US authorities said Monday that they had seized $150 million from a Lebanese
bank suspected of being at the heart of Hezbollah’s international
money-laundering and narcotics trafficking schemes.
The announcement was
made by Preet Bharara, US attorney for the Southern District of New York, and
Michele M. Leonhart, administrator of the US Drug Enforcement
Administration.
Bharara said: “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.”
“We will use
every resource at our disposal [to seize terror and narco-traffickers funds],
even those hidden in foreign accounts,” said Bharra.
Leonhart said the
Lebanese Canadian Bank played a key role in facilitating money laundering for
Hezbollah-controlled organizations across the globe.” She added that the DEA’s
“relentless pursuit of global criminal networks” uncovered the exploitation of
the US banking system to launder drug trafficking funds through West Africa and
into Lebanon.
In February 2011, the US Department of the Treasury
designated the Lebanese Canadian Bank as a “primary money-laundering
concern.”
The privately owned bank subsequently merged with the Lebanese
subsidiary of Société Générale de Banque au Liban, a large European
bank.
In the complaint, federal prosecutors in New York City and the DEA
accused bank officials of knowingly participating in a scheme in which $329m.
was transferred between January 2007 and early 2011 from various individuals and
companies in Beirut to purchase used cars in the US.
The cars were then
sold in West Africa, and Hezbollah-linked groups would help smuggle the proceeds
into Lebanon, authorities said.
Washington considers Hezbollah to be a
terrorist group. US officials say that it has become increasingly involved in
the drug trade, facilitating the distribution and sale of cocaine in West
Africa.
In September 2011, Société Générale de Banque au Liban agreed to
purchase most of Lebanese Canadian Bank’s assets for $580m., and at least $150m.
in purchase funds related to that sale are being held in escrow in Lebanon at
the Banque Libano-Française SAL.
The money-laundering and forfeiture
complaint was filed in December 2011.
The seized funds are substitutes
for the money in the LCB escrow account at BLF, and came from an account at a US
bank that is used by BLF to conduct US currency transactions.
The funds
were seized using warrants issued on August 15, 2012.
Pursuant to US law,
the US can seize funds located in a bank’s correspondent accounts in the US if
there is probable cause that the bank is holding funds subject to forfeiture
overseas.
There are no allegations of wrongdoing against BLF, SGBL or the
US banks.
The seized money was held in corresponding accounts at five
different banks in the US, including Citibank and London-based bank Standard
Chartered.
The funds will be transferred to a seized assets account
maintained by the US Marshals Service until the forfeiture action is
resolved.
An attorney for the Lebanese Canadian Bank did not immediately
return a call from Reuters seeking comment.