Lebanese Canadian Bank Laundered Money for Hezbollah, U.S. Says in Lawsuit

Lebanese Canadian Bank and two Lebanese exchange houses helped launder more than $480 million for the Hezbollah terrorist group in a scheme that involved buying and selling used cars, the U.S. said in a civil complaint.

Federal prosecutors filed a lawsuit in Manhattan today claiming the defendants took money from Lebanon to buy used cars in the U.S. and sell them in West Africa. Money from the car sales and from drug trafficking was funneled through Hezbollah- linked money laundering channels back to Lebanon, according to the complaint.

“The intricate scheme laid out in today’s complaint reveals the deviously creative ways that terrorist organizations are funding themselves and moving their money, and it puts into stark relief the nexus between narcotics trafficking and terrorism,” U.S. Attorney Preet Bharara said in a statement today.

The U.S. Treasury Department in February identified Lebanese Canadian Bank as a “financial institution of primary money laundering concern,” according to the statement. As a result, financial institutions in the U.S. cut their ties to the bank, making it impossible for it to send money to the U.S., prosecutors said.

Hezbollah, based in Lebanon, was designated as a foreign terrorist organization by U.S. President Bill Clinton in 1997. The suit filed today also names as defendants Hassan Ayash Exchange Co. and Ellissa Holding, both Lebanese exchange firms.

The case is U.S. v. Lebanese Canadian Bank SAL, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Patricia Hurtado in Manhattan federal court at pathurtado@bloomberg.net; Bob Van Voris in Manhattan federal court at rvanvoris@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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