The story sounds like the script of a big-screen blockbuster. The plot mixes terrorists, a major bank, and an international drug ring, and features an unexpected cameo by used car dealers. But U.S. authorities say the global conspiracy they've discovered is no movie, and that the all-too-real scheme helped fund Hezbollah.
The DEA and the Treasury Department announced Thursday that under provisions of the Patriot Act, the U.S. is barring American financial institutions from doing business with the Lebanese Canadian Bank (LCB). Treasury officials allege that the bank has been laundering narcotics proceeds -- as much as $200 million per month-- on behalf of an international drug ring run by a Lebanese trafficker named Ayman Joumaa. According to officials, a big slice of the drug profits were then funneled back to Hezbollah in Lebanon by Joumaa and nine coconspirators through an African affiliate of LCB.
Where do the used car dealers come in? They allegedly helped launder the money.
According to Treasury, cash from drug sales in Europe, Latin America and the Middle East was first laundered through money exchanges in Lebanon, then wired to U.S. car dealers via LCB. The dealers then shipped cars to West Africa, and the proceeds from the sales of the cars in Africa were sent via an LCB affiliate in The Gambia to Hezbollah in Lebanon. None of the American used car dealers allegedly involved in the transactions were identified.
Treasury officials also said that wire transfers from LCB were sent to U.S. correspondents to pay Asian suppliers of consumer goods. The goods were then shipped to Latin America and sold for local currency.
Under the Patriot Act, LCB has now been labeled a "financial institution of primary money-laundering concern." The U.S. government has designated Hezbollah a "Foreign Terrorist Organization."
"This action seeks to protect the U.S. financial system from the illicit proceeds flowing through LCB and to deprive this international narcotics trafficking and money laundering network of its preferred access point into the formal financial system," said Stuart Levey, the Treasury Department's under secretary for terrorism and financial Intelligence. "Any financial institution that collaborates in illicit conduct on this scale risks losing its access to the United States."
LCB is based in Beirut and maintains a network of 35 branches in Lebanon and a representative office in Montreal, Canada.
Ayman Joumaa and his alleged drug-trafficking and money laundering network have been on Drug Enforcement Administration's radar for some time. On January 26, Treasury designated Joumaa and 19 other associated individuals and entities as Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act.
Joumaa is believed to be in Lebanon, and no criminal charges have been filed in the U.S. against him or his alleged co-conspirators.