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Money laundering and drug trafficking network of Lebanese Hezbollah

Counterterrorism

Money laundering and drug trafficking network of Lebanese Hezbollah

Iran-backed Lebanese terrorist outfit Hezbollah’s name has been appearing in the Arab and international media exposing its massive network of money laundering and drug trafficking. On January 6, 2021, Al Arabiya, the Gulf news network published an explosive revelation. According to the report, in the late 2016, a high-placed Hezbollah operative named Nasser Abbas Bahmad visited what is known as the Tri-Border Area (TBA), where the frontiers of Argentina, Brazil, and Paraguay meet. His apparent mission was to establish a supply line of multi-ton shipments of cocaine from Latin America to overseas markets in order to generate funds for the Lebanese terrorist group Hezbollah. Later, it was learned, Nasser Abbas Bahmad and his business associate, Australian-Lebanese national Hanan Hamdan, were put on a US watchlist in December 2020.

According to analyst Emanuele Ottolenghi, over the past decades, Hezbollah has built a well-oiled, multibillion-dollar money-laundering and drug-trafficking machine in Latin America that cleans organized crime’s ill-gotten gains through multiple waypoints in the Western hemisphere, West Africa, Europe, and the Middle East. Traditionally, Hezbollah used the TBA’s illicit economy as a hub for money-laundering—less so for cocaine trafficking. For years, Hezbollah-linked drug traffickers in the TBA moved only relatively small quantities of cocaine. Multi-ton shipments are another story.

The large cocaine shipments tied to Hezbollah’s money-laundering networks used to flow from Colombia and Venezuela, and with good reason. Colombia remains Latin America’s largest producer of the white powder, and Venezuela, under the Iran-friendly narco-regime of Nicolas Maduro, is a key transit point for cocaine shipments. If Hezbollah is now involved in establishing a major cocaine supply line in the TBA, something must have changed in its modus operandi. Have Hezbollah’s trade routes shifted?

As if that were not puzzling enough, here is another mystery the media revelations leave unsolved. By December 2017, Bahmad—once a film producer known for his skill as a propagandist but with seemingly no business experience—had left the area, never to return. GTG Global Trading Group S.A., the company he established only a few months before disappearing, lies dormant to this day. Why did Bahmad vanish before the first consignment of his product shipped from Paraguay? Did local authorities thwart his mission? Did someone snitch on him? Or did the producer produce—that is, did he accomplish his mission, leaving no reason for him to stay in the TBA? Did he fool everyone, establish his supply line, and place it in trusted hands before vanishing?

Based on dozens of interviews with confidential sources, documents obtained from regional intelligence informants, and open-source research, a study by the Begin-Sadat Center for Strategic Studies reveals the singular story of Nasser Abbas Bahmad and his foray into Latin America. His story in turn illustrates how Hezbollah established its largest financial laundromat in Latin America, and how, despite efforts by US and South American law enforcement agencies, it is running at full speed and bankrolling the arming of enemies of America and Israel.

On November 28, 2017, a shipping container from mainland China arrived at Terport, a small private port near Asunción, the capital city of Paraguay. According to the Argentinian intelligence brief Encripdata, Nasser Abbas Bahmad had over 12 tons of charcoal stored in Terport’s customs area, ready to be packaged and shipped once company bags arrived by container. But customs authorities did not release the container until January 16, 2018, when a team of Paraguayan investigators inspected it.

They were following a clue. The shipment’s owner, a newly established import-export company in Paraguay called GTG Global Trading Group S.A., was allegedly a cover for a budding Hezbollah global narco-trafficking scheme. GTG in Paraguay is a subsidiary of GTG Global Trading Group Pty LTD, a namesake Australian company headquartered in Sydney. Paraguayan investigators believed the container’s owners had been in the country for over a year disguising cocaine as the charcoal briquettes normally used to fuel Lebanese hookah pipes.

Drug traffickers are always devising new ingenious ways of camouflaging cocaine. Cartels employ chemical engineers at both ends of the trade to compound and color the cocaine so it looks like charcoal. The cartels then hide the cocaine at random in larger bags of authentic charcoal. Once the cartels deliver the disguised cocaine, the engineers transform it back to powder before it hits the streets. To make this smuggling operation work, cartels need charcoal traders to play along.

Charcoal is no stranger to such ploys. There have been numerous cases over the past decade of cartels using charcoal to smuggle cocaine— whether Hezbollah was involved is not known. The opportunity for such smuggling from Paraguay is massive. According to the Observatory of Economic Complexity, Paraguay in 2018 was the eighth-largest exporter of charcoal in the world, with a 2.69 percent share of the global market. In 2019 Paraguay slid to 12th place but increased its market share to 2.8 percent.

That charcoal from Paraguay has become a cover for multi-ton cocaine shipments is not in question. Authorities in Paraguay and Spain recently seized two large shipments of cocaine hidden in charcoal bags. The first, in October 2020, was a three-ton consignment of cocaine, found at the same port where Bahmad’s original container was inspected. The second, in December 2020, was a two-ton shipment of cocaine, which Spanish authorities seized at the port of Algeciras. The charcoal used to conceal the drugs was from Paraguay.

No one yet knows whether these shipments are part of the cocaine supply line supposedly set up by Bahmad—though officials who spoke to this author on condition of anonymity identified one of the companies involved as possibly tied to the Bahmad operation.

There is little doubt that in the past, Hezbollah financiers have used charcoal shipments from Latin America to disguise cocaine. The evidence emerged during a US Drug Enforcement Administration (DEA) joint operation, code-named Operation Cedar, with European law enforcement agencies across seven countries to target a large Hezbollah money-laundering network. Operation Cedar targeted money-laundering and drug trafficking activities that occurred during 2012-16 and culminated in sweeping arrests in France in January 2016.

According to French court documents, a Lebanese-Canadian charcoal merchant operating out of Colombia, Hassan Mohsen Mansour, revealed to undercover agents in 2015 that he used his trade as a cover to move dope and launder cash back to Colombian cartels. Operation Cedar exposed Mansour, who was later indicted in Florida. A 2019 Canadian investigation by Global News later revealed that Mansour was in charge of cocaine shipments to Australia. Authorities briefly detained Mansour in Paris in January 2016, and although they later released him, his operation was exposed. That is when GTG Global Trading Group, Bahmad’s company, was incorporated.

GTG has offices in Dubai, Beirut, Berlin, and London in addition to its Sydney headquarters. It also has offices in the Ivory Coast and Guinea in Africa and Paraguay and Brazil in Latin America.

Iraqi commercial registry corporate filings show that GTG Global Trading Group Pty LTD, the Australian company, opened an Iraqi branch in 2018. Records for GTG in Iraq’s commercial registry include a power of attorney for Bahmad’s business partner, Hanan Hamdan, who is co-owner of the parent company in Sydney. The power of attorney was notarized in Australia, confirming this is the same company.

The main businessman behind GTG’s Paraguay branch, which is located in Ciudad del Este (the Paraguayan side of the TBA), is not Paraguayan. Corporate records published by Al Arabiya and Argentinian media identify the owners as Bahmad and Ali Fawaz, a Lebanese-Paraguayan dual national based in the TBA. According to Agustin Ceruse, an Argentinian intelligence analyst, Bahmad chose Fawaz as a partner because Fawaz’s father-in-law had connections in Terport, the shipping port where Bahmad’s cargo was detained— and where police found more than three tons of cocaine hidden in charcoal last October.

Why would drug cartels embrace the business arm of a Shiite radical millenarian terror group? The short answer is that purveyors of dirty money are ecumenical, and Hezbollah itself has never been picky about the bona fides of its financial partners. In fact, US court cases reveal that Hezbollah has assiduously cultivated relations with organized crime across the world for some time. These relations are crucial to its operations.

Officially founded in 1982 in Lebanon by the Islamic Republic of Iran, Hezbollah has sought to organize those who sympathize with its fundamentalist brand of Shiite Islam into a deadly terrorist army capable of serving Tehran’s ideological and geopolitical agenda. The group has survived two wars with Israel, helped spin off clones in Yemen and Iraq, played a large and bloody role in maintaining Bashar Assad’s rule in Syria, and effectively taken over Lebanon. It currently has many thousands of rockets pointed at Israel.

In the 1980s, Hezbollah carried out a series of deadly bombings that included the killing of nearly 300 American soldiers and diplomats. In 1996, it bombed the Khobar Towers in Saudi Arabia, killing 19 American servicemen. It pioneered the terror tactics that Hamas and Fatah emulated during Yasser Arafat’s war of terror (euphemized as the “Al-Aqsa Intifada”), and that have also been employed by Al Qaeda and the Islamic State.

Running an organization dubbed by one US official the “A-team of terrorism” isn’t cheap. According to a 2018 US Treasury Department report, Hezbollah receives an estimated US$700 million annually from Iran and raises another US$300 million from a vast network of illegal businesses, many of which are tied up in the Latin American drug trade. The real figure is likely several times higher.

Since then, US sanctions and the vagaries of the oil market have apparently reduced Tehran’s ability to contribute, Hezbollah has been under pressure to raise its own funds through drug trafficking, money laundering and selling weapons to terrorist and jihadist groups. Meanwhile, Hezbollah members are spread across the world and well-integrated into the economic life of the countries where they live under various disguises. It is also learned, Hezbollah has been using Lebanese non-Muslims in some of its economic ventures in foreign nations, including the US.

For Hezbollah, Latin America is the most convenient because of its vast Lebanese diaspora, as Lebanese of all faiths have been migrating to South America since the 19th century. Paraguayan dictator Alfredo Stroessner, who ruled from 1954 to 1989, encouraged Lebanese to settle in Ciudad Presidente Stroessner (later renamed Ciudad del Este) in the hope that they would bring commerce and economic growth.

For decades, Hezbollah has been involved in drug trafficking and dealing in drugs. American law enforcement discovered Hezbollah’s drug activity by chance in 2006, when Colombian wiretaps monitoring a Medellin-based drug cartel known as the Oficina del Envigado picked up conversations in Arabic. The DEA brought in a translator who explained that Hezbollah was arranging multi-ton shipments of cocaine to the Middle East. In the ensuing investigation, codenamed Operation Titan (originally launched in 2004 to target the Oficina), the DEA opened a Pandora’s Box. This led to Project Cassandra, a decade-long operation launched in 2007 that sought to stop Hezbollah from trafficking drugs into the US and Europe.

Cassandra’s key finding was that Hezbollah’s shipments of cocaine were not a small sideshow by loosely affiliated individuals but a multibillion-dollar, worldwide operation orchestrated by top officials within Hezbollah’s inner circle.

The DEA revealed the full extent of Hezbollah’s terror-crime nexus and its centrality to Hezbollah’s organizational structure in February 2016, when Operation Cedar led to multiple arrests across Europe— including Mansour, the charcoal trader. By then, the DEA had been chasing Hezbollah money-laundering operations on behalf of drug cartels for nearly a decade. French raids led to the arrests of prominent Hezbollah facilitators Mohamad Noureddine and Hamdi Zaher El Dine. Four days after their arrests, the US Treasury Department sanctioned both of them.

Referring to the sanctioned duo, then-Acting Under Secretary for Terrorism and Financial Intelligence Adam J. Szubin said that Hezbollah relied on such facilitators “to launder criminal proceeds for use in terrorism and political destabilization.” In particular, this money was financing Hezbollah’s arms procurement to sustain its military engagement in Syria. Treasury stopped short of explicitly identifying the two as Hezbollah members, but said they were providing material support to Adham Tabaja, whom Treasury had sanctioned in 2015 as a leading Hezbollah member and financier.

The DEA’s February 2016 announcement also detailed the hierarchical structure overseeing Hezbollah’s illicit financial operations since as early as 2007. The DEA named it the BAC, an acronym for the Business Affairs Component of Hezbollah’s External Security Operation. It identified the BAC’s founder as the late Hezbollah arch-terrorist Imad Mughniyeh. After his death in a car bomb in Damascus in February 2008, the BAC’s leadership was bequeathed to Abdallah Safieddine, Hezbollah’s representative in Iran, and his right-hand man, Tabaja.

According to a former US official familiar with the case, the targeted ring involved shipments of cocaine to Europe, paid for in euros, which Hezbollah couriers then transferred to the Middle East. Hezbollah also made more than €20 million a month selling its own cocaine, in addition to laundering hundreds of millions of euros of cocaine proceeds on behalf of the cartels, retaining a fee.

A recent US case against a Hezbollah operative makes clear what Hezbollah has in mind and why the convergence of terror and organized crime is so toxic. In June 2017, US authorities announced the arrest of Samer El Debek just outside Detroit. According to court documents, Hezbollah trained him to handle ammonium nitrate and dispatched him to Thailand in 2009 to clean up a safe house filled with ice packs left behind after a thwarted attack. Hezbollah later sent El Debek to Panama to scout the Panama Canal, where an attack might have disrupted global shipping.

In 2015, British authorities caught Hezbollah-linked operatives stockpiling more than 6,000 pounds of explosives on the outskirts of London, news reports revealed in June of 2019. The British deserve praise for unearthing the London bomb factory. However, they did not dismantle the underlying commercial or financial structures that allowed the group to buy and stockpile such materials. In both cases, it appears that Hezbollah was trying to obtain ammonium nitrate through the gradual purchase of thousands of ice packs (which contain it), usually through the procurement of first-aid kits.

For the past few years, Hezbollah has been actively pushing forward its mission of acquiring ownership of hotels, motels, discos, nightclubs, bars, pubs and karaoke centers in a number of Asian nations, especially the Philippines. Only during this pandemic, Hezbollah funds have been entering the Philippines through Iranian nationals (we have come to know a particular case of an Australian-Iranian) who are buying dozens of tourist attraction facilities, nightclubs and bars in various parts of the Philippines. A portion of the profit accrued from these projects would be spent for funding Shi’ite terrorism in the country, mainly in Mindanao province. Under the garb of running businesses, Lebanese and Iranian individuals are gradually expanding Hezbollah and Iranian terror networks within the Philippines, which certainly will pose gravest threat to country’s security in the nearest future.

Almost similarly, Iranian and Lebanese nationals with direct affiliation with Hezbollah are acquiring various types of business establishments in Thailand, Indonesia, Malaysia, Maldives, South Korea, Japan, China, India, Pakistan and Bangladesh while they also are doing the same in several Middle Eastern nations, including Saudi Arabia. According to information, in addition to investing in tourist attraction projects and entertainment industry, Lebanese and Iranian nationals also are putting money into various types of industrial projects, including readymade garments, ceramic, pharmaceuticals and food processing projects. All of these projects would not only generate fund for Iran’s terror projects as well as for Hezbollah, it will also play key role in funding terrorism in the respective countries.

During the recent years, Iran has succeeded in forming a huge nexus between Hezbollah, Houthis, Hamas and Myanmar’s Arakan Rohingya Salvation Army (ARSA), Through its affiliation with ARSA, Lebanese Hezbollah has gained direct access to the multi-billion-dollar illegal trade in yaba pills (also known as captagon).

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An internationally acclaimed multi-award-winning anti-militancy journalist, research-scholar, counter-terrorism specialist, and editor of Blitz. Follow his on Twitter Salah_Shoaib

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