Lebanese Financial Institutions, Including Institutions Linked to Hizballah, Allegedly Wired Over $300 Million into the United States for the Purchase and Shipment of Used Cars to West Africa as Part of Money Laundering Scheme
Proceeds from Car Sales and Narcotics Trafficking Allegedly Were Funneled Back to Lebanon Through Hizballah-Controlled Money Laundering Channels
Preet Bharara, the United States Attorney for the Southern District of New York, and Michele M. Leonhart, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the filing of a civil money-laundering and in rem forfeiture complaint (the “Complaint”) alleging a massive, international scheme in which Lebanese financial institutions, including a bank and two exchange houses linked to Hizballah, used the U.S. financial system to launder narcotics trafficking and other criminal proceeds through West Africa and back into Lebanon. As part of the scheme, funds were wired from Lebanon to the United States to buy used cars, which were then transported to West Africa. Cash from the sale of the cars, along with proceeds of narcotics trafficking, were then funneled to Lebanon through Hizballah-controlled money laundering channels. Substantial portions of the cash were paid to Hizballah, which the U.S. Department of State designated as a Foreign Terrorist Organization in 1997. As alleged in the Complaint, the Hizballah-linked financial institutions involved in the scheme include the Lebanese Canadian Bank (“LCB”) and two Lebanese exchange houses – the Hassan Ayash Exchange Company and Ellissa Holding – and their related subsidiaries and affiliates.
The Complaint alleges that the assets of LCB, the Hassan Ayash Exchange, and Ellissa Holding, along with the assets of approximately 30 U.S. car buyers and a U.S. shipping company and related entities that facilitated the scheme, are forfeitable as the proceeds of violations of the International Emergency Economic Powers Act (“IEEPA”), together with Executive Orders and U.S. Department of the Treasury regulations, and as property involved in and the proceeds of money laundering offenses. The Complaint also seeks civil money laundering penalties totaling $483,142,568 from these entities, representing the sum of the funds they laundered.