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HSI investigation results in actions against international diamond/art organization for money laundering with ties to Hizballah

Money LaunderingHSI investigation results in actions against international diamond/art organization for money laundering with ties to Hizballah

WASHINGTON – The U.S. Department of Homeland Security and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), alongside partners with the U.S. Departments of Justice, Commerce, Treasury, and State announced today several international actions against Nazem Ahmad, an individual sanctioned by the United States under the Global Terrorism Sanctions Regulations (GTSR) for his involvement with the terrorist organization Hizballah, as well as against several other individuals involved in Ahmad’s global criminal organization, that utilized a web of businesses to benefit Ahmad and helped him to continue to provide Hizballah access to U.S. and international financial markets.

A nine-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Ahmad and eight co-defendants for conspiring to defraud the United States and foreign governments, evade U.S. sanctions and customs laws, and conduct money laundering transactions by securing goods and services for the benefit of Ahmad, a Lebanese resident and dual Belgian-Lebanese citizen who was sanctioned by the United States for being a financier for Hizballah, a foreign terrorist organization.

Despite being sanctioned and prohibited from engaging in transactions with U.S. persons since December 2019, Ahmad and his coconspirators relied on a complex web of business entities to obtain valuable artwork from U.S. artists and art galleries and to secure U.S.-based diamond-grading services all while hiding Ahmad’s involvement in and benefit from these activities. Approximately $160 million worth of artwork and diamond-grading services were transacted through the U.S. financial system. One defendant was arrested today in the United Kingdom, and the eight remaining defendants, including Ahmad, are believed to reside outside the United States and remain at large. The government obtained seizure warrants for millions of dollars in assets that include a diamond ring, cash in an account, and artwork.

“The international actions we are announcing today against Nazem Ahmad for his involvement with the terrorist organization Hizballah should serve as a reminder that the U.S. government and our allies will tirelessly prosecute those who are sanctioned for illicitly financing terrorist activities,” said Deputy Secretary of Homeland Security John K. Tien. “I am very proud to not only share the results of this investigation into the Ahmad criminal organization but also recognize the outstanding international and interagency collaboration that led to this moment.”

“This HSI investigation speaks to the unwavering commitment of the U.S. and U.K. governments to prevent art and diamond markets from becoming a haven of illicit financial activity,” said ICE Deputy Director and Senior Official Performing the Duties of the Director Tae D. Johnson. “I commend HSI and our investigative partners for their dedication in seeing this investigation through – over many years – to substantial actions. We will utilize every tool at our disposal to dismantle these illicit networks.”

“The United States implemented terrorism sanctions so that terrorist organizations like Hizballah would be cut off from the goods and services needed to fund violent acts of terrorism,” said U.S. Attorney Breon Peace for the Eastern District of New York. “As alleged, Nazem Ahmad and his co-defendants benefitted from the multi-million-dollar trade in diamonds and artwork even after Ahmad was sanctioned for his involvement with a terrorist organization. Our office will continue to prosecute individuals who evade these sanctions and thereby offer a lifeline to designated foreign terrorist organizations.”

In addition:

The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced additional and expanded sanctions against Ahmad’s network of individuals and entities responsible for facilitating the flow of money to Hizballah.
The U.S. Department of State announced that it was highlighting Nazem Ahmad under its existing Rewards for Justice reward offer for information on Hizballah’s financial mechanisms.
Law enforcement partners in the United Kingdom arrested an individual on U.S.-based charges arising out of that person’s involvement with Ahmad and his criminal network.
Regulatory partners in the United Kingdom announced sanctions against Ahmad and co-conspirators for their involvement in financing Hizballah.

“The funding of foreign terrorist organizations like Hizballah is illegal, regardless of whether that funding comes in the form of cash or the export of high-priced diamonds and art,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “We are proud to have partnered with DOJ and HSI to bring this significant enforcement action.”

“Hizballah relies on financing and facilitation networks like those of Nazem Ahmad, a prominent Hizballah money launderer, financier, diamond dealer, and art collector, to sustain operations and launch attacks globally. It earns almost one billion dollars annually through direct financial support from Iran, international businesses and investments, donor networks, corruption, and money laundering activities. Until Hizballah ceases to use terrorism and violence to achieve its goals, the United States will aggressively target the group’s terrorism leadership, infrastructure, and financial-support networks,” said U.S Department of State’s Deputy Assistant Secretary and Assistant Director of the Diplomatic Security Service for Threat Investigations and Analysis, Paul Houston. “That’s why the Department of State’s Rewards for Justice Program is highlighting a standing $10 million reward offer for information leading to the disruption of the financial mechanisms of Hizballah and specifically seeking information on the financial network of Nazem Ahmad.”

Forty years ago, on April 18, 1983, Hizballah coordinated an attack on the U.S. Embassy in Beirut, Lebanon, killing 63 people, including 17 American citizens. No American diplomatic post had ever faced such a deadly attack. Hizballah’s attack that day was the beginning of a cascade of terror. Six months later, on Oct. 23, 1983, an attack on U.S. and French military personnel left more than 300 dead. And, in September 1984, an attack on the U.S. Embassy annex in East Beirut killed dozens more, including two U.S. military members.

Nazem Ahmad, an individual involved in real estate development, the international trade of diamonds and the international sale and acquisition of artwork, is also a long-time associate of high-level members of Hizballah, many of whom themselves have been sanctioned by the United States. On or about Dec. 13, 2019, OFAC designated AHMAD as a Specially Designated National (SDN) for his material support of and provision of goods and services to Hizballah. Among other things, OFAC noted that “As of late 2016, Ahmad was considered a major Hizballah financial donor who laundered money through his companies for Hizballah and provided funds personally to Hizballah Secretary-General Hassan Nasrallah (Nasrallah).”

Ahmad leveraged a global network of businesses, bank accounts, trained accountants, and corrupt patronage systems to illicitly procure high-value goods, sell them for profit, and ultimately launder proceeds, to benefit Ahmad’s lavish lifestyle and in blatant violation of the sanctions imposed against Ahmad for his role as a Hizballah financier. He also orchestrated customs fraud, tax evasion, and smuggling of goods.

After Ahmad was sanctioned, entities controlled by or operating for the benefit of Ahmad were responsible for importing more than $207 million of goods into the United States and exporting more than $234 million of goods from the United States between about December 2019 and December 2022, consisting primarily of diamonds and artwork. Ahmad and his co-conspirators also engaged in approximately $160 million worth of transactions that involved the U.S. financial system. More than $6 million of the proceeds of this criminal scheme were transferred to Lebanon for use by Ahmad and his associates during this time frame.

This investigation was a collaboration between HSI Cedar Rapids, New York, Cultural Property Art and Antiquities Program and Trade Transparency Unit, which was made possible through support from HSI Chicago, Dallas, Houston, Kansas City, Los Angeles, Raleigh, St. Paul, and Santa Rosa. HSI Attaché offices in Africa, Asia, Europe, and the Middle East played critical roles in the investigation. The Department of Commerce, Bureau of Industry and Security and U.S. Customs and Border Protection were also key investigative partners.

HSI is the principal investigative arm of DHS, responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of more than 8,700 employees consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.

Story from www.ice.gov

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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