The US Drug Enforcement Administration (DEA) says it has uncovered a complex money laundering network operated by Hezbollah that employs, amongst many other systems, trade-based money laundering (TBML).

The DEA has said it has engaged in “significant enforcement activity including arrests” with the operations of Hezbollah, which is designated by the US as a terrorist organisation.

TBML scheme

Investigators have targeted Lebanese Hezbollah’s External Security Organisation Business Affairs Component (BAC), which they say is involved in international criminal activities such as drug trafficking and drug proceed money laundering.

The DEA reckons Hezbollah BAC launders significant drug proceeds as part of a TBML scheme known as the Black Market Peso Exchange.

Methodology

This usually involves brokers contacting importers in the country receiving the money who want to buy goods from, for example, a US business.

Drug dollars earned in the US are used to pay the exporter on behalf of the foreign importer. The importer pays the broker in local currency. The broker takes a cut and then pays the remainder to the drug cartel.

Ongoing investigation

According to the DEA, the proceeds of this as well as other methods of money laundering are used to purchase weapons for Hezbollah for its activities in Syria.

This is an ongoing investigation spanning the globe and involves numerous international law enforcement agencies in seven countries, including DEA country offices in Europe and Colombia as well as EUROPOL and EUROJUST.

Categories: Trade Based Financial crimes News