The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced on Tuesday the designation of a large international money laundering and sanctions evasion network involving 52 individuals and entities across Lebanon, the United Arab Emirates, South Africa, Angola, Côte d'Ivoire, the Democratic Republic of the Congo, Belgium, the United Kingdom, and Hong Kong.
The network was found to be facilitating payments, shipments, and deliveries of cash, diamonds, precious gems, art, and luxury goods for the benefit of Hezbollah financier and Specially Designated Global Terrorist Nazem Said Ahmad.
Ahmad was designated on December 13, 2019, for providing material support to Hizballah. The network unveiled today includes dozens of individuals and their associated companies involved in assisting Ahmad in evading U.S. sanctions to maintain his ability to finance Hezbollah and his luxurious lifestyle.
This designation is part of a coordinated effort between the Department of Homeland Security, the Department of State's Rewards for Justice program, and the United Kingdom.
Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated, "The individuals involved in this network used shell companies and fraudulent schemes to disguise Nazem Said Ahmad's role in financial transactions." Nelson also urged luxury good market participants to remain vigilant against such tactics and schemes that allow terrorist financiers, money launderers, and sanctions evaders to launder illicit proceeds through the purchase and consignment of luxury goods.
This significant designation highlights the ongoing efforts of the United States and its international partners to combat terrorism financing, money laundering, and sanctions evasion. By identifying and disrupting such networks, the U.S. and its allies aim to undermine the financial support for Hizballah and other terrorist organizations, ultimately promoting global security and stability.
With operations in Beirut, Lebanon; Dubai, United Arab Emirates; Johannesburg, South Africa; and Hong Kong, Nazem Said Ahmad's global network relies on family members, associates, and companies exploiting the permissive nature of the global diamond, precious gems, and art market to facilitate payment and shipment of luxury goods. The network manipulates diamond prices and taxes, using both legal and illegal arrangements to coerce participants into falsely engineering certificates, required under the Kimberley Process, and to present their business as legitimate.
Ahmad's network uses aliases, front companies, and fraudulent paperwork to enable the purchase or consignment of high-priced luxury goods and artwork from auction houses and galleries worldwide. They undervalue invoices for imported goods and clear bulk items through seaports, leveraging Hizballah's influence at these ports of entry to move assets into Lebanon without paying the applicable taxes and duties.
Ahmad evades safeguards within the U.S. and international financial systems by using associates and front companies that transact on his behalf, as well as storing large amounts of currency outside the reach of Lebanese banking officials and regulators. The network facilitated a complex scheme of bulk cash transfers, intra-network accounting book transfers, and payments from personal bank accounts and credit cards for business transactions to circumvent cash reserve restrictions and avoid scrutiny. Trusted couriers transported cash and other tangible assets, such as diamonds and art, for the financial benefit of Ahmad, his family, and close associates.
Since 2012, Ahmad has acquired over $54 million in works of art from major auction houses, galleries, exhibitions, and artists' studios, often concealing his beneficial ownership by having official invoices drawn up using cover companies, family members, or business associates as the owners. The luxury goods and art market has provided an ideal avenue for Ahmad and his co-conspirators to move funds out of Lebanon, capitalizing on schemes to overvalue and undervalue artwork and exploiting the industry's practices.
Key facilitators and associates in Nazem Said Ahmad's network include family members and business associates. Firas Ahmad, his son, handles business affairs in South Africa and is the director of diamond companies Mega Gems and Thula Uzwe Trading. Firas Ahmad conceals his ultimate beneficial ownership through front companies such as Oriental Dynasty Limited.
Nazem Said Ahmad's daughter, Hind Ahmad, brokers deals on behalf of her father and owns and operates two galleries, Artual Gallery in Beirut, Lebanon, and DIDA in Abidjan, Côte d'Ivoire. Rami Baker, Ahmad's brother-in-law, serves as a proxy for Ahmad in many companies in Lebanon and Angola. Rima Baker, Ahmad's wife, has served as a proxy for the purchase and consignment of works of art.
Business associates and accountants such as Mohamad Hijazi, Sundar Nagarajan, Ali Mossalem, Mohamad Ismail, Ali Osseiran, Maricel Francisco, Fadi Sader, Mohamad Wehbe, Bassem Murad, Hussein Nachar, and Fadi Abbas Saad have also provided material support to Ahmad's network by managing financial ledgers, facilitating payments and shipments, and conducting transactions in the interest of the network.