According to an Amended Complaint filed in Manhattan federal court in October 2012, and other documents filed in the case:
From approximately January 2007 to early 2011, at least $329 million was transferred by wire from LCB and other financial institutions, primarily two Lebanese money exchange houses, to the United States for the purchase of used cars that were then shipped to West Africa. Cash from the sale of the cars, along with the proceeds of narcotics trafficking, were funneled to Lebanon through Hizballah-controlled money laundering channels. LCB played a key role in these money laundering channels and conducted business with a number of Hizballah-related entities. Hizballah is a U.S. Department of State designated Foreign Terrorist Organization, a Specially Designated Terrorist, and a Specially Designated Global Terrorist.
On February 10, 2011, the U.S. Department of the Treasury, Financial Crimes Enforcement Network (“FinCEN”) issued a finding and proposed rule, pursuant to the USA Patriot Act, that LCB is a financial institution of primary money laundering concern, based on, among other things, FinCEN’s determination that there was reason to believe that LCB had been routinely used by drug traffickers and money launderers operating in various countries in Central and South America, Europe, Africa, and the Middle East. FinCEN also determined that there was reason to believe that LCB managers were complicit in the network’s money laundering activities.
Following the FinCEN action, another Lebanese financial institution, Société Générale de Banque au Liban (“SGBL”), acquired most of the assets of LCB. In connection with the purchase, $150 million was placed in an escrow account at Banque Libano Française SAL (“BLF”) in Lebanon. In August 2012, the Government seized $150 million from a BLF correspondent account in the United States based on a provision of U.S. law allowing seizure of such funds as a substitute for the funds held in escrow in Lebanon (the “Seized Funds”).
The settlement order requires LCB to forfeit $102 million of the Seized Funds to the United States. The settlement order also provides that, to settle claims brought by SGBL for $90 million of the Seized Funds, LCB will be required to pay SGBL an additional $12 million, and make provisions for additional payments based on separate agreements between LCB and SGBL. SGBL will also receive the remaining $48 million of the Seized Funds.
In addition, a second settlement order was entered in this action on June 20, 2013, regarding claims against the Hassan Ayash Exchange Company (“Ayash”), one of the Lebanese money exchange houses allegedly involved in the money laundering scheme. Under this settlement order, Ayash will forfeit more than $720,000 to the United States.
The settlement orders resolve only claims relating to LCB, Ayash, and their assets. The civil forfeiture and money laundering action continues against other alleged participants in the money laundering scheme.
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