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