FBI: Cigarette-Smugglers Funded Terrorism

July 22, 2000 -- An Islamic militant group is denying any involvement in a scheme that the FBI says raised money for terrorism activities worldwide through cigarette trafficking in the United States.

Federal authorities arrested 17 people Friday during afternoon raids in homes and businesses in Charlotte, N.C., who they say are part of the Middle East guerrilla group Hezbollah. Another person was arrested in Michigan.

The suspects were charged with immigration violations, weapons offenses, money laundering and cigarette trafficking, said U.S. Attorney Mark Calloway in Charlotte.

Eleven of those arrested remained jailed today. The otherswere released on bond after court hearings on Friday.

MohamadYoussef Hammoud, one of those arrested in the raids, was identified asthe group’s ringleader by sources working with a state-federal taskforce that investigated the group, according to an affidavit.

A source told agents that Hammoud was well-connected with Hezbollahmembers in Lebanon and is believed to have receivedHezbollah-sponsored military training.

The source “believes that if Hezbollah issued an authorizationto execute a terrorist act in the United States, Mohamad Hammoudwould not hesitate in carrying it out,” the affidavit read.

But in a statement released today, Hezbollah denied anyinvolvement with the people charged in Charlotte.

It was unclear whether Hammoud or any of his co-defendants hadan attorney who could comment on the case.

Quiet Neighbors

No one answered the door Friday evening at Hammoud’s gray-bluehouse in Charlotte, where evidence of the morning’s raid was apparent: dents in the front door and damaged aluminum louvers in a front window.

Those who lived nearby said they knew little about its occupants,but did notice periodic gatherings and what appeared to be aconstantly changing set of residents.

“Other than all the meetings, where there’d be 15, 20 carsparked in front of the house, and the fact that there was arevolving door, they didn’t bother anybody,” said Paul Booher, wholives two houses down.

Booher said the only time he spoke to anyone at the house waswhen he knocked on the door and asked if they’d like to join thelocal homeowners’ association. The man who answered said he’d haveto talk to the landlord.

“They wouldn’t let anyone get to know them,” Booher said.

The investigation began in 1996 when Iredell County authoritiesnoticed people with out-of-state license plates making large cashpurchases from JR Tobacco, a discount tobacco outlet inStatesville.

More Arrests To Come

The arrests came after a three-year investigation called “Operation Smokescreen.”

Police and federal agents began searching homes in and around Charlotte Friday morning. In Michigan, Bassam YoussefHammoud, 33, of Dearborn, was being held in a jail in Detroit, a jail officer said.

According to federal agents, a van load of cigarettes smuggled out of the Carolinas to states where higher taxes are assessed could yield $8,000-$10,000 per trip.

The investigation, carried out in coordination with Canadian intelligence services, involved confidential sources who infiltrated the group, authorities said.

One source told federal agents that the group met weekly at the home of Mohamad Hammoud, or other members, to discuss Hezbollah activities and to listen to speeches of leaders.

One confidential source told federal agents he was present when Mohamad Hammoud “put aside for Hezbollah several thousand dollars in cash representing the proceeds from trafficking in contraband cigarettes. The funds to be sent to Hezbollah also consisted of donations solicited and collected by Mohamad Hammoud from individuals who support Hezbollah.”

Canadian agents advised counterparts in the United Statesthat one member of the group was under orders from a Hezbollahmember in Lebanon to obtain night-vision devices, surveyingequipment, global positioning systems, computers and video anddigital equipment to send to Lebanon.

Hezbollah is one of theworld’s most dangerous terrorist organizations, according todocuments filed Friday in federal court.

Described as a “designated foreign terrorist organization” by U.S. authorities, the Syrian- and Iranian-backed Hezbollah led the battle against the 22-year Israeli occupation of southern Lebanon. The Israeli army withdrew from southern Lebanon in May.

An Arsenal of Weapons

One of the defendants, identified as Ahmad Ali Hariri, alongwith his four brothers, maintained “a virtual arsenal ofweapons,” including shotguns, rifles, and an AK-47, authorities said.

One of the suspects, identified as Ali Fayez Darwich, has abrother in Lebanon, identified only as Mohamad, who is awell-known Hezbollah leader, according to federal agents.

A court affidavit alleged a government official at the U.S.embassy in Cyprus had been bribed to issue visas to the United States forsome members of the group.

“[One confidential source] advised that the group ofindividuals is extremely anti-United States. Their meetingsinvariably include readings from the works of [the late Iranianleader] Ayatollah Khomeini,” the affidavit said.

The Associated Press and Reuters contributed to this report.

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