Two Lebanese currency traders deny U.S. charges of criminal links

Two firms designated by the U.S. Treasury for their alleged roles in an international drug trafficking and money laundering ring denied Thursday involvement in illegal activities.

The U.S. government took the decision Wednesday to label Ayman Joumaa, as well as nine people and 19 companies connected with him as Specially Designated Narcotics Traffickers in a racket which reportedly netted as much as $200 million a month.

Two Lebanese currency traders, Hassan Ayash Exchange and Elissa Exchange, which were both named in the Treasury’s designation, denied knowledge of Joumaa’s activities.

“We are terribly shocked by this news. I don’t know how our company’s name got involved in this work and the reports,” Iman Kharoubi, of Elissa Exchange, told The Daily Star.

“We work in Lebanon [and The Democratic Republic of] Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don’t have anything to do with him.”

Hassan Ayash, the owner of the exchange firm, denied any wrongdoing, but did admit to knowing Joumaa, who the U.S. designated under the Kingpin Act and will now struggle to access international financial transactions.

“For us it was a surprise today to hear about this story,” Ayash told The Daily Star. “We have no knowledge of where Ayman Joumaa is currently and we have no contact with him. But we know him in person.”

Beirut’s Caesar’s Park Hotel was also designated by the Treasury after it was alleged Joumaa, the manager and CEO, “uses [the hotel] as a location to broker drug trafficking and money laundering activities.” The hotel declined to comment on the accusation.

Both exchange companies have contacted Lebanon’s Central Bank for advice following financial sanctions, but Ayash was not unduly worried about the potential negative effect U.S. punitive measures could have on business.

“Actually there would be no consequences whatsoever on our work, since our work is transparent and we work with several banks in the U.S.,” he said.

Kharoubi was less optimistic. “Our transactions are clear and transparent, but our work would be terribly affected,” he said. “Our transactions go through several U.S. banks and car companies all over the United States. Under U.S. government supervision, our products and cargos are monitored within the United States.”

Washington has said it would reconsider its financial support for Lebanese institutions if a cabinet blessed by Hezbollah is formed by Prime Minister-designate Najib Mikati.

Both firms said the financial measures taken against them were unlikely to be linked to cabinet uncertainty.

“We are not affiliated with any party in the country. I do not think that this is related to regional politics,” Kharoubi said.

“It is too early yet, since the news just came in, to actually know if there are any political and economic indications in the American reports,” Ayash added. “We cannot say whether this action is related to the recent developments in Lebanon.”

The United States has already blacklisted several Lebanese companies for their suspected links to Hezbollah. – Additional reporting by Van Megeurditchian

Source: The Daily Star

U.S. targets Lebanon-based drug smuggling network

The U.S. Treasury Department said on Wednesday it was targeting a Lebanon-based drug trafficking and money laundering network suspected of doing as much as $200 million a month in business.

The Treasury's Office of Foreign Assets Control said it was labeling Ayman Joumaa, as well as nine people and 19 entities connected with his organization, as Specially Designated Narcotics Traffickers.

The action means U.S. citizens are prohibited from any commercial or financial dealings with the people or entities and that any of their assets found in the United States can be seized.

The Treasury said Joumaa coordinated the transportation, distribution and sale of shipments of cocaine from South America, laundering the money in Europe and the Middle East.

It said the group operated in Lebanon, West Africa, Panama and Colombia and had laundered as much as $200 million per month through various channels.

The Treasury's action was taken under the so-called Kingpin Act that aims to disrupt foreign narcotics traffickers by preventing them from gaining access to the international financial system. (Reporting by Glenn Somerville; Editing by John O'Callaghan)

Source: Reuters

U.S. Rules Bar Banks That Violate Iran Sanctions

The Treasury Department released new regulations on Friday that could bar foreign banks or companies from accessing the financial system in the United States if they did business with entities or people subject to United Nations and United States sanctions.

The regulations, which grew out of legislation Congress passed in June, effectively bar foreign banks from doing business in dollars if they engage in transactions with anyone suspected of involvement in Iran’s nuclear or missile programs. The entities include Iran’s Revolutionary Guards.

The regulations were released just months after the passage of new sanctions on Iran by the United Nations Security Council and the European Union. The European Union sanctions include additional measures aimed at Iranian banks and insurance companies and the Iranian transport sector. Administration officials have said they believe that the sanctions have already started to have an effect.

The Treasury regulations prohibit or impose strict conditions on the use of American bank accounts by any institution that engages in activities associated with Iran’s nuclear and missile programs.

Those activities include aiding the Iranian government’s efforts to obtain weapons of mass destruction or to support terrorism, aiding the activities of people already subject to United Nations sanctions and providing any financial assistance to Iran’s Revolutionary Guards or their affiliates. A final provision is aimed at banks or companies that engage in money laundering or assist any Iranian financial institution — including the Central Bank of Iran — in the activities cited.

Earlier sanctions focused on some of those activities, but violators were subject mostly to fines. The threat of being cut off from the United States economy adds a significant dimension, said Stuart A. Levey, the under secretary of the Treasury for terrorism and financial intelligence, in a briefing for reporters on the regulations.

Mr. Levey planned to leave Friday on a trip to the United Arab Emirates, Lebanon and other Middle Eastern countries to explain the regulations to officials of government and financial institutions.

“It would not be in our interest to act without warning,” he said. “We’re more interested in changing behavior than in ‘getting’ somebody.”

by: By ROBERT F. WORTH

Source: The NY Times

Lebanese bank denies U.S. charge of money laundering

A Lebanese bank has denied accusations by the U.S. Treasury Department that it is involved in laundering hundreds of millions of dollars on behalf of a drug kingpin -- and rejected claims it has links with Hezbollah, the Lebanon-based militia.

On Thursday the Treasury described the Lebanese Canadian Bank in Beirut as a "financial institution of primary money laundering concern." The Treasury said it had reason to believe that managers at the bank were complicit in money laundering by Ayman Joumaa, an alleged trafficker accused by U.S. authorities of shipping drugs from South America to Europe and the Middle East through west Africa.

The Treasury also said its action in designating the Lebanese Canadian Bank (LCB) exposed links between the bank and Hezbollah -- which is listed as a terrorist organization by the United States. Designation means that U.S. persons are prohibited from conducting financial or commercial transactions with individuals listed, whose assets under U.S. jurisdiction are frozen.

U.S. Under Secretary for Terrorism and Financial Intelligence Stuart Levey said: "Any financial institution that collaborates in illicit conduct on this scale risks losing its access to the United States."

The bank's chairman, Georges Zard Abou Jaoude, told CNN Friday that the bank had no relationship whatsoever with Hezbollah nor to the best of its knowledge with anyone designated by the U.S. Treasury Department. Jaoude said the bank had identified an account in Joumaa's name but it had not been used in four years. It had notified Lebanese regulators about the account, and the bank's books had been regularly inspected by the Special Investigation Commission, a Lebanese task force set up to counter money laundering.

The Treasury said Joumaa's network "launders hundreds of millions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering involving consumer goods throughout the world." In its statement issued Thursday, the Treasury estimated that as much as $200 million was being laundered on a monthly basis. "At least one of the individuals involved in this global drug trafficking and money laundering network has worked directly with LCB managers to conduct his transactions," the Treasury said.

The U.S. Drug Enforcement Administration, which was also involved in the investigation, said: "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."

The Treasury said the bank's links to Hezbollah included a subsidiary in Gambia called Prime Bank, formed in 2009, which it said was "partially owned by a Lebanese individual known to be a supporter of Hezbollah. "

Jaoude told CNN the bank rigorously adhered to all blacklists published by financial authorities around the world. He said the bank had not been contacted in advance by the U.S. Treasury's Office of Foreign Assets Control before Thursday's announcement and he was urgently trying to contact U.S. authorities. "All our books are open to the American Treasury," Jaoude said. "We have to clear our name," he said.

In its most recent annual report, the bank said "it is fighting money laundering by complying with international and [Lebanese] Central Bank circulars."

The Lebanese Canadian bank has 35 branches in Lebanon, as well as its subsidiary in Gambia and an office in Canada. The bank has grown quickly in recent years, from assets of $2.83 billion in 2005 to $5.18 billion in 2009.

Ayman Joumaa was designated in January -- along with nine individuals and 19 entities connected to his drug trafficking and money laundering. A Treasury statement said he "coordinated the transportation, distribution, and sale of multi-ton shipments of cocaine from South America and has laundered the proceeds from the sale of cocaine in Europe and the Middle East, according to investigations led by the Drug Enforcement Administration." Joumaa's whereabouts are unknown. He is believed to hold Lebanese and Colombian passports.

One of the entities designated along with Joumaa was a company that runs a used car business in Benin and Congo out of southern Lebanon. Its manager, Iman Kharoubi, told Lebanon's Daily Star last month: "We work in Lebanon and Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don't have anything to do with him." CNN's attempts to reach Kharoubi were unsuccessful.

For several years, U.S. authorities have alleged that Hezbollah is profiting from drug trafficking from South America to Europe via west Africa. In June 2008, the U.S. Treasury Department designated two Venezuelans of Lebanese descent as Hezbollah financiers and supporters.

Source: CNN

FBI agents in town help fight cross-border crime

By Marie Magleby, Special to Gulf News

Published: May 31, 2008, 23:44

Abu Dhabi: Gary Price and Ernest Herbert carry FBI badges, but their job descriptions are significantly different here than in the US.

"I have no law enforcement authority here," Special Agent Price said.

Instead, the duo are go-betweens for local and US law enforcement. He said, "We work closely with UAE government officials to share information that protects the two countries."

They also offer training at the request of local authorities. The training involves many aspects of law enforcement, including ways to combat white-collar crime, violent crime, forensics and counter-terrorism.

In addition, the agents coordinate the Middle East Law Enforcement Training Centre in Dubai, which offers week-long courses for law enforcement personnel from around the Gulf.

Local authorities choose the topics and dates, and FBI specialists come from the US to teach the courses. Since its establishment in 2001, the centre, co-sponsored by the FBI and Dubai police, has conducted about 40 courses dealing with money laundering, computer crimes, intellectual property rights, kidnapping, auto theft, homicide, financial institution fraud, terrorist financing, hostage negotiations and more.

The globalisation of crime, especially financial and internet crime, places the agents in a pivotal position. "The UAE is an important crossroads for business and, as a result, also for crime," Price said of the potential for fraud or abuse in the banking system. With the help of local officials, they routinely seek to investigate bank records and track financial transactions linked to the US.

When internet crime is traced back to the US, the agents are also able to help. Just months ago, a prominent UAE citizen received a cyber threat from a location in the US.

Local law enforcement officials contacted Price and Herbert, who enlisted agents in the US to conduct an investigation. The man was arrested, charged and is now facing imprisonment.

About working with local authorities, Price said: "I truly enjoy working with the Emiratis. They are professional and very gracious." There are, however, obstacles. According to Price, a federal law that regulates "international judicial cooperation" is often misinterpreted to be a roadblock to investigations. "There is not a timely, quick way for law enforcement response because of the bureaucratic process," he said.

Law enforcement mechanisms do not always translate across cultures and borders, Herbert said in a similar vein. "Things are run differently here than in the US, so we have to do things differently."

When FBI agents are on international assignment, they assume the title of Legal Attaché in their respective embassies. Price and Herbert are successors to three other agents since the Abu Dhabi office opened in December 2003. They cover both the UAE and Oman. In the region, the FBI also has agents posted in Afghanistan, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Pakistan, Saudi Arabia and Yemen.

During his tenure, former FBI director Louis Freeh pushed to expand the bureau's international presence. It now has offices in 62 countries. This worldwide network of agents is a necessary countermeasure against the growing nexus of international crime. "Just as there are no borders for crime and terrorism, there can be no borders for justice and the rule of law," current director Robert Mueller told the US Senate in March.

Progress

"Twenty years ago, the idea of regularly communicating with our law enforcement counterparts around the world was as foreign as the internet or the mobile phone. Today, advances in technology, travel and communication have broken down walls between countries, continents and individuals," Mueller added. Price and Herbert embody this prog-ress.

Mueller became the dir-ector one week prior to the September 11, 2001 attacks.

The FBI began as a special agent force in 1908 and received its current title in 1935. Since its genesis, the FBI has seen its share of success and failure. Though it has successfully foiled numerous plots, conspiracies and espionage attempts, it has been criticised for shoddy investigation tactics and ignoring intelligence reports that could have prevented past attacks. Regardless, it has survived a century of challenges.

- The writer is a journalist based in Abu Dhabi.

Source: GulfNews

Bank of China: Terror allegations 'unfounded'

By Lydia Chen

Bank of China today dismissed allegations that it helped terrorist groups by transferring millions of dollars and said the accusations are "sheer nonsense" and are "completely unfounded."

The bank has always "strictly" adhered to regulations regarding international money laundering and terrorism financing. Its internal rules also forbid providing any services to terrorist groups, Wang Zhaowen, a spokesman for the country's third largest lender said, Xinhua news agency reported.

Kent Henderson, who represents more than 100 Israelis, has alleged in a complaint filed on August 22 in the Los Angeles Superior Court, that from 2003, Bank of China conducted dozens of wire transfers worth several million dollars to Hamas and Islamic Jihad through branches in the United States, the Associated Press reported.

The banking services "caused, enabled and facilitated the terrorist attacks in which the plaintiffs and their decedents were harmed and killed," Henderson wrote in the complaint, which seeks unspecified damages.

Wang said the bank will clarify its position through legal process and reserves the right to file lawsuits or take other legal action.

"We trust that the US court will reach a fair verdict based on the facts," Wang said.

The Shurat HaDin Israel Law Center, which is backing the suit against Bank of China, began suing banks on behalf of victims of terrorism in May. It accused the financial institutions, including UBS AG, of providing financial services that ended up helping terrorist groups. Last month, five Lebanese banks were sued in the US and Canada.

Source: Shangai Daily

EU to tighten screw on Tehran bank

By Daniel Dombey in Washington, Financial Times, 15 May 2008

Bank Melli, Iran's biggest commercial bank, is set to be banned from operating in the European Union under proposals in the final stages of discussion in Brussels.

At present, the bank operates branches in the City of London, France and Germany, so blunting American calls for other jurisdictions to break off ties with Iranian institutions, particularly in the Gulf.

"It is important for the EU to come to agreement on stepping up financial pressure on Iranian banks as a means of demonstrating to the Iranian regime how seriously we take their nuclear proliferation," said a European diplomat.

But the time and effort it has taken to get agreement on the move, which comes after a year-long push by the US and its allies, highlight the problems Washington may face in its quest to win international support for tougher sanctions and so convince Tehran to rein in its nuclear programme.

"Many people around the world are looking to Europe on this issue," Stuart Levey, US treasury undersecretary, told the FT. "What Europe does is quite important."

The US effort dates back to last summer, when negotiations began on a UN Security Council resolution that Washington and its allies wanted to prevent Melli and another Iranian bank, Bank Saderat, from doing business internationally.

In October, the Bush administration intensified its effort with unilateral sanctions against a number of Iranian institutions – including both Melli and Saderat – measures that Washington pushed other jurisdictions to emulate.

"We call on responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat [another Iranian bank], Bank Saderat, and all companies and entities of [Iran's] Islamic Revolutionary Guards Corps," Hank Paulson, treasury secretary, said on that occasion.

However, Washington found itself caught in a "catch-22" when it pushed the UK, its closest ally, to close Melli and Saderat's operations in London. Britain said it could act only as part of a general EU decision and, within the EU, countries such as Germany, Austria, Spain and Italy called for a UN decision before they would proceed.

Seeking to break the impasse, the US, Britain and France finally won agreement on a UN Security Council resolution in March that merely called on member states to exercise "vigilance" over Iranian banks, especially Bank Melli and Bank Saderat, due to what it said was their link to proliferation and Iran's nuclear programme.

"It's pretty clear that the US had hoped that this would happen more quickly and perhaps be a little bit more robust," said Mr Levey.

Diplomats said the UN resolution was designed to "open the door" to an outright EU ban on the banks' subsidiaries in Europe. However, the EU has been reluctant to take action against Bank Saderat, which is principally faulted by the US for funnelling funds to Hizbollah, the Lebanese Shia movement. The Islamist organisation is not on the EU's list of proscribed terrorist organisations.

Throughout the past year, Iran has continued to expand its nuclear programme, announcing plans last month to install 6,000 new centrifuges to enrich uranium – although many western diplomats and analysts question their efficiency.

While Iran insists its programme is purely peaceful, the US and its allies accuse it of seeking to develop nuclear weapons.

US diplomats add that at present they are reluctant to embark on an attempt to pass another UN Security Council resolution because of the risk that it will provide meagre returns while highlighting differences with Russia and China, which are sceptical about further sanctions.

But Mr Levey said the financial sanctions, international warnings about the risk of money laundering and terror-financing in Iran, and related moves by international banks to scale down business with Tehran had had a big impact.

"It certainly has made the cost of financing [in Iran] to the extent that anyone has offered it at all, much more expensive," he said.

http://money.ninemsn.com.au/article.aspx?id=563862

Analysts: al-Qaida awash in funds despite meltdown

The meltdown in the global financial system may spare al-Qaida.

Buoyed by years of record oil revenues in the Gulf and Afghanistan's booming drug trade, al-Qaida and other Islamic terrorist groups are thought to have access to strong potential funding sources — and thus might dodge fallout from the global crunch devastating others.

Yet all is not lost in the effort to rein in money for terror groups. One principal reason the groups may avoid fallout now is because they've been forced to pull away from banks, relying instead on less-efficient ways to move money.

Those methods — including hand-carrying money and using informal money-transfer networks called hawalas — likely will shield extremists from the current banking system turmoil.

But the methods also are slower and less efficient ways to move money — and thus could hamper efforts to finance attacks, analysts say.

"It would be inconceivable that large amounts of (terror-linked) money would transit through the formal financial system, because of all the controls," said Ibrahim Warde, an expert on terrorist financing at The Fletcher School at Tufts University.

The question of where al-Qaida and sympathizers get their money has long been crucial to efforts to prevent terror attacks. A 2004 U.S. investigation found that banks in the United Arab Emirates had unwittingly handled most of the $400,000 spent on the Sept. 11 attacks.

After the attacks, the U.S. made an aggressive push to use law enforcement techniques to disrupt terrorist financing networks and worked with allies to improve their own financial and regulatory institutions.

Despite those efforts, wealthy donors and Islamic charities in the oil-rich Gulf, especially in Saudi Arabia, continue to be "one of the most significant sources of illicit financing for terrorism," said Matthew Levitt, a former U.S. Treasury Department terrorism expert now with The Washington Institute for Near East Policy.

The Saudis have long insisted they are doing all they can to rein in terror financing, and U.S. officials have praised their efforts.

But, under a system known as zakat, wealthy Muslims are required to give a portion of their money to the poor. Much of that is given to Islamic charities, and U.S. officials say at least some of the charities money continues to be channeled to al-Qaida and other terror groups.

Saudi Arabia and other Gulf countries have benefited over the last two years from a surge in oil prices from about US$60 per barrel at the beginning of 2007 to more than US$145 per barrel in the middle of this year.

Oil prices have fallen almost 50 percent in the last few months in response to the global financial crisis, but not before the run-up generated hundreds of billions of dollars.

Levitt said the covert nature of terrorist financing makes it difficult to determine a direct correlation between rising oil revenues over the last few years and the amount of cash al-Qaida has on hand.

But "it stands to reason that if there is more oil revenue, there will be more revenue for all kinds of things licit and illicit," he said.

Al-Qaida and the Taliban have also benefited from the drug trade's growth in Afghanistan after the U.S.-led invasion in 2001 — a booming business that likely won't be affected by the global slowdown.

Opium cultivation has fallen slightly this year but is still about 20 times higher than in 2001, according to the U.N. Office on Drugs and Crime.

Former U.S. drug czar Gen. Barry McCaffrey, who now works with NATO, issued a report on Afghanistan in July saying al-Qaida and the Taliban "are principally funded by what some estimate as $800 million dollars a year derived from the huge $4 billion annual illegal production and export of opium/heroin and cannabis."

Al-Qaida and other extremist groups have gloated in recent weeks about the West's financial woes, painting the crisis as either divine punishment for supposed wrongs or the last gasps of a dying empire.

An American al-Qaida member, Adam Gadahn, said in a video released this month that "the enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing."

Members of the militant Palestinian group Hamas and hard-liners in Iran also cheered the economic turmoil.

Iran is thought to be the last major government supporter of terror groups. The majority Shiite country is not believed to finance al-Qaida, a Sunni group, but does support the militant Hezbollah faction in Lebanon, which engaged in war with Israel in 2006.

Iran denies the financial crisis is hurting its economy, but falling oil prices will cut into its crude sales, which make up 80 percent of the government budget. It is unclear how that will affect support to Hezbollah.

Despite the apparent glut in potential money for terror groups, Levitt believes anti-terrorism efforts have hampered the groups' ability to transfer money where they want.

Levitt points to several messages from senior al-Qaida leaders in Pakistan and Afghanistan intercepted by the U.S. or released by the terrorist group itself, asking Gulf supporters for more help because of funding shortfalls. Most recently, the al-Qaida leader in Afghanistan, Mustafa Abu al-Yazid, appeared in a May 2007 video saying "the mujahideen of the Taliban number in the thousands, but they lack funds."

But Warde and other analysts are not convinced al-Qaida is really hurting.

"Anybody who is involved in fundraising of any sort is never going to say we have enough money, so I think it is a silly argument to say that because there is this intercept ... it is proof that everything we've done has succeeded brilliantly," said Warde.

Source: Ohio.com

US workshop in Jordan builds support to battle money laundering

The U.S. government organized a workshop in Jordan to teach officials from the Arab countries how to detect and investigate the smuggling of money.

The U.S. has been working with Jordan and other Arab countries to ensure that banking institutions are subject to appropriate oversight and that they have effective programs in place to prevent money-laundering and terrorist financing.

Participants, including representatives from Jordan, Algeria, Egypt, Kuwait, Lebanon, Mauritania, Morocco, Oman, the Palestinian Authority, Qatar, Tunisia and Yemen, examined anti-money laundering standards used by the Financial Action Task Force, a Paris-based inter-government body set up in 1989 by the Group of Eight industrialized nations.

This week, U.S. federal prosecutors said two NY residents were indicted on charges of trying to smuggle $500,000 (euro323,000) from the U.S. to Jordan.

Authorities said a grand jury in Hartford, Connecticut returned an indictment charging 35-year-old Hassan Abuzaitoun and 33-year-old Mohammad Alazzam with conspiracy to commit money laundering and conspiracy to smuggle bulk cash from the United States. Both are naturalized U.S. citizens from Jordan residing in Yonkers, New York.

Jordanian authorities have often asserted that Jordan was free of money laundering because of its strict monetary regulations and practices.

In 2004, three different groups of families of suicide bombing victims in Israel filed suits in a Brooklyn, N.Y. federal court against Jordan's largest financial institution _ Arab Bank _ alleging that it moved donations from Saudi Arabia to militant Palestinian groups, including Hamas and Islamic Jihad.

The bank denied the allegation. It later decided to close down its New York branch saying it was pursuing its strategy to focus on operations in the Arab world and Europe.

http://www.amlosphere.com/america/legislation/us-workshop-in-jordan-builds-support-to-battle-money-laundering.html

Lebanon takes strict measures against money laundering

By Omar Al-Halabi (with photos)

Although Lebanon is not a money-laundering base, it had to take strict procedures after it was listed among non-cooperating counties by a financial action task force on money laundering in 2000.

To be removed from the list in 2002, Lebanon took several steps including issue of law 318/2001 that helps banks avoid being abused as media for money laundering.

Secretary of the investigation authority Mohammad Baaresi told KUNA Tuesday that the authority, established in 2001 and headed by the governor of Lebanon's Central Bank, played a major role in discovering and combating money laundering operations.

He emphasized that law 318 does not violate the confidentiality of banks and noted that there are about 200 cases suspected to be money laundering and terrorism financing every year in Lebanon.

Lebanon played a major role in the establishment of Middle East and North Africa Financial Action Task Force (MENAFATF), headquartered in Bahrain, he noted.

Money laundering is the practice of engaging in financial transactions in order to conceal the source of money gained from illegal acts like drug trading and funds from such origin are often used to finance acts of terrorism, prompting much concern and calls for counter-measures across the globe recently.

Source: Zawya

International Arms Dealer Extradited on Terrorism Offenses

U.S. Department of Justice

**Verbatim

FOR IMMEDIATE RELEASE
Friday, June 13, 2008
WWW.USDOJ.GOV

NEW YORK- Michael J. Garcia, the United States Attorney for the Southern District of New York, and Michele M. Leonhart, the Acting Administrator of the United States Drug Enforcement Administration (DEA), announced that international arms dealer Monzer Al Kassar, a/k/a Abu Munawar, a/k/a El Taous, arrived in New York today after being extradited from Spain on federal terrorism charges. Al Kassar was extradited to New York for his participation in a conspiracy to sell millions of dollars worth of weapons to the Fuerzas Armadas Revolucionarias de Colombia (the FARC) -- a designated foreign terrorist organization -- to be used to kill Americans in Colombia. Al Kassar’s co-defendants, Tareq Mousa Al Ghazi and Luis Felipe Moreno Godoy, were both previously extradited to New York from Romania to face the same terrorism charges. According to the superseding Indictment filed in Manhattan federal court:

Since the early 1970s, Al Kassar has been a source of weapons and military equipment for armed factions engaged in violent conflicts around the world. Some of these factions have included known terrorist organizations, such as the Palestinian Liberation Front (PLF), the goals of which included attacking United States interests and United States nationals.

To carry out his weapons-trafficking business, Al Kassar developed an international network of criminal associates, including co-defendants Al Ghazi and Moreno Godoy, as well as front companies and bank accounts in various countries, including the United Kingdom, Spain, Lebanon, Syria, Iraq, Poland, Bulgaria, and Romania. Additionally, Al Kassar has engaged in money-laundering transactions in bank accounts throughout the world to disguise the illicit nature of his criminal proceeds.

Between February 2006 and May 2007, Al Kassar agreed to sell to the FARC millions of dollars worth of weapons, including thousands of machine guns, millions of rounds of ammunition, rocket-propelled grenade launchers (RPGs), and surface-to-air missile systems (SAMs). During a series of recorded telephone calls, e-mails, and in-person meetings, Al Kassar agreed to sell the weapons to two confidential sources working with the DEA (the CSs), who represented that they were acquiring these weapons for the FARC, with the specific understanding that the weapons were to be used to attack United States helicopters in Colombia.

During their consensually-recorded meetings, Al Kassar provided the CSs with, among other things: (1) a schematic of the vessel to be used to transport the weapons; (2) specifications for the SAMs he agreed to sell to the FARC; and (3) bank accounts in Spain and Lebanon that were ultimately used to receive and conceal more than $400,000 sent from DEA undercover accounts that the CSs represented were FARC drug proceeds for the weapons deal. During his meetings with the CSs, Al Kassar reviewed Nicaraguan end-user certificates that he accepted despite knowing that the arms were destined for the FARC in Colombia. Al Kassar also promised to provide the FARC with ton-quantities of C-4 explosives, as well as expert trainers from Lebanon to teach the FARC how to effectively use C-4 and improvised explosive devices (commonly referred to as IEDs). In addition, Al Kassar offered to send a thousand men to fight with the FARC against United States military officers in Colombia.

The Indictment charges Al Kassar with four separate terrorism offenses:

Count One: Conspiracy to kill United States nationals, in violation of Title 18, United States Code, Section 2332(b);

Count Two: Conspiracy to kill United States officers or employees, in violation of Title 18, United States Code, Sections 1114 and 1117;

Count Three: Conspiracy to acquire and use anti-aircraft missiles, in violation of Title 18, United States Code, Section 2332g; and

Count Four: Conspiracy to provide material support or resources to a designated foreign terrorist organization, in violation of Title 18,

United States Code, Section 2339B.

In addition, Al Kassar is charged in Count Five with money laundering, in violation of Title 18, United States Code, Section 1956.

The superseding Indictment seeks the forfeiture of an estate located in Marbella, Spain, and all funds contained in three separate bank accounts. The forfeitures represent the alleged proceeds obtained from the charged offenses.

Al Kassar is expected to appear later this afternoon in Magistrate court in Manhattan federal court.

If convicted of Counts One through Three, Al Kassar faces a maximum sentence of any term of years or life imprisonment, as well as a mandatory minimum sentence of 25 years’ imprisonment on Count Three. As part of the extradition process, however, the United States has provided assurances to the government of Spain that it will not seek a life sentence for Al Kassar, but instead will ask for a prison term of years. If convicted of Count Four, Al Kassar faces a maximum sentence of 15 years' imprisonment. Finally, if convicted of Count Five, Al Kassar faces a maximum sentence of 20 years' imprisonment.

The international law enforcement operation that culminated with today’s extradition was the result of cooperation between the DEA, the Spanish National Police, and the Romanian Border Police.

Mr. Garcia praised the investigative efforts of the DEA, the Spanish National Police, and the Romanian Border Police. Mr. Garcia also thanked the United States Department of Justice’s Office of International Affairs and the U.S. State Department.

"Monzer Al Kassar intended to provide millions of dollars worth of lethal weapons to a foreign terrorist organization to be used to kill Americans," said U.S. Attorney Michael J. Garcia. "As a result of extraordinary cooperation with our international law enforcement partners, Al Kassar will now face justice for his crimes in a United States courtroom."

"The arrest, extradition and pending criminal prosecution of Monzer Al Kassar before a U.S. Court of justice are a testament to DEA's global alliances and unique investigative skills," said DEA Acting Administrator Michele M. Leonhart. "Al Kassar's days of arming and funding global terrorists are over. Spanish authorities are to be commended for their diligence and perseverance to ensure Al Kassar's extradition to the United States."

Assistant United States Attorneys Boyd M. Johnson III, Leslie C. Brown, and Brendan R. McGuire are in charge of the prosecutions.

The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

Lebanon Parliament Approves New Measure to Combat Money Laundering

Parliament on Wednesday approved a law widening powers of investigators into cases of money laundering while maintaining limited lifting of the nation's banking secrecy. The house also approved joining the U.N. treaty on combating corruption.

Parliament adopted a law dropping fans on due license fees for vehicles, provided settlement is completed before the end of 2008.

Source: Naharnet

Organized Crime Embraces Film Piracy; Terrorists May Follow, Report Says

By Matthew Harwood

Film piracy by organized crime is flourishing worldwide, with some of the proceeds possibly financing terrorism, according to a new report from the RAND Corp. financed by the Motion Picture Association.

“If you buy pirated DVDs, there is a good chance that at least part of the money will go to organized crime and those proceeds fund more dangerous criminal activities, possibly terrorism,” said RAND’s Greg Treverton, the study’s lead author.

The criminal organizations that traffic pirated DVDs span the globe and often have multinational criminal connections. The report tells of one Italian crime boss turned government witness who explained the his organization's connection to Chinese and Taiwanese criminal gangs involved in film piracy and other acts of counterfeiting.

“Given the enormous profit margins, it’s no surprise that organized crime has moved into film piracy,” said Treverton.

The profits associated with film piracy are astounding, outperforming revenue generated from both Iranian heroin and Colombian cocaine. In Malaysia, a pirated DVD costs 70 cents to make and sells on a corner in London for $9, more than 1,000 percent markup.

The report also discusses three groups that have used film piracy to finance terrorism. The best-documented case involves the Irish Republican Army, which used film piracy among other criminal activities, to fund its terrorist campaign against the British government. Another case involves the D-Company, an Indian criminal group heavily involved in film piracy. In 1993, the group carried out a string of bombings on what became known as “Black Friday” in Mumbai, killing 257 people and wounding hundreds more.

The third example has the most relevance today.

In 2004, the U.S. government labeled DVD pirate and counterfeiter extraordinaire Assad Ahmad Barakat “a specially designated global terrorist” for transferring $3.5 million to Hezbollah. His criminal network operates within the heavily Lebanese tri-border area of Argentina, Brazil, Paraguay, in what RAND calls “most important center for financing Islamic terrorism outside the Middle East.” (For more on the connection between Islamic extremism, terrorist financing, and the tri-border region, see John Barham's "Hezbollah's Latin American Home," from the Feb. 2008 issue.)

RAND notes the boom in film piracy is directly linked to weak penalties when someone is caught and convicted, which is rare.

An individual convicted of selling counterfeit products in France can expect a maximum of two years in prison and a $190,000 fine compared to ten years in prison and a fine of $9.5 million if caught selling drugs. In the United States, 134 people were sentenced to federal prison for intellectual property crimes in 2002, while 1.5 million people were arrested for drug offenses nationwide in 2003.

If governments worldwide want to decrease the volume of counterfeited goods and cut off a possible avenue of terrorist financing, RAND recommends spending more money and manpower to address the problem while passing tougher penalties for those convicted of counterfeiting and other intellectual property crimes.

Source: Security Management

UAE to join hands with 82 nations to fight dirty funds

The UAE said yesterday it will sign new anti-money laundering agreements with 82 countries as part of an intensified strategy to combat dirty funds.

The National Anti-Money Laundering Committee (NAMLC) discussed the plans at a meeting that also covered recent cases of currency fraud and other issues.

The Central Bank, which organised the meeting in Dubai, said the committee heard that a memorandum of understanding (MoU) had so far been signed between the anti-money laundering unit and 21 countries.

They were told that the unit planned to sign MoUs with 82 other nations that were members of the Egmont Group, an international gathering of financial intelligence units.

Some of the countries covered by the agreements have large communities in the UAE and financial sources say the agreements will strengthen the drive to crack down on dirty money and ensure the banking system here remains clean.

"These agreements demonstrate the commitment of the UAE to share financial information with its global partners to co-ordinate the efforts against money laundering, terrorist financing and related crimes," a Central Bank spokesman said after some of the deals were signed earlier this year.

"These agreements were aimed at further supporting the UAE's continued co-operation with the international community on subjects of mutual concern and on ways to strengthen co-operation on combating money laundering."

MoUs were signed with the financial intelligence units of Lebanon, Belgium, Brazil, Croatia, Estonia, Isle of Man, Macedonia, Malawi, Monaco, Nigeria, Portugal, the Philippines, Serbia, South Africa and other countries.

The agreements followed a pledge by the UAE last year to push ahead with an extensive campaign against money laundering and terrorist funding through intensified regional and international co-operation.

Source: Emirates Business 24/7

US moves to seize US assets of Iranian bank's "front" company

US authorities Wednesday designated New York-based Assa Corp. as a "front company" of an Iranian state-owned bank linked to weapons proliferation, and moved to seize its assets.

The US Treasury said that Assa had funnelled funds to Bank Melli, branded by Washington and the European Union as a "proliferator" linked to Iran's nuclear and ballistic missile programs.

"This scheme to use a front company set up by Bank Melli -- a known proliferator -- to funnel money from the United States to Iran is yet another example of Iran's duplicity," said the Treasury's under secretary for terrorism and financial intelligence Stuart Levey.

"The dangerous mix of proliferation and deception has led the United States, the European Union and Australia to designate Bank Melli, and the United Nations to issue a call for vigilance with respect to all Iranian banks," he said in a statement.

The Treasury charged that the bank provided financial services, including opening letters of credit and maintaining accounts, for Iranian front companies and entities engaged in proliferation activities.

In addition, Bank Melli has facilitated the purchase of sensitive materials utilized by Iran's nuclear and missile industries, and has handled transactions for other designated Iranian entities, including Bank Sepah, Defense Industries Organization, and the Shahid Hammat Industrial Group, the statement said.

The US Justice Department said separately Wednesday that it was pursuing legal action to seize ASSA's assets in New York.

They included a 40 percent interest in a 36-story office tower at the upscale Fifth Avenue in Manhattan, New York.

"In the forfeiture complaint, the United States seeks to forfeit all right, title and interest of Assa Corporation, Assa Company Limited, and Bank Melli in 650 Fifth Avenue Company, including 650 Fifth Avenue's interest in the building," a statement by the department said.

The United States also sought to seize funds that were seized from Assa Corp.'s bank accounts, it said.

Assa Corp.'s interest in 650 Fifth Avenue Company was "forfeitable as property involved in money laundering and a conspiracy to commit money laundering," it said.

Washington has steadily upped sanctions against Iranian entities in hopes of pressuring Tehran to pull back on its nuclear program -- which the US says is aimed at developing nuclear weapons -- and to halt its alleged support for groups Washington has labelled "terrorist," including Lebanon's Hezbollah and armed Palestinian groups.

Iran, a leading OPEC oil producer, denies it is seeking nuclear weapons and says its nuclear program aims to provide energy for its growing population when its reserves of fossil fuels run out.

Source: AFP

Al Madina Bank Money Laundering Suspects Identified in Lebanon

Saturday, 19 May, 2007 @ 3:41 PM

Beirut, Lebanon - State Prosecutor Saeed Mirza has referred 11 suspects purportedly involved in the Al Madina Bank scandal to Beirut Public Prosecutor Joseph Maamari.

Lebanese newspapers citing judicial sources, on Saturday said the 11 were believed to have a hand in the case of money laundering at Al Madina Bank in 2003.

It identified the suspects as, in addition to former executive secretary of Al Madina scandal heroine Rana Qoleilat (right), her two brothers -- Taha and Basel Qoleilat -- as well as Adnan Abou Ayyash.

Among the names in the report were bank employees Youssef al Hashi, Kazem Bahlawan, Fouad Qahwaji and Rene Kaado Moawwad.

Lebanese press indicates that Adnan Abou Ayyash's brother, Ibrahim Abou Ayyash, and his son, Wissam Ibrahim Abou Ayyash, were also among the suspects.

It quoted the sources as saying investigation with this group of suspects will only focus on the issue of money laundering.

The suspects reportedly included a person who had a "strong work relationship" with Qoleilat.

Qoleilat, who is facing fraud charges in Lebanon, is jailed in Brazil for allegedly trying to bribe security officers to release her.

She was earlier jailed in Lebanon for her supposed role in the disappearance of more than $300 million from Al Madina Bank in 2003.

Source: Naharnet

http://yalibnan.com/site/archives/2007/05/al_madina_bank.php

Lebanon: Middletown pastor pleads guilty to laundering drug dealer's money

By Tiffany Y. Latta

Tuesday, January 09, 2007

LEBANON — A Middletown pastor accused of using his personal account and his church to launder drug money pleaded guilty Monday to two felonies.

Keith L. Brooks, 52, bishop and founder of Power of Deliverance Temple/Judah Sanctuary of Praise on Crawford Street in Middletown, pleaded guilty to one count of engaging in a pattern of corrupt activity and two counts of money laundering.

He faces 10 years in prison when he is sentenced Feb. 16.

Defense attorney Kenneth Lawson of Cincinnati said his client is innocent and only pleaded guilty because prosecutors threatened to file charges against his wife and the church.

"He believes it was in his best interest to get this over with and that this was the best way to resolve this," Lawson said.

Warren County prosecutors dismissed 43 of 45 counts of money laundering against Brooks, of 4412 Brandon Lane.

Prosecutors said Brooks rented a home at 280 W. Pekin Road in Clearcreek Twp. to James Scott — a member of his congregation and a convicted cocaine dealer who has been eluding police for a year — for about three years at $2,000 a month. The counts against Brooks represent the number of times Scott is alleged to have paid him rent using drug money.

A county grand jury in October indicted Brooks after the Warren County Drug Task Force began investigating Scott for drug activity in 2004 and reported they seized $46,000 from a safe and 11 pounds of crack cocaine from the house he rented from Brooks.

Scott was free in lieu of a $50,000 bond during his trial when he ran off. At the time, a jury was deliberating nine counts of drug trafficking and drug possession (powder and crack cocaine) against him.

Toby Morris, 67, of Middletown, who has known Brooks about seven years, said the pastor is a good man.

"The only thing he's guilty of is trusting people too much," Morris said.

John Burke, drug task force commander, said Brooks and his church have helped people legally, but made a different arrangement with Scott.

Burke said Brooks purchased the home with his own money and had Scott help him pay the mortgage with drug money.

"It would be nice to say that he was trying to help somebody, but that is simply not the case," Burke said.

http://www.daytondailynews.com/n/content/oh/story/news/local/2007/01/08/ddn010907brooks.html

Brazil rejects U.S. action against alleged terrorist links in tri-border area

The Associated Press
Friday, December 8, 2006
RIO DE JANEIRO, Brazil

Brazil has rejected U.S. sanctions against alleged terrorist fundraisers in the tri-border area with Argentina and Paraguay, saying American officials failed to present sufficient evidence.

The Foreign Ministry announcement late Thursday indicated that the three South American governments are unwilling to place complete trust in U.S. assertions about the war on terror.

The administration of U.S. President George W. Bush on Wednesday imposed sanctions on what it termed a major fundraising channel for the Islamic militant group Hezbollah in the tri-border area, focusing on nine people plus a shopping center in Paraguay and an electronics company located there.

The U.S. Treasury Department barred Americans from doing business with them and said any bank accounts or other financial assets belonging to the nine people and the businesses found in the United States must be frozen.

But Brazil said the three countries met in Buenos Aires this week and decided there was not "any new data or evidence that corroborates the accusation by the United States."

It also said the United States had failed to prove oft-repeated suggestions that the region itself is a hotbed of terrorist financing.

"In light of the information available, there is no sign of the occurrence in that region of activities linked to terrorism or their financing," the Foreign Ministry statement said. "That position is shared by Argentina and Paraguay."

The ministry said that "unilateral statements that arbitrarily single out the tri-border region cause undue harm to the region," but it reiterated Brazil's "international commitment ... for the prevention and combat of terrorism."

The tri-border region is considered a haven for arms traffickers, smugglers and counterfeiters and is home is thousands of Lebanese Muslims. The United States considers the Lebanon-based Hezbollah a terrorist organization and the group is suspected of involvement in terrorist attacks worldwide.

At least some local analysts praised Brazil's action.

"It's a question of national sovereignty," said Alexandre Barros, a political analyst with the Early Warning consulting firm in Brasilia. "The United States says it's all rotten here, but Brazil has no international obligations unless they are proven and discussed. They say, 'We're going to clamp down,' but that's unacceptable. Brazil doesn't have to accept"

Barros said Brazil had been cooperative in opposing international terrorism, "but the problem has to be concrete."

The U.S. alleges that it had identified people who had given financial and other assistance to Assad Ahmad Barakat, whose "network in the tri-border area is a major financial artery to Hezbollah in Lebanon," said Adam Szubin, director of the Treasury Department's Office of Foreign Assets Control.

The Treasury Department alleged that Muhammad Yusif Abdallah, allegedly an owner of the Galeria Page shopping center in Paraguay, is a senior Hezbollah leader who pays a percentage of his income to the group.

It also said that Hamzi Ahmad Barakat funded Hezbollah through his electronics store, Casa Hamze, located in the shopping center.

The U.S. government said regional law enforcement authorities have been concerned about their activities and the U.S. move should come as no surprise.

"The U.S. government stands firmly behind our designation of these nine individuals as terrorist financiers for Hezbollah," Molly Millerwise, the department's public affairs director, said in an e-mail on Friday to The Associated Press.

"It is important for countries around the world to recognize that their obligation to fight terrorism extends beyond simply preventing attacks within their own borders and includes halting the export of funds that facilitate terrorism elsewhere," she said.

http://www.iht.com/articles/ap/2006/12/08/america/LA_GEN_Brazil_U.S._Terror.php

Argentina, Brazil, Paraguay deny terrorism at shared border

The governments of Argentina, Brazil and Paraguay on Thursday rejected accusation made by a U.S. report that the so-called "triple frontier" where the three nations meet is a haven for terrorists.

The joint statement said that the U.S. document had presented no new evidence for their repeated claim that terrorism and terrorist financing operated in the region.

The statement was issued at the end of the three-day fifth Plenary Meeting of the 3+1 Mechanism on Triple Frontier Security held in Buenos Aires.

The final statement was a reply to the United States, which was an observer at the meeting and has recently published a report saying that the "triple frontier" is home to a network charged with collecting funds and staff for Lebanon's Hezbollah guerilla.

The U.S. authorities on Wednesday froze the U.S. assets of nine people and two businesses in the border area, accusing them of transferring millions of dollars to Hezbollah, which engaged in a fierce fighting with Israel this summer. Washington labeled the organization as a terrorist group.

Source: Xinhua

http://english.people.com.cn/200612/08/eng20061208_330089.html

U.S. says Hezbollah gets money via South America

By Gilbert Le Gras

WASHINGTON (Reuters) - The United States on Wednesday froze the U.S. assets of nine people and two businesses in the border area of Brazil, Argentina and Paraguay who Washington said helped funnel millions of dollars to Lebanon's Hezbollah.

The U.S. government considers Hezbollah, a Shi'ite Muslim group whose guerrillas fought a 34-day war with Israel in July and August, a terrorist organization.

The Treasury said the people and businesses raised and transferred cash for Hezbollah through the so-called triple border area between the South American countries, which is home to a large Arab community.

The action triggered a U.S. executive order on Wednesday freezing their U.S. assets and banning transactions with U.S. citizens and banks.

"...It is safe to say that millions of dollars have been raised and moved by this network," Treasury Assistant Secretary for terrorist financing Pat O'Brien told reporters in reference to the triple-border area. "One of the key ways money has moved is through personal couriers."

For example, O'Brien said one of the people on the list, Ali Kazan, raised more than $500,000 for Hezbollah as recently as August.

The U.S. government has raised concern in recent years that the porous frontier region is a center of fund-raising and money laundering for Middle Eastern groups like Hamas and Hezbollah. Brazil denies this.

The Treasury Department said the nine people named on Wednesday funneled cash to Assad Ahmad Barakat, who it called a "specially designated global terrorist." The Treasury Department has previously described Barakat as a "key terrorist financier in South America" for Hezbollah.

Among the nine, the Treasury Department said that Muhammad Yusif Abdallah is a senior Hezbollah official in the region who owns a shopping center in Ciudad del Este, Paraguay, where several businesses are owned by Hezbollah members. The Galeria Page mall serves as a source of fund-raising for Hezbollah, the Treasury Department said.

"Abdallah has personally carried money for Hezbollah, serving as a courier of Hezbollah funds from the (triple-border area) to Lebanon," the department said in a statement.

The Treasury Department said other Hezbollah members working in the triple-border area are suspected of trafficking in narcotics, counterfeit U.S. dollars, weapons and explosives.


http://today.reuters.com/news/articlenews.aspx?type=topNews&storyID=2006-12-06T221251Z_01_N06449091_RTRUKOC_0_US-USA-FINANCE-LATAM.xml&WTmodLoc=NewsHome-C1-topNews-6