Hezbollah linchpin arrested in Latin America

Authorities in Argentina accused the Hezbollah financier of laundering $10 million on behalf of the group at a casino in the Iguazu Falls area.
Tuesday 25/09/2018
In this Nov. 17, 2003 file photo, Lebanese citizen Assad Ahmad Barakat, who was then facing tax evasion charges, is escorted by police to a courthouse in Asuncion, Paraguay. (AP)
In this Nov. 17, 2003 file photo, Lebanese citizen Assad Ahmad Barakat, who was then facing tax evasion charges, is escorted by police to a courthouse in Asuncion, Paraguay. (AP)

WASHINGTON - Prominent Hezbollah financier Assad Ahmad Barakat has been arrested by Brazilian authorities in the notorious tri-border area the country shares with Paraguay and Argentina.

Barakat has a history as a financier for the Lebanese militia and is wanted by several of countries for his alleged activities with the group. Barakat has been accused by authorities in Paraguay of identity theft. He previously served six years in prison in Paraguay for tax evasion.

Authorities in Argentina accused Barakat of laundering $10 million on behalf of Hezbollah at a casino in the Iguazu Falls area. He was arrested September 22.

The United States designated Barakat a “global terrorist” in 2006 and included his name in a list of people in the tri-border area who were financing Hezbollah. “Assad Ahmad Barakat’s network in the tri-border area is a major financial artery to Hezbollah in Lebanon,” Adam Szubin, director of the Treasury Department’s Office of Foreign Assets Control, said at the time.

Barakat was Hezbollah’s chief of military operations in the 1990s and responsible for fundraising in the tri-border area. He was thought to be responsible for operating Hezbollah’s financial network throughout the region and owned several businesses that allegedly conducted money-laundering activities on behalf of the group.

Barakat emigrated from Lebanon to escape the civil war in the 1980s. After arriving in the tri-border area, he established several businesses, primarily within Ciudad del Este, Paraguay. Among them were Apollo Import Export and Mondial Engineering and Construction, which Barakat allegedly used as a front to launder money from the Lebanese militia.

Barakat operated businesses based in Lebanon, Chile and the United States. He is thought to have extorted funds for Hezbollah by pressuring Lebanese shopkeepers in the tri-border area to contribute to the group or risk having family members placed on a “Hezbollah blacklist.”

Barakat is said to have regularly forwarded large sums of money to Hezbollah in Lebanon and Iran, as well as having personally carried funds to Lebanon, travelling with a Paraguayan passport as of 2000.

The tri-border area has long been of concern to authorities because it has developed into a haven for terrorist groups and drug smugglers.

“After the September 11 attacks, the [tri-border area] became a sanctuary for terrorist groups like al-Qaeda and Hezbollah, not to mention various drug trafficking organisations,” US Representative Keith Rothfus, a Republican from Pennsylvania, said May 15 at the release of a report by Asymmetrica and the Counter Extremism Project (CEP).

“Hezbollah generates proceeds from illicit activities that measure in the hundreds of millions of dollars annually, possibly billions. Hezbollah is also a major global drug-trafficking organisation.”

Illicit activity in the tri-border area is thought to provide terrorist groups and criminal gangs as much as $800 million a week.

The report claimed the tri-border area has come to operate as a mini-state, existing under the jurisdiction of “a corrupt elite.” The International Monetary Fund expressed concern about the effect money laundering and terrorist financing in the region would have on legitimate capital flows around the world.

“Hezbollah’s presence and economic activities in the TBA must be curtailed and halted,” said CEP Hezbollah expert David Daoud. “The group currently runs one of the largest cigarette-smuggling operation in the Western Hemisphere. By tolerating this illicit activity, we are allowing Hezbollah to continue to operations, and plotting and executing further attacks.”