this case. Now even more has been released. Thanks to El Grillo for sending this over this update:
Drug lord in Paraguay linked to Hezbollah
It was mid-December last year when Interpol caught, in the transit area of Paris’ Charles de Gaulle airport, a 21-year-old Paraguayan woman who had swallowed over a kilogram of cocaine. Nelida Cardozo Taboada had disappeared from her hometown months before. She confessed to French police that she had been recruited as a “mule” by a network of drug smugglers. Her employer, a Paraguayan woman married to a Lebanese man, had convinced her to swallow the cocaine by promising her a job as a maid in Warsaw, Poland.
It took the police in Paraguay only a few days to reach the head of a Lebanese-led drug cartel in Ciudad del Este, a town located in the infamous tri-border area where the frontiers of Paraguay, Brazil, and Argentina meet. Wassim Abdel Fadel was arrested on December 21 together with his Paraguayan wife. But what police uncovered during the investigation led them further than they had expected.
According to information disclosed by Interpol and the Paraguayan police, Fadel, 30, was part of an international drug trafficking network controlled from Isla Margarita, Venezuela, a Caribbean holiday destination that is also an infamous hub for South American drug cartels. The leader of the cartel is Ghazi Atef Nassredine, also known as Abu Ali, a declared Hezbollah supporter who became a Venezuelan citizen 10 years ago and immediately thereafter became Venezuela’s diplomat to Beirut and Damascus. By arresting Fadel, Interpol and the Paraguayan police uncovered an international money-laundering and drug-smuggling network responsible for sending cocaine from South America to the United States, Europe, and the Middle East.
Fadel was the leader of a network that would send laundered money, from drugs made in the tri-border area, to bank accounts in Istanbul and Damascus. According to a Paraguay Police Department press release sent to NOW, Fadel’s network regularly sent sums between $50,000 and $200,000 to these accounts. After investigating the owners, Paraguayan police came up with a list of Lebanese nationals known to be high-ranking Hezbollah members. Though the list was not disclosed to the media, the police said that the people on it were involved with Hezbollah’s financial operations. The same bank accounts also allegedly received money from different continents.
Although young, Fadel had gained control of an entire Hezbollah-backed real estate and drug market in Ciudad del Este after the network’s leaders – Lebanese-Americans Nemr Ali Zoayter, Amr Zoher, and Moussa Ali Hamdan – were arrested in Paraguay and extradited to the US. Zoayter and Zoher were caught in Ciudad del Este in 2008, while Hamdan was arrested in June 2010 in the same town.
According to statements released by the Paraguayan police, Fadel had been on the run for over three years. He was not only part of the drug cartel, but also the owner of a car-parts company, Fadel Automotores, located in Ciudad del Este. In 2008, several of his customers reported him to the police because he had defrauded them.
Fadel was born in Toulin, a village in the Lebanese district of Marjayoun. It was obvious to the villagers that he had made a fortune in Paraguay, as he had built a huge mansion in his hometown. However, he is not the only local who made his fortune in South America or West Africa; indeed, villages in the South and Beqaa Valley are studded with villas built by expatriates. But how the emigrants made their millions is often a mystery…
Taliban funding remains intact despite international sanctions
Reports in 2012 revealed that the Taliban’s funding remains intact, that none of the Taliban’s assets have been blocked by U.S. sanctions, that the Taliban retains its taxing authority over Afghans, and that the UN sanctions only 18 percent of the Taliban’s provincial shadow governors in Afghanistan.
Islamic charities remain top terror financiers
It’s questionable to even call this “news,” but understanding the role of Muslim charities in funding jihad, of which we saw multiple examples throughout 2012, is the Rosetta stone to bankrupting terrorism. Instances of Muslim charities behaving badly cropped up, and in some cases have worsened, in both in the Middle East and in the West this year.In the Islamic world, the Saudi charitable foundation IIRO, whose branches in Indonesia and the Philippines were previously blacklisted by the U.S. for funding terrorism, is opening seven new branch offices. In Bangladesh, the chief of the terrorist organization Jamatul Mujahideen Bangladesh (JMB) revealed that Muslim Aid, WAMY, the Muslim World League, the Qatari Charitable Society, and the Revival of Islamic Heritage Society, are among the primary donors to his jihad. Read the rest of this entry ?
Latin America has experienced a possible increase in terror financing activities by radical Islamists throughout 2012. Consider the developments that have been revealed this year:
In September, published reports indicated that a Hezbollah camp in Nicaragua is training 30 operatives and is laundering money.
The Venezuela chapter of Hezbollah is using Panama for bulk cash smuggling for follow-on transfer to Beirut.
Some goods, possibly even missile components, are being exported via Panama directly to Iran.
The use of the Venezuelan air carrier Conviasa to smuggle contraband through Africa to Europe earned it an “operational ban” from the EU in April. Hezbollah profited from the Conviasa flights. It is unclear whether the ban interferes with Conviasa’s African flights.
Cuba was listed again by the U.S. in 2012 as a state sponsor of terrorism partly for the continued safe haven Cuba provides to terrorist groups FARC and ETA. Havana is now also letting IHH, the radical Islamist Turkish charity that has been banned by Germany for its financing of Hamas, build a mosque in Cuba.
A trio of Hezbollah agents in Mexico was exposed during an arrest of one operative who had previously been convicted in the U.S. for credit card fraud that funded terrorism.
Ecuador was blacklisted in June by FATF, the international financial watchdog, for failing to make progress against money laundering and terrorist financing.
In its annual report in July, the U.S. State Department said, “Brazil has not criminalized terrorist financing in a manner that is consistent with the FATF Special Recommendation II.”
Given its Western heritage and deep Catholic faith, Latin America can and should be a natural ally in the war against Islamic terror. Its energy resources make it a natural counterweight to the oil powerhouse of the Middle East.
But this wonderful opportunity to present a united trans-American front against jihad is being jeopardized by attitudes of permissiveness, ignorance, and political correctness. American politicians like Michelle Bachman and Connie Mack who recognize the threat are written off as know-nothing xenophobes. But the news this year indicates that they are correct.
Kenneth Rijock has another great piece on Panama—this one is about how Panamanian officials turn a blind eye to one of their banks being used by Hezbollah cocaine traffickers as a financial gateway to Lebanon.
Rijock pointedly asks “Is somebody asleep in Washington?” Yes sir, and it’s not even 3 a.m. The sun is up, but our leaders are snoring.
Hezbollah Venezuela continues to actively launder its narcotics trafficking proceeds through a major Panamanian financial institution, which facilitates the movement of millions of dollars of its cocaine profits. Sadly, the story is well known to many of the country’s government and financial leaders. Though a small unit, numbering less than 100 cadre, Hezbollah Venezuela* regularly and continuously smuggles bulk cash into Panamanian airports, and into the bank. Remember the $25m that was seized upon arrival a while back ? Didn’t you wonder whose money it was ?
Once it has arrived in Panama, the drug cash is deposited in a bank whose ownership is linked through family ties to a senior government leader. Hezbollah has a small, but extremely effective, contingent in Panama, who facilitate the onward movement. Ultimately, most of the illicit profits are transferred to Beirut, and provide financial support for Hezbollah, a Specially Designated Global Terrorist (SDGT) group.
Formed only a few years ago, and seemingly undercapitalised, it has quickly outgrown its original location, and plans to move into a multi-million dollar skyscraper for its new headquarters. It would appear that providing financial support to terrorist organisations pays well; ask the owners.
Why isn’t the Government of Panama closing down this bank ? It would mean a regulatory agency would be shutting down a relative’s business, and obviously, this does not happen in the Republic of Panama.
A final question: why, in the face of overwhelming proof, has the bank not been sanctioned by the Latin American team at OFAC ? Is somebody asleep in Washington ? The leader of Hezbollah Venezuela is OFAC-sanctioned.
__________________________________________________________________________
*Sometimes known as Hezbollah Latin America.
Hezbollah gets a lot of money from its international criminal network, but we shouldn’t forget when we hear information like this that the terrorist organization also receives a lot of money from khums, the traditional Shia Muslim tax—it just doesn’t get as much attention from law enforcement or coverage by the news media.
A ruling by the New York Court of Appeals may change the way terror financiers take advantage of correspondent bank relationships in the U.S. Kudos to Shurat HaDin for pushing this case forward (and for linking to the news too).
This ruling will probably cause a stir among bank compliance circles because it could be difficult and expensive to conduct sufficient screening of correspondent banks. But the alternative, which is to passively condone terrorist transactions in your bank that originated from a foreign bank, isn’t such a great alternative.
Given the size and centrality of the financial sector in New York, this state-level ruling will have international consequences.
Lebanon War victims alter game of terror financing
Terror groups may no longer be able to do transactions in US dollars after a groundbreaking ruling by the highest state court in New York, the New York Court of Appeals, announced Shurat Hadin, the Israel Law Center, on Wednesday.
The ruling was issued on Tuesday in favor of victims of Hezbollah rocket attacks from the 2006 Lebanon War and could be a “game changer” in the global financial war on terror financing.
Until now, terror financing could avoid scrutiny in the US by making fund transfers through American correspondent banks.
A correspondent bank essentially serves as a middle bank for fund transfer for banks that do not have local US branches.
As long as the terrorist-affiliated banks had no local branch in the US they were insulated from any legal consequences, and the correspondent bank could plead ignorance regarding the transactions.
However, using a new interpretation of an existing law, the appeals court ruled that correspondent banks will now be held liable for civil damages if it is found that they facilitated transactions that ultimately can be traced back to terror entities.
This places the onus on correspondent banks to do more careful policing of where fund transfers are eventually going even behind sometimes what could be many layers of straw companies to hide that terrorists are receiving the money.
Most importantly, many correspondent banks simply may cease involvement in any transactions where they have doubts about a possible terror connection to avoid even the possibility of heavy civil liability and bad press.
The stench of laundered money has wafted from Lebanon throughout the international financial system for years. Usually that’s because of Lebanese banks being used to fund Hezbollah.
But the latest announcement by the U.S. Treasury Department indicates that Lebanon is being used as a funding base for Hamas as well.
Treasury has designated two Islamic charities in Lebanon, Al-Waqfiya and Al-Quds, as being “controlled” by Hamas. Treasury’s press release explains that the charities exist, “to support the families of Hamas fighters and prisoners and to raise money for programs and projects in the Palestinian territories intended to spread Hamas’s influence and control.”
It’s important to note that the sanctions won’t have much of a practical effect unless Al-Waqfiya or Al-Quds normally keeps money in a U.S. bank, does business with American companies, or receives zakat donations from American Muslims.
Treasury’s announcement also revealed that Al-Waqfiya and Al-Quds charities are members of Yusuf Qaradawi’s Hamas-funding network, the Union of Good (UoG). Treasury should go farther than these two designations by publishing an exact list of all charities that fall under the UoG umbrella.
While Israel has published a members list before, the U.S. only maintains a blanket designation against UoG, and has only specified a few of the charities that belong to it.
Jacob Campbell, a research fellow at the Institute for Middle Eastern Democracy, has uncovered a European Commission plan to subsidize Lebanese schools despite the announcement by Lebanon’s eduction minister and Hezbollah official that students will be taught “a culture of Resistance.” Specifically, the European Union has pledged €3.8 million for a Lebanese citizen education program and is contributing €13.7 million toward Lebanon’s “Education Sector Development Plan.”
… If Hezbollah is to consolidate its rule over Lebanon, it must command the loyalty of the country’s youth. And, having inherited the previous government’s five-year Education Sector Development Plan (ESDP), Hezbollah is in the ideal position to achieve this by embedding its own ideology into Lebanon’s education system.
Keen to support the strengthening of “students’ national identity and civic responsibilities” in a nation as perennially blighted by sectarian strife as Lebanon is the European Union, which has committed €3.8 million for the development of a citizenship education programme in Lebanese schools. Well-intentioned as this is, it overlooks the fact that Hezbollah’s conception of civic responsibility is fundamentally at odds with the European Union’s. This was most starkly evident in February, when the Lebanese Minister of Education issued a memorandum obligating all public schools to spend an hour imbuing “the culture of Resistance” in children.
Nor has Hezbollah’s attempt to indoctrinate an entire generation stopped there. As part of the ESDP, which the European Union is co-financing with a total budget of €13.7 million, the Lebanese government is seeking to launch a standardised history curriculum. According to the most recent proposal, history lessons will include teaching pupils to appreciate “the Resistance’s importance in terms of defending Lebanon”. The draft syllabus has also been criticised for writing the pro-democracy Cedar Revolution out of Lebanon’s history, as well as omitting Lebanon’s struggle against the Syrian army and Palestinian militias during the civil war. To all impartial observers, it is clear that Hezbollah is exploiting the ESDP to greatly exaggerate its centrality to Lebanese national identity.
When Paul Nuttall MEP submitted a parliamentary question asking whether the European Commission would cancel its financial assistance to the Lebanese Ministry of Education in light of Hezbollah’s efforts to brainwash students, Commissioner Štefan Füle responded by saying that any cessation of funding “would be counterproductive”. Given that the Lebanese Minister of Education announced in May that he has enlisted the help of his Iranian counterpart in implementing the ESDP, the European Commission ought to consider that what is truly counterproductive is sponsoring a project that appears to have been outsourced to Hezbollah’s paymasters in Tehran…
Mr. Campbell also tells Money Jihad that, “As a Eurosceptic, I resent the squandering of taxpayers’ money by an unelected and unaccountable European Commission,” especially if it empowers Hezbollah—an organization committed to terrorism against Israel.
If you live in Europe or America (and especially if you’re a young adult), you too must be wary of a future of being saddled with public debt incurred by profligate politicians elected decades before you could even vote. The money involved in this Lebanese case may not seem like much in the grand scheme of government waste and abuse. But how long can your government sustain itself when it engages in, not just expensive welfare programs at home, but continuous foreign aid welfare to an Islamic world that is innately hostile and unappreciative of Europe and the U.S.?
Incidentally, U.S. aid to Lebanon was $73.1 million in 2008, $125.7 in 2009, an estimated $229 million in 2010, and a requested $246.3 million in 2011 according to a Congressional Research Service report.
You’ll hear a lot more in the coming months about how U.S. law enforcement exposed Hezbollah’s international narco-trafficking money laundering scheme. But lost in the back slapping, attaboys, and high fives among prosecutors and politicians is just how much the scheme enriched the banking system of Lebanon and its Iranian partners.
New American Security senior fellow and money laundering expert David Asher discusses the details during an interesting presentation at the Washington Institute last month. We’ll start the tape as Mr. Asher explains how used cars sold from the Americas made their way to West Africa where the profits were mingled with illegal drug proceeds:
A French bank that agreed to buy LCB’s assets mandated an audit that has revealed a far deeper network of Hezbollah financiers than what U.S. federal employees had suspected. Note that it took a private sector audit to identify 200 suspect accounts rather than government-collected financial intelligence.
Unfortunately, although the French bank rightfully refused to acquire the suspect accounts, U.S. Treasury officials have meekly acknowledged that other Lebanese banks have taken over those accounts.
The Americans had identified only a handful of drug-tainted accounts at the Lebanese Canadian Bank. The search for further trouble began over the summer, after the Société Générale de Banque au Liban, or S.G.B.L., agreed to buy the bank’s assets.
As part of its own agreement with Treasury officials, Lebanon’s Central Bank set up a process to scrub the books. But compliance officers at S.G.B.L.’s French partner, Société Générale, were skeptical of the Central Bank’s choice of investigators. One of them, the local affiliate of the international auditing firm Deloitte, had presumably missed the drug-related accounts the first time around, when it served as the Lebanese Canadian Bank’s outside auditor.
And, according to people knowledgeable about Lebanese banking, the central bank’s on-the-ground representative had been recommended to that post by Hezbollah.
As an extra step, to reassure wary international banks, the chairman of S.G.B.L., Antoun Sehnaoui, commissioned a parallel audit, with the help of Société Générale’s chief money-laundering compliance officer. And to make sure that his bank did not run afoul of Treasury officials by inadvertently taking on dirty assets, he also hired a consultant intimately familiar with the Patriot Act provision used to take the bank down: John Ashcroft, the former attorney general whose Justice Department wrote the law.
Identifying suspicious accounts is not a subjective business. Banks rely on internationally recognized standards and software that contains certain triggers.
As part of a radio special on Hezbollah last month, BBC reporter Owen Bennett-Jones did a man-on-the-street bit in Beirut. Introducing the segment, the reporter casually mentions that a local shop sells Hezbollah key chains, coffee mugs, and Hasan Nasrallah CDs, and that the traffic cops on the street are all on Hezbollah’s payroll.
Here’s a telling two-minute clip:
The reporter asked pedestrians which political party they support. Everybody he spoke with answered Hezbollah. Answers included:
“Yes, Hezbollah, the resistance, the one who lets you sleep at night.”
“Party of the resistance of course, Hezbollah… cuz they were the ones who lifted our heads up in the sky, they were the ones who protected us and made us proud.”
“I do support them, but I don’t like to make it public, I don’t like to make politics out of it.”
1994: This day in terror finance history, 100 Madrid businessmen receive letters from ETA demanding money... ow.ly/kIpmX4 hours ago
RT @ISCOSEU: Omer Abdi Mohamed gets 12 years in prison: Terror recruiter and financier sentenced in Minneapolis
Al-Shabaab ... http://t.co/…5 hours ago
“Go forth, light-armed and heavy-armed, and strive with your wealth and your lives in the way of Allah!”—Koran (Sura 9, Verse 41)
“The warrior gets his reward, and the one who equips him gets his own reward and that of the warrior”—Muhammad (Sunan Abu Dawud, Book 14 No. 2520)
“Your duty is to support the Mujahideen with money and men... The Zakat of one affluent Muslim merchant is enough to finance all the Jihadi front against our enemies”—Osama Bin Laden
More details emerge on Paraguay’s Hezbollah drug lord
March 5, 2013In January we learned about Wassim el Abd Fadel, a Lebanese financier of Hezbollah. A surprising amount of detail has been disseminated through the press about this case. Now even more has been released. Thanks to El Grillo for sending this over this update:
Posted in News commentary | Tagged Hezbollah, Lebanon, Margarita Island, narco-trafficking, Paraguay, terrorist financing, Venezuela | 1 Comment »