Saturday, December 1, 2012

Funds Allegedly Linked to Hezbollah Seized

Funds Allegedly Linked to Hezbollah Seized

U.S. officials seized $150 million from the New York account of a Lebanese bank in connection with a scheme they say laundered hundreds of millions of dollars of illicit funds linked to the Lebanese militant group Hezbollah through American banks.
The action highlights the growing tensions between Washington and Beirut, as the Obama administration seeks to more aggressively dry up the funds of Hezbollah, which the U.S. considers a terrorist group, and its principal backers, Iran and Syria.
U.S. officials charge Lebanon's government, which includes Hezbollah members, with dragging its feet in policing the group's alleged role in international narcotics trafficking and terrorism.
Monday's seizure follows a civil lawsuit filed last year by federal prosecutors in Manhattan alleging that Beirut's Lebanese Canadian Bank, or LCB, and two Lebanese exchange houses aided Hezbollah and a broader narcotics network in moving funds through the U.S. The prosecutors are seeking more than $483 million in damages.
The U.S. Treasury last year accused the LCB of money laundering, precipitating the takeover of the bank by Beirut officials and its eventual sale to a Lebanese bank, Société Générale de Banque au Liban, which paid for part of LCB through an escrow account in Lebanon's Banque Libano Francaise SAL, or BLF.
U.S. officials said they seized $150 million from BLF's U.S. account to partly account for the damages it sought, though they didn't charge either lender of wrongdoing.
"Money is the lifeblood of terrorist and narcotics organizations, and while banks which launder money for terrorists and narco-traffickers may be located abroad, today's announcement demonstrates that those banks and their assets are not beyond our reach," said Preet Bharara, the U.S. attorney in Manhattan.
The Obama administration has increasingly voiced concerns that Lebanon's financial system is growing into a major international financial center, particularly after Hezbollah helped topple the pro-Western government in Beirut last year. U.S. officials also worry that Iran and Syria have been seeking to utilize Lebanese banks as a conduit for evading international sanctions.
U.S. officials investigating the LCB case said they have specifically raised their concerns about the pace of Beirut's cooperation with Lebanese Central Bank Governor Riad Salameh in investigating the case.
These U.S. officials said many of the suspected Hezbollah accounts held by the LCB still haven't been accounted for in the Lebanese banking system. They also said they seized the money in New York because they weren't confident of getting support from Lebanon in reclaiming any funds.
"The accounts that were in Lebanon, we didn't have a lot of faith that we'd get tangible cooperation," said a senior U.S. Drug Enforcement Agency official involved in the case.
The Lebanese Embassy in Washington couldn't be reached Monday. Mr. Salameh has said his office is closely cooperating with U.S. authorities. A lawyer for LCB declined to comment Monday. Hezbollah has denied any role in international narcotics smuggling and money laundering. The same money-laundering network also was used to conceal and funnel hundreds of millions of dollars in narcotics proceeds from West Africa back to Lebanon, the complaint said.
LCB was identified by the Treasury Department's Financial Crimes Enforcement Network as a "financial institution of primary money-laundering concern," which prevented the bank from sending money to the U.S. and caused all U.S. banks to end their relationships with LCB following the designation in February 2011.
In its civil complaint last year, the U.S. Department of Justice alleged that at least $329 million was transferred by LCB and other Lebanese financial institutions between January 2007 and early 2011 in order to buy used cars, which were then shipped to West Africa to be sold.
A significant portion of the cash was then sent to Lebanon via a Hezbollah-controlled money-laundering network, according to the complaint. As a result, substantial amounts of cash were paid to Hezbollah, U.S. authorities said.

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