Archive for June, 2013

Lebanese Bank accused of terrorism financing

Wednesday, June 26th, 2013

A Lebanese bank accused of laundering drug money through United States banks and routing it to the terrorist group Hezbollah will pay USD 102 million to settle a lawsuit brought in 2011 by the US government.

The government of the United States accused the Lebanese Canadian Bank of a “widespread international scheme” to use the US banking system for laundering the proceeds from drug trafficking through West Africa and back to Lebanese financial institutions with ties to Hebollah.

Michele Leonhart, head of the Drug Enforcement Administration, said that drug trafficking profits and terror financing often grow and flow together.

Evan Barr, an attorney for the bank, said in a statement that the bank is pleased to have reached a settlement with the Government of the United States, ending months of legal dispute.

According to prosecutors, the bank transferred at least USD 329 million by wire to the USA to purchase used cars that were then shipped to West Africa. It was said in the court documents that the money from the sale of the cars and proceeds from drug trafficking were funneled to Lebanon through Hezbollah-controlled money laundering operations. So, the bank played a key role in these money laundering channels and conducted business with a number of Hezbollah-related entities.

The government of the USA considers Hezbollah a foreign terrorist organization and bars US businesses from doing business with the group. In 2011, the Treasury Department designated the bank a money launderer. The government said that the bank was used routinely by drug traffickers to launder money from Central and South America, Europe, Africa and the Middle East. A Lebanese branch of France’s Societe Generale bank acquired most of the bank’s assets after the Treasury designation. Another Lebanese money exchange, Hassan Ayash Exchange Company, forfeited USD 720 000 to the government of the United States last week in order to settle claims that it participated in the money laundering scheme.