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U.S. authorities bust cigarette-smuggling ring linked to Hezbollah

FBI
An FBI agent and a police officer collect evidence at the scene of one of Friday's raids against a cigarette-smuggling ring  

July 21, 2000
Web posted at: 8:40 p.m. EDT (0040 GMT)


In this story:

'No terrorism charges'

'Willful immigration fraud'

Operation Smokescreen

RELATED STORIES, SITES icon



CHARLOTTE, North Carolina (CNN) -- Authorities on Friday broke up a Charlotte, North Carolina-based ring accused of smuggling cigarettes to raise money for Hezbollah, an armed Islamic group in Lebanon that the United States has designated as terrorist.

Charges were filed against 18 suspects, all but one of whom were arrested Friday -- 16 in Charlotte and one in Detroit. One suspect, a woman, remains at large and is being sought in San Francisco.

In court papers, the group is said to have "put aside for Hezbollah several thousand dollars in cash representing the proceeds from trafficking in contraband cigarettes" plus donations from fund-raising activities among Hezbollah members or supporters in the Charlotte area.

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Mohamad Youssef Hammoud, identified as the group's leader, is described in an affidavit as "well-connected to Hezbollah leaders in Lebanon," where he received military training and became "very comfortable around weapons." According to the affidavit, he is "dangerous because he would likely assist in carrying out any action against United States interests if he were required to do so by Hezbollah."

Hezbollah, an Islamic group known as the "Army of God," is active in Lebanon, with support from Syria and Iran. The affidavit described Hezbollah as a "designated foreign terrorist organization."

Financially supporting a group designated as terrorist is a violation of a federal U.S. law, said U.S. attorney Mark Calloway.

'No terrorism charges'

But none of the suspects was accused in connection with any violent act or other form of terrorism. "I want to emphasize there are no criminal terrorism charges in those complaints," Calloway said.

A court affidavit supporting search warrants used in the raids said investigators had learned that Hammoud's group holds weekly Thursday evening meetings at homes of Hezbollah members in Charlotte to discuss Hezbollah "activities and operations" and to solicit donations for the group.

According to the affidavit, all who attended those meetings were involved in the crimes mentioned in the indictment.

Hammoud and six others, all Charlotte-area residents, were charged with violating immigration laws, conspiring to traffic in contraband cigarettes and money laundering conspiracy. The other defendants were charged with "associated crimes."

woman
A woman leaves a house in Charlotte shortly after it was raided by authorities. The woman was escorted from the house  

'Willful immigration fraud'

Another man arrested, Bassem Hammoud, is Mohamad Hammoud's brother. He was picked up in Detroit on a cigarette smuggling charge.

The immigration fraud involved the use of phony visas, Calloway said. He said nine of the suspects have faced deportation, but managed to stay in the United States through "willful immigration fraud."

Friday's raids involved at least 230 officers from federal, state and local law enforcement agencies and translators who spoke Lebanese, according to federal officials.

Operation Smokescreen

The arrests were part of an ongoing investigation into the smuggling of cigarettes from states where the tax on their sale is low to states where the tax is high. Dubbed Operation Smokescreen, the investigation began three and half years ago with a sheriff's department tip to the Bureau of Alcohol, Tobacco and Firearms, officials said.

Federal agencies participating in the raids included the FBI, Immigration and Naturalization Service and the Diplomatic Security Service.

ATF agent Richard Fox called cigarette smuggling a "crime of national significance" because it deprives states of hundreds of millions of dollars in taxes on tobacco products.

Fox said the tax on a pack of cigarettes could be as low as five cents in "source states" such as North and South Carolina and as high as 75 cents in the smugglers' northern destination states such as Michigan.

Fox refused to detail how the suspects allegedly sold their goods. In general, he said, "you must have a network in order to make this a continuous, profitable scheme."

Calloway said a gas station and bank accounts were among items seized in the raids.

At one house that was raided by federal agents, boxes of evidence filled the front porch. Local media said the seized items included a computer hard drive.



RELATED STORIES:
Computer salesmen charged in money laundering sting
September 28, 1999
29 arrested in immigration fraud ring
March 16, 1999
RJR affiliate pleads guilty to cigarette smuggling
December 23, 1998

RELATED SITES:
The Bureau of Alcohol, Tobacco and Firearms
Federal Bureau of Investigation
Immigration and Naturalization Service


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