The US treasury department’s Office of Foreign Assets Control (OFAC) has designated three Paraguayan individuals and five associated entities to the Specially Designated Nationals (SDNs) list. Their assets in US are blocked and US persons are generally prohibited from dealing with them.
The sanctioned individuals and entities according to OFAC make extensive use of trade based money laundering (TBML) through export-import and retail businesses in the electronics and automotive sectors in the Tri-Border Area (TBA) where Argentina, Brazil, and Paraguay converge.
Despachantes
OFAC has sanctioned three Paraguayan individuals: Kassem Mohamad Hijazi (Kassem), Khalil Ahmad Hijazi (Khalil), and Liz Paola Doldan Gonzalez (Doldan).
Kassem has operated as a despachante or a dispatcher in Paraguay since at least 2017, commanding and controlling a money laundering organisation which operates on a global scale with the capability to launder hundreds of millions of dollars OFAC says.
Illicit despachantes are known for their ability to bribe customs officials, alter invoices on incoming merchandise, avoid taxation and inspections, and provide safe passage for illicit goods coming into Paraguay.
Shell companies
In his role as a despachante, OFAC says Kassem uses import and export companies, such as Espana Informatica – of which Khalil is the president – to import merchandise from the US to Paraguay.
Merchandise is then sold in Paraguay and the profits are then moved through currency exchange offices and banks in the TBA to the US, China and Hong Kong, among other locations.
Along with Espana, OFAC has also designated the three companies registered in Paraguay that are owned or controlled by Khalil: Emprendimientos Inmobiliarios Misiones, Apolo Informatica, and Mundo Informatico Paraguay.
Miami connections
One of Kassem’s associates in the TBA, Doldan, was also identified as an intermediary who works with shipments from the US, intermediaries paying bribes to port workers, despachantes, and Paraguayan customs officials to process imports and exports through Paraguayan customs.
OFAC has designated one of her companies, Mobile Zone International Import-Export. It was allegedly used to purchase goods from a company based in Miami in the US state of Florida, and subsequently send these goods to several shell companies in Paraguay.
Corrupt customs officials
As the goods would enter the country destined for these shell companies, Paraguayan customs would identify the cell phones as cheaper goods, such as printers and printer toner, to simulate the importation of lower-cost items.
This practice would allow Mobile Zone to pay less tax on the imports. According to press reporting, this scheme generated at least US$675 million.
More details on the sanctioned individuals and entities and OFAC’s targeting of corruption networks in Paraguay and the TBA can be found here.
Categories: Trade Based Financial crimes News
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