Source: https://ctc.usma.edu/hezbollahs-procurement-channels-leveraging-criminal-networks-partnering-iran/
Timestamp: 2019-04-21 08:26:44+00:00

Document:
Abstract: Iran provides Lebanese Hezbollah with some $700 million a year, according to U.S. government officials. Beyond that cash infusion, Tehran has helped Hezbollah build an arsenal of some 150,000 rockets and missiles in Lebanon. And yet, Hezbollah also leverages an international network of companies and brokers—some Hezbollah operatives themselves, others well-placed criminal facilitators willing to partner with Hezbollah—to procure weapons, dual-use items, and other equipment for the benefit of the group’s operatives and, sometimes, Iran. In the context of the war in Syria, Hezbollah’s procurement agents have teamed up with Iran’s Quds Force to develop integrated and efficient weapons procurement and logistics pipelines that can be leveraged to greatly expand Hezbollah’s weapons procurement capabilities.
Based in Damascus, Qasir and other senior Hezbollah officials work closely with officers from Quds Force’s Unit 190—which specializes in smuggling weapons to Syria, Lebanon, Yemen, and Gaza—under the supervision of Qassem Soleimani.5 This smuggling operation is significant in its own right, but it could also be used to assist Hezbollah’s own longstanding procurement efforts around the world, which are often intimately intertwined with the group’s transnational organized criminal networks raising funds through criminal enterprises.
The weapons connection likely raised some eyebrows among analysts and investigators, given the very high levels of state sponsorship and support Iran provides to Hezbollah. But despite that support, Hezbollah, as also detailed in this article, has an established track record of procuring and smuggling weapons through its own channels, parallel to the weapons regularly funneled to the group by Iran. Hezbollah weapons procurement agents oversee this program, though they often rely on criminal facilitators—weapons dealers, smugglers, money launderers, and more—who are uniquely situated to provide the kinds of services necessary to purchase weapons on the black market and deliver them to Hezbollah in Lebanon. These relationships often first develop through criminal financial and money-laundering schemes that broaden out over time to include weapons deals. And then there are other types of procurement activities focused not on weapons themselves but on dual-use items with military applications like computer programs, laser range finders, night-vision goggles, and more.
This article details how now, in the context of the war in Syria, some of Hezbollah’s most significant procurement agents—such as Muhammad Qasir—have teamed up with Iran’s Quds Force to develop integrated and efficient weapons procurement and logistics pipelines through Syria and into Lebanon that can be leveraged to greatly expand Hezbollah’s international weapons procurement capabilities. The Syrian war elevated the importance of such efforts, which quickly increased in scale and scope. As Assad gains control over more of Syria, Hezbollah and the Quds Force will be well placed to leverage their position in Syria along with their newly refined procurement and smuggling pipelines through various channels to secure and send weapons and sensitive technologies back to Hezbollah in Lebanon.
Operation Phone Flash Exposes Hezbollah’s Procurement, Inc.
Replacing spent ammunition and rusted weapons at the scale needed after the 2006 war demanded an organized procurement channel run by Hezbollah weapons procurement agents around the world. Hezbollah procurement agent Dani Tarraf is a case in point. In 2006, agents with the Philadelphia Joint Terrorism Task Force (JTTF) opened several parallel investigations into Hezbollah criminal activities in suburban Philadelphia, which together became known as Operation Phone Flash.
And yet, a series of U.S.-led international investigations would soon reveal that Hezbollah’s independent weapons procurement program continued unabated.
A particularly important arrest came in April 2014, when Czech authorities arrested alleged weapons dealer Ali Fayad acting on a U.S. arrest warrant. An alleged Lebanese-Ukrainian arms dealer with reportedly close ties to Hezbollah and Russia President Vladimir Putin, as well as Syria, Iran, and Latin American drug cartels, Fayad was the target of an elaborate sting operation.44 Hezbollah kidnapped several Czech citizens in Lebanon to secure Fayad’s release, and Putin put significant pressure on the Czech government as well, leading to his release and return to Lebanon in January 2016.45 The lengths to which Hezbollah went to secure his release indicated the importance it attached to him and his alleged procurement activities.
In other words, Hezbollah procurement networks had matured to the point that Iran was seeking to leverage its ability to gain access to weapons and sanctioned goods for Iran’s own direct needs. In turn, Iran also took the opportunity to use Hezbollah networks to benefit some of its other proxies as well, including Houthi rebels in Yemen.
Given Shalan’s alleged background, it should not surprise that he is reported to be a close associate of Mohammad Qasir,63 the head of Hezbollah’s Unit 108 who served as a notetaker during President Assad’s meeting with Iran’s President and Supreme Leader.
A screen capture from a video by Iran’s Press TV showing Mohammad Qasir (seated behind President Assad) attending February 25, 2019, meeting between Syrian President Bashar al-Assad (left) and Iranian President Hassan Rouhani (right) in Tehran, Iran.
Iran has used civilian airlines such as Mahan Air to transport weapons and personnel for Hezbollah, the Syrian regime, and other armed groups,70 and has helped Hezbollah build a sophisticated smuggling network to move these weapons from Syria to the Lebanese border and then to Hezbollah strongholds in Lebanon.71 These networks are also available to move weapons procured by Hezbollah’s own procurement efforts, such as those allegedly overseen by Abd al Nur Shalan and others.
Screen captures from a video posted via Syrian President Bashar al-Assad’s official Twitter account showing Mohammad Qasir attending February 25, 2019, meetings between Syrian President Bashar al-Assad and Iranian Supreme Leader Ayatollah Ali Khamenei (top image) and Iranian President Hassan Rouhani (bottom image) in Tehran, Iran. In first image, Qasir is seated in the far left foreground; in second image, he is seated behind President Assad with Qassem Soleimani also pictured (far left).
As documented here, these include alleged formal Hezbollah procurement agents (Laqis, Dbouk, Amhaz, Cherri, Zeaiter, Serhan, Shalan) as well as alleged criminal and alleged illicit financial networks that are well positioned to expand into procurement activities due to their criminal contacts (Kobeissi, Asmar, Hejejj). They leverage alleged front companies (Stars Holdings, Vatech SARL85) and provide transshipment and smuggling services as well, whether for materiel Hezbollah procured on its own or received from Iran.
Analysts in and out of government debate why Hezbollah exposes itself to additional law enforcement scrutiny by carrying out procurement efforts of its own when it receives such general support—funds and weapons both—from Iran. Some alleged procurement efforts clearly grew out of alleged illicit financial schemes and were allegedly pursued simply because the opportunity presented itself (Operation Phone Flash, Kobeissi, Asmar), but allegedly others were pursued by Hezbollah proactively (Dbouk, Amhaz, Shalan). One reason for the latter appears to be Hezbollah’s search for sensitive technologies even more than small arms—according to the U.S. Treasury Department, Hezbollah-affiliated networks specifically “seek to procure sensitive or controlled goods from the United States.”86 Another reason Hezbollah carries out its own procurement efforts may be a demand among Hezbollah’s fighters for original Western-manufactured weapons rather than the Chinese or other knock-offs often provided by Iran. And then there are special circumstances, like the Syrian war, when the demand for weapons and ammunition is so immediate that efforts to procure materiel—both independently and through Iran—are dramatically increased.
 “An Interesting Analysis of Faisal al-Qasim about Assad’s Sudden Visit to Iran,” El Dorar (Syria), March 1, 2019, available at https://eldorar.com/node/132203.
 “Special Iran: the Story of Assad’s Trip to Tehran,” Jadeh Iran, February 26, 2019, available at https://tinyurl.com/y4d2odcd.
 Author interview, Western intelligence official, February 2019; see video posted on the official Twitter feed of the Presidency of the Syrian Arab Republic, “The president’s working visit today to the Iranian capital,” February 25, 2019.
 “Treasury Designates Illicit Russia-Iran Oil Network Supporting the Assad Regime, Hizballah, and HAMAS,” U.S. Department of the Treasury, November 20, 2018.
 Nadav Pollak, “Rethinking U.S. Strategy for Intercepting Iranian Arms Transfers,” Washington Institute for Near East Policy, August 20, 2015.
 “Lebanese businessman jailed in Paris drug trial,” Times Live (South Africa), November 29, 2018.
 “DEA and European Authorities Uncover Massive Hizballah Drug and Money Laundering Scheme,” U.S. Drug Enforcement Administration Press Release, February 1, 2016.
 “International Radical Fundamentalism: An Analytical Overview of Groups and Trends,” U.S. Department of Justice, Terrorist Research and Analytical Center, Federal Bureau of Investigation, November 1994, declassified on November 20, 2008.
 United States of America v. Fawzi Mustapha Assi, Eastern District of Michigan, Southern Division, U.S. District Court, Government’s Sentencing Memorandum, Criminal No. 98-80695, June 9, 2008.
 United States of America v. Fawzi Mustapha Assi, Eastern District of Michigan, Southern Division, U.S. District Court, Findings of Fact and Conclusions of Law Regarding Applicability of § 3A1.4 of the U.S. Sentencing Guidelines, Criminal No. 98-80695, October 17, 2008.
 FBI 302 interview of Said Mohamad Harb, August 18, 2000, Case # 265B-CE-82188, p. 9.
 United States v. Mohamad Youssef Hammoud and Chawki Youssef Hammoud, June 10, 2002, Docket No. 3:00-cr-147, pp. 1,486-1,487.
 Robert Fromme and Rick Schwein, “Operation Smokescreen: A Successful Interagency Collaboration,” FBI Law Enforcement Bulletin 76:12 (2007): pp. 20-27.
 United States v. Mohamad Youssef Hammoud et al, “CSIS Summaries, Redacted Copy, Trial Testimony,” Docket No. 3:00-cr-147, p. 5.
 Matthew Levitt, “Why the CIA Killed Imad Mughniyeh,” Politico, February 9, 2015; Adam Goldman and Ellen Nakashima, “CIA and Mossad Killed Senior Hezbollah Figure in Car Bombing,” Washington Post, January 30, 2015.
 United States v. Mohamad Youssef Hammoud et al, “CSIS Summaries, Redacted Copy, Trial Testimony,” p. 22.
 “An Assessment of the Tools Needed to Fight the Financing of Terrorism: Hearing before Senate Committee on the Judiciary,” Western District of North Carolina, November 20, 2002 (Testimony of Robert J. Conrad, Jr).
 “Hezbollah (Part 1): Profile of the Lebanese Shiite Terrorist Organization of Global Reach Sponsored by Iran and Supported by Syria,” Special Information Bulletin, Intelligence and Terrorism Information Center at the Center for Special Studies, June 2003, p. 86.
 United States of America v. Riad Skaff, Government’s Sentencing Memorandum, No. 07CR0041, United States District Court, Northern District of Illinois, Eastern Division, May 27, 2008; United States of America v. Riad Skaff, No. 07CR0041, United States District Court, Northern District of Illinois, Eastern Division, January 29, 2007 (Affidavit of ICE Special Agent Matthew Dublin).
 United States of America v. Mahmoud Youssef Kourani, Government’s Written Proffer in Support of Detention Pending Trial, Crim. No. 03-81030, United States District Court, Eastern District of Michigan, Southern Division, January 20, 2004; USA v. Mahmoud Youssef Kourani, Indictment, Crim. No. 03-81030, United States District Court, Eastern District of Michigan, Southern Division, November 19, 2003; United States of America v. Sealed Matter, Affidavit of Timothy T. Waters.
 Nicholas Blanford, Warriors of God: Inside Hezbollah’s Thirty-Year Struggle Against Israel (New York: Random House, 2011), pp. 336-339.
 Nada Bakri, “Hezbollah Leader Backs Syrian President in Public,” New York Times, December 6, 2011.
 Author interview, law enforcement officials in Philadelphia, Pennsylvania, March 2010.
 Ibid.; “Arrests Made in Case Involving Conspiracy to Procure Weapons, Including Anti-Aircraft Missiles,” United States Department of Justice, Press Release, November 23, 2009; United States of America v. Dani Nemr Tarraf et al, Indictment, Crim. No. 09-743-01, United States District Court, Eastern District of Pennsylvania, November 20, 2009.
 Ibid.; “Arrests Made in Case Involving Conspiracy to Procure Weapons;” United States of America v. Dani Nemr Tarraf et al, Indictment and Criminal Complaint, Crim. No. 09-743-01, United States District Court, Eastern District of Pennsylvania, November 20, 2009.
 United States of America v. Dani Nemr Tarraf et al, Pretrial Detention Order.
 Spencer Hsu, “Hezbollah Official Indicted on Weapons Charge,” Washington Post, November 25, 2009; “Sayyid Nasrallah, Hamas Call for Resumption of Lebanese-Palestinian Dialogue,” Al Manar TV, December 2, 1999 (supplied by BBC Worldwide Monitoring); Stewart Bell, “10 People Charged with Supporting Hezbollah,” National Post (Canada), November 24, 2009; author interview, law enforcement officials in Philadelphia, Pennsylvania, March 2010; United States of America v. Hassan Hodroj et al, Affidavit Samuel Smemo, Jr.
 United States of America v. Hassan Hodroj et al, Affidavit Samuel Smemo, Jr.
 Casey L. Addis and Christopher M. Blanchard, “Hezbollah: Background and Issues for Congress,” Congressional Research Service, January 3, 2011.
 Matthew Levitt, “Hezbollah: Party of Fraud,” Foreign Affairs, July 27, 2011.
 This observation is based on the author’s discussions with current and former U.S. government officials tracking Hezbollah over the past decade.
 “Seven Defendants Charged With Conspiring To Aid The Taliban,” U.S. Drug Enforcement Administration Press Release, February 14, 2011.
 “Treasury Designates Hizballah’s Construction Arm,” U.S. Department of the Treasury, February 20, 2007.
 “Two Men Arrested and Charged With Illegally Exporting UAV Parts and Technology to Hizballah,” United States Department of Justice Press Release, February 16, 2018.
 United States v. Samer El Debek, Affidavit in Support of Warrant to Arrest, United States District Court, Southern District of New York, May 31, 2017.
 United States v. Ali Kourani, Affidavit in Support of Warrant to Arrest, United States District Court, Southern District of New York, May 31, 2017; United States of America v. Samer El Debek, Affidavit in Support of Warrant to Arrest.
 United States v. Ali Kourani, Affidavit in Support of Warrant to Arrest.
 “Treasury Sanctions Procurement Agents Of Hizballah Front Company Based In Lebanon With Subsidiaries In The UAE And China,” U.S. Department of the Treasury Press Release, July 10, 2014.
 “Sandcastles: Tracing Sanctions Evasion Through Dubai’s Luxury Real Estate Market,” C4ADS, June 12, 2018.
 Josh Meyer, “The Secret Backstory of How Obama Let Hezbollah Off the Hook,” Politico, December 2017.
 Matthew Levitt, “In Search of Nuance in the Debate over Hezbollah’s Criminal Enterprise and the U.S. Response,” Lawfare Research Paper Series, March 20, 2018.
 “Treasury Sanctions Hizballah Front Companies and Facilitators in Lebanon And Iraq,” U.S. Department of Treasury Press Release, June 10, 2015.
 “Two Hezbollah Associates Arrested On Charges Of Conspiring To Launder Narcotics Proceeds And International Arms Trafficking,” U.S. Department of Justice Press Release, October 9, 2015.
 “Treasury Sanctions Hizballah Procurement Agents and Their Companies,” U.S. Department of the Treasury Press Release, November 5, 2015.
 DEA Special Agent Kenneth Martin, “Affidavit in Support of Arrest Warrant,” Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, [date unspecified on the document] 2016.
 “Treasury Sanctions Key Hizballah Money Laundering Network,” U.S. Department of the Treasury Press Release, January 28, 2016.
 “Treasury Sanctions Hizballah Leaders, Military Officials, And An Associate In Lebanon,” U.S. Department of the Treasury Press Release, July 21, 2015.
 “Exposed: the head of Hezbollah’s Unit 108 responsible for smuggling the Iranian missiles from Syria to Lebanon,” Intelli Times (Israel), February 16, 2018. A Western intelligence official confirmed the information in question to the author in February 2019.
 Nathan Sales, “Tehran’s International Targets: Assessing Iranian Terror Sponsorship,” Washington Institute for Near East Policy, November 13, 2018.
 Michael Eisenstadt and Jeffrey White, “The Next Hizballah-Israel Conflict,” American Interest, September 19, 2017.
 Ehud Yaari, “Bracing for an Israel-Iran Confrontation in Syria,” American Interest, April 30, 2018.
 Hanin Ghaddar and Matthew Levitt, “Hezbollah’s Urban Missile Factories Put Civilians at Risk,” Washington Institute for Near East Policy, October 4, 2018.
 Charles Levinson and Jay Solomon, “Syria Gave Scuds to Hezbollah, U.S. Says,” Wall Street Journal, April 14, 2010.
 “Treasury Designates Mahan Air Service Provider,” U.S. Department of the Treasury Press Release, July 9, 2018.
 Georges Malbrunot, “Dans le Secret des Caches d’Armes du Hezbollah” [Inside the Secret of Hezbollah’s Weapon Stockpiles], Figaro, October 25, 2010.
 “Hezbollah,” Mapping Militants Project, Stanford University, August 5, 2016.
 “Hizbullah SG Speech on 11-11-2007,” Al-Ahed News (Lebanon), November 11, 2007.
 “Treasury Targets Iran’s Central Bank Governor and an Iraqi Bank Moving Millions of Dollars for IRGC-Qods Force,” U.S. Department of the Treasury, May 15, 2018.
 “Treasury Designates Illicit Russia-Iran Oil Network Supporting the Assad Regime, Hizballah, and HAMAS,” U.S. Department of the Treasury Press Release, November 20, 2018.
 See video posted on the official Twitter feed of the Presidency of the Syrian Arab Republic, “The president’s working visit today to the Iranian capital,” February 25, 2019.
 “Terrorist Financing Assessment: 2018,” Financial Transactions and Reports Analysis Centre of Canada, 2018.
 “European Union Terrorism Situation and Trend Report (TESAT) 2018,” Europol, 2018.
 “National Strategy for Combating Terrorist and Other Illicit Financing: 2018,” U.S. Department of the Treasury, 2018, p. 46.
 “National Strategy for Combating Terrorist and Other Illicit Financing,” p. 26.
 Hanin Ghaddar, “U.S. Sanctions Are Hurting Hezbollah,” Washington Institute for Near East Policy, March 6, 2019.
 “Nasrallah: Resistance needs support because we are in the heart of the battle,” An-Nahar (Lebanon), March 8, 2019.
 “Treasury Designates Key Hizballah Fundraising Organization,” U.S. Department of the Treasury Press Release, August 29, 2006.
 “Hezbollah Launched a Campaign to Raise Money for Military Purposes Using the Islamic Resistance Support Association,” Meir Amit Intelligence and Terrorism Information Center, December 2, 2019.
 “Iran, First Affected by the Fight Against Terrorism of the Panamanian Merchant Marine,” Maritime Herald, February 8, 2019.

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