HomeNewsAnalysisUS Treasury Targeting More than Panama-based Operation?
ANALYSIS

US Treasury Targeting More than Panama-based Operation?

MONEY LAUNDERING / 29 DEC 2011 BY STEVEN DUDLEY EN

The United States Treasury Department's announcement that it was placing a Panama-based money laundering operation on its list of Specially Designated Narcotics Traffickers (SDNTs) appears to be another step in unraveling a Middle East - Mexico connection that has both political and legal implications.

In a statement, the Treasury Department said Jorge Fadlallah Cheaitelly and Mohamad El Khansa run 28 shell companies in Panama, Colombia and Hong Kong. One of these companies, Junior International S.A., is affiliated with an accused Lebanese drug trafficker, Ayman Joumaa, who made Treasury's SDNT list in January 2011. The Treasury also says the "Cheaitelly/Khansa" network works with operatives in Cali, Barranquilla and Maicao.

"By designating these individuals and companies we are exposing a significant international money laundering network, forcing them out of the international financial system, and undermining their ability to launder drug money through a global support network for the Mexican and Colombian drug cartels," the Treasury's Office of Foreign Assets Control (OFAC) Director Adam J. Szubin is quoted as saying in the government press release.

The designation freezes the assets of all companies allegedly operating in this money laundering operation and means penalties for any business or individual who continues to do business with these companies.

The press release did not mention Mexico's Zetas criminal gang by name, but this annoucement comes just two weeks after the US Department of Justice unsealed an indictment that accused Joumaa of moving drugs and helping to launder money for the Mexican group.

According to the indictment, Joumaa, aka "Junior," and his partners sold as much as 85 tons of cocaine to the Zetas between 2005-2007, which was later trafficked into the US, and laundered some $850 million in their profits for the group, some of it through the Lebanese Canadian Bank. The bank has denied any wrongdoing.

[Download US indictment pdf]

The details of the conspiracy reveal a vast network that stretches from Colombia to various countries in Central America and Mexico; to Lebanon, Spain and the Democratic Congo; and back to the United States.

Specifically, the indictment says that Joumaa and associates moved the cocaine from Colombia to Guatemala, Honduras and Mexico into the Zetas' hands. Some of the proceeds came back to Mexico in bulk cash, which Joumaa laundered in bundles of $2 mn to $4mn through Mexican, European and West African based operations. He then paid traffickers in Venezuela and Colombia in local currency, taking an estimated 8 to 14 percent commission along the way.

Joumaa has also been connected to Middle Eastern political/military movement Hezbollah, according to a ProPublica report. Although the US says it is a business rather than a political relationship, it adds to the growing list of potential Hezbollah connections to the Latin American underworld.

The US also recently accused the Iranian government of trying to use the Zetas to assassinate a Saudi official based in Washington DC, an accusation InSight Crime found sketchy. The attempt never happened as the "Zetas" operative was really working undercover for the US government.

See InSight Crime's

In either case, the US government appears ready to use these cases on two fronts: first, as a way to focus the spotlight on Hezbollah's and the Iranian government's potential effort to weave their way into the America's underworld and penalize them in the international theatre of public opinion; second, as a way to shift the battle against Mexico's drug trafficking organizations, in particular the Zetas, to a new legal playing field.

That second legal playing field could result in the designation of the Zetas as a foreign terrorist organization by the State Department. This would permit the US Department of Justice to expand the ways in which it could prosecute members of the organization and their support network, including banks, weapons purveyors and other logistical enterprises. The designation of other Mexican groups could follow.

It's not clear the Mexican government would appreciate such a politically and legally-charged move on the part of the State Department. The Mexican government has resisted efforts to qualify the Mexican criminal organizations as "insurgents" or "terrorists," and it is wary of some US legislators' (and Pentagon hawks') attempts to further militarize the discourse around counter-narcotics strategy in Mexico as this tends to bolster a one-sided approach within Mexico.

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