Two Lebanese currency traders deny U.S. charges of criminal links

Two firms designated by the U.S. Treasury for their alleged roles in an international drug trafficking and money laundering ring denied Thursday involvement in illegal activities.

The U.S. government took the decision Wednesday to label Ayman Joumaa, as well as nine people and 19 companies connected with him as Specially Designated Narcotics Traffickers in a racket which reportedly netted as much as $200 million a month.

Two Lebanese currency traders, Hassan Ayash Exchange and Elissa Exchange, which were both named in the Treasury’s designation, denied knowledge of Joumaa’s activities.

“We are terribly shocked by this news. I don’t know how our company’s name got involved in this work and the reports,” Iman Kharoubi, of Elissa Exchange, told The Daily Star.

“We work in Lebanon [and The Democratic Republic of] Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don’t have anything to do with him.”

Hassan Ayash, the owner of the exchange firm, denied any wrongdoing, but did admit to knowing Joumaa, who the U.S. designated under the Kingpin Act and will now struggle to access international financial transactions.

“For us it was a surprise today to hear about this story,” Ayash told The Daily Star. “We have no knowledge of where Ayman Joumaa is currently and we have no contact with him. But we know him in person.”

Beirut’s Caesar’s Park Hotel was also designated by the Treasury after it was alleged Joumaa, the manager and CEO, “uses [the hotel] as a location to broker drug trafficking and money laundering activities.” The hotel declined to comment on the accusation.

Both exchange companies have contacted Lebanon’s Central Bank for advice following financial sanctions, but Ayash was not unduly worried about the potential negative effect U.S. punitive measures could have on business.

“Actually there would be no consequences whatsoever on our work, since our work is transparent and we work with several banks in the U.S.,” he said.

Kharoubi was less optimistic. “Our transactions are clear and transparent, but our work would be terribly affected,” he said. “Our transactions go through several U.S. banks and car companies all over the United States. Under U.S. government supervision, our products and cargos are monitored within the United States.”

Washington has said it would reconsider its financial support for Lebanese institutions if a cabinet blessed by Hezbollah is formed by Prime Minister-designate Najib Mikati.

Both firms said the financial measures taken against them were unlikely to be linked to cabinet uncertainty.

“We are not affiliated with any party in the country. I do not think that this is related to regional politics,” Kharoubi said.

“It is too early yet, since the news just came in, to actually know if there are any political and economic indications in the American reports,” Ayash added. “We cannot say whether this action is related to the recent developments in Lebanon.”

The United States has already blacklisted several Lebanese companies for their suspected links to Hezbollah. – Additional reporting by Van Megeurditchian

Source: The Daily Star

U.S. targets Lebanon-based drug smuggling network

The U.S. Treasury Department said on Wednesday it was targeting a Lebanon-based drug trafficking and money laundering network suspected of doing as much as $200 million a month in business.

The Treasury's Office of Foreign Assets Control said it was labeling Ayman Joumaa, as well as nine people and 19 entities connected with his organization, as Specially Designated Narcotics Traffickers.

The action means U.S. citizens are prohibited from any commercial or financial dealings with the people or entities and that any of their assets found in the United States can be seized.

The Treasury said Joumaa coordinated the transportation, distribution and sale of shipments of cocaine from South America, laundering the money in Europe and the Middle East.

It said the group operated in Lebanon, West Africa, Panama and Colombia and had laundered as much as $200 million per month through various channels.

The Treasury's action was taken under the so-called Kingpin Act that aims to disrupt foreign narcotics traffickers by preventing them from gaining access to the international financial system. (Reporting by Glenn Somerville; Editing by John O'Callaghan)

Source: Reuters

U.S. Rules Bar Banks That Violate Iran Sanctions

The Treasury Department released new regulations on Friday that could bar foreign banks or companies from accessing the financial system in the United States if they did business with entities or people subject to United Nations and United States sanctions.

The regulations, which grew out of legislation Congress passed in June, effectively bar foreign banks from doing business in dollars if they engage in transactions with anyone suspected of involvement in Iran’s nuclear or missile programs. The entities include Iran’s Revolutionary Guards.

The regulations were released just months after the passage of new sanctions on Iran by the United Nations Security Council and the European Union. The European Union sanctions include additional measures aimed at Iranian banks and insurance companies and the Iranian transport sector. Administration officials have said they believe that the sanctions have already started to have an effect.

The Treasury regulations prohibit or impose strict conditions on the use of American bank accounts by any institution that engages in activities associated with Iran’s nuclear and missile programs.

Those activities include aiding the Iranian government’s efforts to obtain weapons of mass destruction or to support terrorism, aiding the activities of people already subject to United Nations sanctions and providing any financial assistance to Iran’s Revolutionary Guards or their affiliates. A final provision is aimed at banks or companies that engage in money laundering or assist any Iranian financial institution — including the Central Bank of Iran — in the activities cited.

Earlier sanctions focused on some of those activities, but violators were subject mostly to fines. The threat of being cut off from the United States economy adds a significant dimension, said Stuart A. Levey, the under secretary of the Treasury for terrorism and financial intelligence, in a briefing for reporters on the regulations.

Mr. Levey planned to leave Friday on a trip to the United Arab Emirates, Lebanon and other Middle Eastern countries to explain the regulations to officials of government and financial institutions.

“It would not be in our interest to act without warning,” he said. “We’re more interested in changing behavior than in ‘getting’ somebody.”

by: By ROBERT F. WORTH

Source: The NY Times

Lebanese bank denies U.S. charge of money laundering

A Lebanese bank has denied accusations by the U.S. Treasury Department that it is involved in laundering hundreds of millions of dollars on behalf of a drug kingpin -- and rejected claims it has links with Hezbollah, the Lebanon-based militia.

On Thursday the Treasury described the Lebanese Canadian Bank in Beirut as a "financial institution of primary money laundering concern." The Treasury said it had reason to believe that managers at the bank were complicit in money laundering by Ayman Joumaa, an alleged trafficker accused by U.S. authorities of shipping drugs from South America to Europe and the Middle East through west Africa.

The Treasury also said its action in designating the Lebanese Canadian Bank (LCB) exposed links between the bank and Hezbollah -- which is listed as a terrorist organization by the United States. Designation means that U.S. persons are prohibited from conducting financial or commercial transactions with individuals listed, whose assets under U.S. jurisdiction are frozen.

U.S. Under Secretary for Terrorism and Financial Intelligence Stuart Levey said: "Any financial institution that collaborates in illicit conduct on this scale risks losing its access to the United States."

The bank's chairman, Georges Zard Abou Jaoude, told CNN Friday that the bank had no relationship whatsoever with Hezbollah nor to the best of its knowledge with anyone designated by the U.S. Treasury Department. Jaoude said the bank had identified an account in Joumaa's name but it had not been used in four years. It had notified Lebanese regulators about the account, and the bank's books had been regularly inspected by the Special Investigation Commission, a Lebanese task force set up to counter money laundering.

The Treasury said Joumaa's network "launders hundreds of millions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering involving consumer goods throughout the world." In its statement issued Thursday, the Treasury estimated that as much as $200 million was being laundered on a monthly basis. "At least one of the individuals involved in this global drug trafficking and money laundering network has worked directly with LCB managers to conduct his transactions," the Treasury said.

The U.S. Drug Enforcement Administration, which was also involved in the investigation, said: "The Lebanese Canadian Bank for years has participated in a sophisticated money laundering scheme involving used cars purchased in the United States and consumer goods overseas."

The Treasury said the bank's links to Hezbollah included a subsidiary in Gambia called Prime Bank, formed in 2009, which it said was "partially owned by a Lebanese individual known to be a supporter of Hezbollah. "

Jaoude told CNN the bank rigorously adhered to all blacklists published by financial authorities around the world. He said the bank had not been contacted in advance by the U.S. Treasury's Office of Foreign Assets Control before Thursday's announcement and he was urgently trying to contact U.S. authorities. "All our books are open to the American Treasury," Jaoude said. "We have to clear our name," he said.

In its most recent annual report, the bank said "it is fighting money laundering by complying with international and [Lebanese] Central Bank circulars."

The Lebanese Canadian bank has 35 branches in Lebanon, as well as its subsidiary in Gambia and an office in Canada. The bank has grown quickly in recent years, from assets of $2.83 billion in 2005 to $5.18 billion in 2009.

Ayman Joumaa was designated in January -- along with nine individuals and 19 entities connected to his drug trafficking and money laundering. A Treasury statement said he "coordinated the transportation, distribution, and sale of multi-ton shipments of cocaine from South America and has laundered the proceeds from the sale of cocaine in Europe and the Middle East, according to investigations led by the Drug Enforcement Administration." Joumaa's whereabouts are unknown. He is believed to hold Lebanese and Colombian passports.

One of the entities designated along with Joumaa was a company that runs a used car business in Benin and Congo out of southern Lebanon. Its manager, Iman Kharoubi, told Lebanon's Daily Star last month: "We work in Lebanon and Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don't have anything to do with him." CNN's attempts to reach Kharoubi were unsuccessful.

For several years, U.S. authorities have alleged that Hezbollah is profiting from drug trafficking from South America to Europe via west Africa. In June 2008, the U.S. Treasury Department designated two Venezuelans of Lebanese descent as Hezbollah financiers and supporters.

Source: CNN

FBI agents in town help fight cross-border crime

By Marie Magleby, Special to Gulf News

Published: May 31, 2008, 23:44

Abu Dhabi: Gary Price and Ernest Herbert carry FBI badges, but their job descriptions are significantly different here than in the US.

"I have no law enforcement authority here," Special Agent Price said.

Instead, the duo are go-betweens for local and US law enforcement. He said, "We work closely with UAE government officials to share information that protects the two countries."

They also offer training at the request of local authorities. The training involves many aspects of law enforcement, including ways to combat white-collar crime, violent crime, forensics and counter-terrorism.

In addition, the agents coordinate the Middle East Law Enforcement Training Centre in Dubai, which offers week-long courses for law enforcement personnel from around the Gulf.

Local authorities choose the topics and dates, and FBI specialists come from the US to teach the courses. Since its establishment in 2001, the centre, co-sponsored by the FBI and Dubai police, has conducted about 40 courses dealing with money laundering, computer crimes, intellectual property rights, kidnapping, auto theft, homicide, financial institution fraud, terrorist financing, hostage negotiations and more.

The globalisation of crime, especially financial and internet crime, places the agents in a pivotal position. "The UAE is an important crossroads for business and, as a result, also for crime," Price said of the potential for fraud or abuse in the banking system. With the help of local officials, they routinely seek to investigate bank records and track financial transactions linked to the US.

When internet crime is traced back to the US, the agents are also able to help. Just months ago, a prominent UAE citizen received a cyber threat from a location in the US.

Local law enforcement officials contacted Price and Herbert, who enlisted agents in the US to conduct an investigation. The man was arrested, charged and is now facing imprisonment.

About working with local authorities, Price said: "I truly enjoy working with the Emiratis. They are professional and very gracious." There are, however, obstacles. According to Price, a federal law that regulates "international judicial cooperation" is often misinterpreted to be a roadblock to investigations. "There is not a timely, quick way for law enforcement response because of the bureaucratic process," he said.

Law enforcement mechanisms do not always translate across cultures and borders, Herbert said in a similar vein. "Things are run differently here than in the US, so we have to do things differently."

When FBI agents are on international assignment, they assume the title of Legal Attaché in their respective embassies. Price and Herbert are successors to three other agents since the Abu Dhabi office opened in December 2003. They cover both the UAE and Oman. In the region, the FBI also has agents posted in Afghanistan, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Pakistan, Saudi Arabia and Yemen.

During his tenure, former FBI director Louis Freeh pushed to expand the bureau's international presence. It now has offices in 62 countries. This worldwide network of agents is a necessary countermeasure against the growing nexus of international crime. "Just as there are no borders for crime and terrorism, there can be no borders for justice and the rule of law," current director Robert Mueller told the US Senate in March.

Progress

"Twenty years ago, the idea of regularly communicating with our law enforcement counterparts around the world was as foreign as the internet or the mobile phone. Today, advances in technology, travel and communication have broken down walls between countries, continents and individuals," Mueller added. Price and Herbert embody this prog-ress.

Mueller became the dir-ector one week prior to the September 11, 2001 attacks.

The FBI began as a special agent force in 1908 and received its current title in 1935. Since its genesis, the FBI has seen its share of success and failure. Though it has successfully foiled numerous plots, conspiracies and espionage attempts, it has been criticised for shoddy investigation tactics and ignoring intelligence reports that could have prevented past attacks. Regardless, it has survived a century of challenges.

- The writer is a journalist based in Abu Dhabi.

Source: GulfNews

Bank of China: Terror allegations 'unfounded'

By Lydia Chen

Bank of China today dismissed allegations that it helped terrorist groups by transferring millions of dollars and said the accusations are "sheer nonsense" and are "completely unfounded."

The bank has always "strictly" adhered to regulations regarding international money laundering and terrorism financing. Its internal rules also forbid providing any services to terrorist groups, Wang Zhaowen, a spokesman for the country's third largest lender said, Xinhua news agency reported.

Kent Henderson, who represents more than 100 Israelis, has alleged in a complaint filed on August 22 in the Los Angeles Superior Court, that from 2003, Bank of China conducted dozens of wire transfers worth several million dollars to Hamas and Islamic Jihad through branches in the United States, the Associated Press reported.

The banking services "caused, enabled and facilitated the terrorist attacks in which the plaintiffs and their decedents were harmed and killed," Henderson wrote in the complaint, which seeks unspecified damages.

Wang said the bank will clarify its position through legal process and reserves the right to file lawsuits or take other legal action.

"We trust that the US court will reach a fair verdict based on the facts," Wang said.

The Shurat HaDin Israel Law Center, which is backing the suit against Bank of China, began suing banks on behalf of victims of terrorism in May. It accused the financial institutions, including UBS AG, of providing financial services that ended up helping terrorist groups. Last month, five Lebanese banks were sued in the US and Canada.

Source: Shangai Daily

EU to tighten screw on Tehran bank

By Daniel Dombey in Washington, Financial Times, 15 May 2008

Bank Melli, Iran's biggest commercial bank, is set to be banned from operating in the European Union under proposals in the final stages of discussion in Brussels.

At present, the bank operates branches in the City of London, France and Germany, so blunting American calls for other jurisdictions to break off ties with Iranian institutions, particularly in the Gulf.

"It is important for the EU to come to agreement on stepping up financial pressure on Iranian banks as a means of demonstrating to the Iranian regime how seriously we take their nuclear proliferation," said a European diplomat.

But the time and effort it has taken to get agreement on the move, which comes after a year-long push by the US and its allies, highlight the problems Washington may face in its quest to win international support for tougher sanctions and so convince Tehran to rein in its nuclear programme.

"Many people around the world are looking to Europe on this issue," Stuart Levey, US treasury undersecretary, told the FT. "What Europe does is quite important."

The US effort dates back to last summer, when negotiations began on a UN Security Council resolution that Washington and its allies wanted to prevent Melli and another Iranian bank, Bank Saderat, from doing business internationally.

In October, the Bush administration intensified its effort with unilateral sanctions against a number of Iranian institutions – including both Melli and Saderat – measures that Washington pushed other jurisdictions to emulate.

"We call on responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat [another Iranian bank], Bank Saderat, and all companies and entities of [Iran's] Islamic Revolutionary Guards Corps," Hank Paulson, treasury secretary, said on that occasion.

However, Washington found itself caught in a "catch-22" when it pushed the UK, its closest ally, to close Melli and Saderat's operations in London. Britain said it could act only as part of a general EU decision and, within the EU, countries such as Germany, Austria, Spain and Italy called for a UN decision before they would proceed.

Seeking to break the impasse, the US, Britain and France finally won agreement on a UN Security Council resolution in March that merely called on member states to exercise "vigilance" over Iranian banks, especially Bank Melli and Bank Saderat, due to what it said was their link to proliferation and Iran's nuclear programme.

"It's pretty clear that the US had hoped that this would happen more quickly and perhaps be a little bit more robust," said Mr Levey.

Diplomats said the UN resolution was designed to "open the door" to an outright EU ban on the banks' subsidiaries in Europe. However, the EU has been reluctant to take action against Bank Saderat, which is principally faulted by the US for funnelling funds to Hizbollah, the Lebanese Shia movement. The Islamist organisation is not on the EU's list of proscribed terrorist organisations.

Throughout the past year, Iran has continued to expand its nuclear programme, announcing plans last month to install 6,000 new centrifuges to enrich uranium – although many western diplomats and analysts question their efficiency.

While Iran insists its programme is purely peaceful, the US and its allies accuse it of seeking to develop nuclear weapons.

US diplomats add that at present they are reluctant to embark on an attempt to pass another UN Security Council resolution because of the risk that it will provide meagre returns while highlighting differences with Russia and China, which are sceptical about further sanctions.

But Mr Levey said the financial sanctions, international warnings about the risk of money laundering and terror-financing in Iran, and related moves by international banks to scale down business with Tehran had had a big impact.

"It certainly has made the cost of financing [in Iran] to the extent that anyone has offered it at all, much more expensive," he said.

http://money.ninemsn.com.au/article.aspx?id=563862

Analysts: al-Qaida awash in funds despite meltdown

The meltdown in the global financial system may spare al-Qaida.

Buoyed by years of record oil revenues in the Gulf and Afghanistan's booming drug trade, al-Qaida and other Islamic terrorist groups are thought to have access to strong potential funding sources — and thus might dodge fallout from the global crunch devastating others.

Yet all is not lost in the effort to rein in money for terror groups. One principal reason the groups may avoid fallout now is because they've been forced to pull away from banks, relying instead on less-efficient ways to move money.

Those methods — including hand-carrying money and using informal money-transfer networks called hawalas — likely will shield extremists from the current banking system turmoil.

But the methods also are slower and less efficient ways to move money — and thus could hamper efforts to finance attacks, analysts say.

"It would be inconceivable that large amounts of (terror-linked) money would transit through the formal financial system, because of all the controls," said Ibrahim Warde, an expert on terrorist financing at The Fletcher School at Tufts University.

The question of where al-Qaida and sympathizers get their money has long been crucial to efforts to prevent terror attacks. A 2004 U.S. investigation found that banks in the United Arab Emirates had unwittingly handled most of the $400,000 spent on the Sept. 11 attacks.

After the attacks, the U.S. made an aggressive push to use law enforcement techniques to disrupt terrorist financing networks and worked with allies to improve their own financial and regulatory institutions.

Despite those efforts, wealthy donors and Islamic charities in the oil-rich Gulf, especially in Saudi Arabia, continue to be "one of the most significant sources of illicit financing for terrorism," said Matthew Levitt, a former U.S. Treasury Department terrorism expert now with The Washington Institute for Near East Policy.

The Saudis have long insisted they are doing all they can to rein in terror financing, and U.S. officials have praised their efforts.

But, under a system known as zakat, wealthy Muslims are required to give a portion of their money to the poor. Much of that is given to Islamic charities, and U.S. officials say at least some of the charities money continues to be channeled to al-Qaida and other terror groups.

Saudi Arabia and other Gulf countries have benefited over the last two years from a surge in oil prices from about US$60 per barrel at the beginning of 2007 to more than US$145 per barrel in the middle of this year.

Oil prices have fallen almost 50 percent in the last few months in response to the global financial crisis, but not before the run-up generated hundreds of billions of dollars.

Levitt said the covert nature of terrorist financing makes it difficult to determine a direct correlation between rising oil revenues over the last few years and the amount of cash al-Qaida has on hand.

But "it stands to reason that if there is more oil revenue, there will be more revenue for all kinds of things licit and illicit," he said.

Al-Qaida and the Taliban have also benefited from the drug trade's growth in Afghanistan after the U.S.-led invasion in 2001 — a booming business that likely won't be affected by the global slowdown.

Opium cultivation has fallen slightly this year but is still about 20 times higher than in 2001, according to the U.N. Office on Drugs and Crime.

Former U.S. drug czar Gen. Barry McCaffrey, who now works with NATO, issued a report on Afghanistan in July saying al-Qaida and the Taliban "are principally funded by what some estimate as $800 million dollars a year derived from the huge $4 billion annual illegal production and export of opium/heroin and cannabis."

Al-Qaida and other extremist groups have gloated in recent weeks about the West's financial woes, painting the crisis as either divine punishment for supposed wrongs or the last gasps of a dying empire.

An American al-Qaida member, Adam Gadahn, said in a video released this month that "the enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing."

Members of the militant Palestinian group Hamas and hard-liners in Iran also cheered the economic turmoil.

Iran is thought to be the last major government supporter of terror groups. The majority Shiite country is not believed to finance al-Qaida, a Sunni group, but does support the militant Hezbollah faction in Lebanon, which engaged in war with Israel in 2006.

Iran denies the financial crisis is hurting its economy, but falling oil prices will cut into its crude sales, which make up 80 percent of the government budget. It is unclear how that will affect support to Hezbollah.

Despite the apparent glut in potential money for terror groups, Levitt believes anti-terrorism efforts have hampered the groups' ability to transfer money where they want.

Levitt points to several messages from senior al-Qaida leaders in Pakistan and Afghanistan intercepted by the U.S. or released by the terrorist group itself, asking Gulf supporters for more help because of funding shortfalls. Most recently, the al-Qaida leader in Afghanistan, Mustafa Abu al-Yazid, appeared in a May 2007 video saying "the mujahideen of the Taliban number in the thousands, but they lack funds."

But Warde and other analysts are not convinced al-Qaida is really hurting.

"Anybody who is involved in fundraising of any sort is never going to say we have enough money, so I think it is a silly argument to say that because there is this intercept ... it is proof that everything we've done has succeeded brilliantly," said Warde.

Source: Ohio.com

US workshop in Jordan builds support to battle money laundering

The U.S. government organized a workshop in Jordan to teach officials from the Arab countries how to detect and investigate the smuggling of money.

The U.S. has been working with Jordan and other Arab countries to ensure that banking institutions are subject to appropriate oversight and that they have effective programs in place to prevent money-laundering and terrorist financing.

Participants, including representatives from Jordan, Algeria, Egypt, Kuwait, Lebanon, Mauritania, Morocco, Oman, the Palestinian Authority, Qatar, Tunisia and Yemen, examined anti-money laundering standards used by the Financial Action Task Force, a Paris-based inter-government body set up in 1989 by the Group of Eight industrialized nations.

This week, U.S. federal prosecutors said two NY residents were indicted on charges of trying to smuggle $500,000 (euro323,000) from the U.S. to Jordan.

Authorities said a grand jury in Hartford, Connecticut returned an indictment charging 35-year-old Hassan Abuzaitoun and 33-year-old Mohammad Alazzam with conspiracy to commit money laundering and conspiracy to smuggle bulk cash from the United States. Both are naturalized U.S. citizens from Jordan residing in Yonkers, New York.

Jordanian authorities have often asserted that Jordan was free of money laundering because of its strict monetary regulations and practices.

In 2004, three different groups of families of suicide bombing victims in Israel filed suits in a Brooklyn, N.Y. federal court against Jordan's largest financial institution _ Arab Bank _ alleging that it moved donations from Saudi Arabia to militant Palestinian groups, including Hamas and Islamic Jihad.

The bank denied the allegation. It later decided to close down its New York branch saying it was pursuing its strategy to focus on operations in the Arab world and Europe.

http://www.amlosphere.com/america/legislation/us-workshop-in-jordan-builds-support-to-battle-money-laundering.html