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  A US district court sentencing memorandum for a convicted Hezbollah terrorist in 1999 revealed that the FBI had been running a confidential informant—a Lebanese immigrant—in the tri-border area.36 According to the informant, Mohammad Abdallah was regarded as “the principal leader of Hezbollah in the region”; his brother, Adnan Yousef Abdallah, functioned as his deputy. As the “second most important Hezbollah figure in the tri-border area,” the FBI reported, Adnan “oversees the clandestine extremist activities of the Abdallah clan.”37 Only much later, in December 2006, would the US government publicly designate Mohammad Abdallah as a Hezbollah terrorist.38

  According to Argentine intelligence and the reports of a protected witness, Farouk Omairi maintained regular contact with the Iranian embassy in Buenos Aires and with the city’s al-Tauhid mosque, where Omairi lived briefly. Along with his business partner, Mohammad Abdallah, he was closely tied to the Husseinia mosque and the Islamic Charitable Association.39 Prosecutors were especially interested in Omairi’s contacts with the recently minted Iranian diplomat Mohsen Rabbani.40 In time, these connections would be leveraged by Rabbani to help execute the AMIA bombing, as demonstrated through telephone calls traced to and from the travel agency co-owned by Omairi and Abdallah, Piloto Turismo. Intelligence officers would later determine that Piloto Turismo was not just a business that provided convenient cover for illicit conduct but rather that it was opened with start-up funds supplied by Hezbollah and that it was meant explicitly to serve as a Hezbollah front company.41

  Uniquely positioned to provide cover for a wide array of illicit activities, travel agencies like Piloto Turismo enabled the subjects of terrorism-support and criminal investigations to obtain false documents, such as fake passports and residency documents. This positioned the travel agencies as de facto points of contact for individuals overseas, especially in Lebanon and elsewhere in the Middle East, seeking to enter the tri-border area surreptitiously. As cash-heavy businesses, the travel agencies could also serve as underground currency exchangers and alternative money remittance services. As their investigations progressed, Argentine law enforcement authorities quickly found additional cases to corroborate their initial findings. For example, the Interpol office in Brazil reported that the communities of Middle Eastern immigrants in Foz do Iguaçu and Ciudad del Este appeared to have ties both to Hezbollah and to Palestinian extremists.42

  The result of these activities was that Hezbollah built formal and informal support networks in the tri-border area, a process made easy thanks to the large Lebanese and Shi’a populations. Hiding in plain sight, the Hezbollah operatives brought over through Piloto Turismo and other travel agencies found themselves in an ideal operating environment to raise funds, provide logistical support, and engage in operational activities in the region. This included, according to a protected witness, the formation of sleeper or “dormant” cells operating under strict operational security guidelines such that members of one cell were not aware of members of another. To avoid attracting attention, they reportedly settled and worked among friends and relatives in Ciudad del Este, where they used businesses, schools, and mosques to help establish their cover.43

  After the AMIA attack, Omairi would run a new travel agency for a time before authorities arrested him and his son on charges of using the travel agency and a money-exchange business to falsify documents and launder drug money.44 The arrests were the result of a 2006 Brazilian Federal Police counternarcotics investigation dubbed Operation Camel, which determined that Omairi provided travel support to drug mules transporting cocaine and that he had obtained Brazilian citizenship illegally.45 The arrests came within months of the US Treasury Department’s designation of Omairi and Abdallah as Hezbollah operatives. Omairi, Treasury stated, served as a regional coordinator for Hezbollah and procured false Brazilian and Paraguayan documentation with which he helped people obtain Brazilian citizenship illegally. He was also involved in trafficking narcotics between South America, Europe, and the Middle East.46 Omairi and Abdallah were key pillars of the “Barakat network” in the tri-border area; the extent of the network’s criminal support for Hezbollah was staggering. Abdallah’s role included personally carrying monies raised in the region to Hezbollah in Lebanon, where he met with senior Hezbollah officials and members of Hezbollah’s security division, Treasury revealed. Sometimes money flowed in the reverse direction, and Hezbollah would send Abdallah back with funds intended to support the Hezbollah network in the tri-border area.47

  As the personal representative of Hezbollah leader Sheikh Hassan Nasrallah to the tri-border area, Assad Ahmad Barakat commanded respect. Even as of late 2001, he reportedly traveled to Lebanon and Iran annually, meeting with both Nasrallah and Fadlallah.48 This proved important for maintaining unity among the tri-border area’s Hezbollah supporters, some of whom, like Barakat, were closer to Nasrallah, while others, like Abdallah, were closer to Fadlallah. (Abdallah’s cousin was Fadlallah’s spokesman.)49 At times when the two Beirut-based Hezbollah leaders were vying for leadership of the group, tensions would quickly reverberate across oceans and time zones all the way to their respective supporters in South America. In the late 1990s, for example, tensions rose to such a level that a member of the Hezbollah network with familial and business ties to both the Abdallah and Barakat clans, Hussein Ali Hmaid, served as a liaison between the two rival clans.50 In an effort to demonstrate the high regard in which the Hezbollah leadership in Lebanon held its tri-border support network and to foster unity within the local Hezbollah community, Fadlallah reportedly traveled to Ciudad del Este in 1994 on an Iranian passport bearing another name to bless the Profeta Mahoma mosque, which Abdallah owned and ran.51

  Barakat first arrived in Paraguay with his father, a former chauffeur for a Lebanese politician, in 1985.52 Though only eighteen years old at the time, Barakat soon became a prominent businessman within the Lebanese community in Ciudad del Este.53 Like so many other Hezbollah supporters, Barakat lived primarily on the Foz do Iguaçu side of the Friendship Bridge but traversed the bridge regularly on his way to his various businesses based in Ciudad del Este. Among these was an electronics wholesale store, Casa Apollo, located in the Galeria Page shopping center, that authorities determined served “as a cover for Hezbollah fundraising activities and as a way to transfer information to and from Hezbollah operatives.” He used another of his companies, Barakat Import Export Ltd., to raise money for Hezbollah “by mortgaging the company in order to borrow money from a bank in a fraud scheme.”54 The extent of Barakat’s criminal activity in support of Hezbollah was impressive. From distributing and selling counterfeit US dollars to shaking down local shopkeepers for donations to Hezbollah, Barakat was accused by the Treasury Department of engaging in “every financial crime in the book” to generate funds for the group.55

  “Barakat is more than a financier,” explained a Paraguayan investigator.56 According to Argentine authorities, Barakat was a card-carrying member of Hezbollah’s Islamic Jihad Organization (IJO) terrorist wing.57 He and his network collected sensitive information about the activities of other Arabs in the tri-border area, including those who traveled to the United States or Israel. This was of particular interest to the group and duly collected and passed along to Hezbollah’s Foreign Relations Department in Lebanon.58 Even in his fundraising role, Barakat’s heavy-handed tactics underscored that he was no mere fundraiser. His threats to shopkeepers were a case in point: instead of threatening local store owners themselves, Barakat threatened that family members in Lebanon would be put on a “Hezbollah blacklist” if they did not pay their quota to Hezbollah through Barakat.59

  Residents knew to take such threats seriously. In the fall of 2000, Barakat reportedly attended a meeting where Hezbollah members in the tri-border area discussed assassinating Israelis and former members of the recently disbanded South Lebanon Army (SLA).60 A year and a half later, Michael Youssef Nasser, a former SLA member and cousin of SLA commander Antoine Lahad, was gunned down in São Paul
o in a carefully planned assassination. While the case was never fully resolved, it should not surprise that suspicions pointed to Hezbollah.61 Given his history and personal ties, Barakat’s participation in discussions about violent activities is no anomaly. Some law enforcement officials, for example, maintain he was a “close collaborator” of Hezbollah hijacker Mohammad Ali Hamadi, who participated in the 1985 hijacking of TWA flight 847 and the murder of US Navy diver Robert Dean Stethem.62

  The day after the September 11 attacks, a SWAT team descended on the Galeria Page shopping center in Ciudad del Este and raided Assad Barakat’s Casa Apollo electronics shop. Barakat either was away on business or, according to one account, had fled home to Foz do Iguaçu on the Brazilian side of the border. Either way, while he evaded capture, two of his employees were arrested and his shop shuttered.63 Among the items found during this initial search was a letter from Hezbollah acknowledging receipt of $3,535,149 from Barakat in 2000.64 The following month, thirty masked Paraguayan antiterrorism police raided Casa Apollo once more, netting still more incriminating documents, videos, and computer files and arresting Barakat’s executive assistant, Sobhi Fayyad.65

  Investigators found hundreds of receipts, often from Hezbollah’s Martyrs Foundation. “The money goes to charities,” explained the head of Paraguay’s antiterrorism unit, “and the Martyr Foundation is managed by Nasrallah so it is obviously suspicious.” Speaking in 2003, he noted, “We believe he [Barakat] sent some $50 million to Hezbollah since 1995.”66 But one letter in particular, signed by “brother Hassan Nasrallah,” was especially damning. In the letter, the Hezbollah leader expresses his gratitude for Barakat’s collaboration with the “protection program for brothers and martyrs.”67

  The sixty or so seized videos included footage of militants and speeches inciting people “to armed struggle and revolution, and [arguing] that it was better to die and become a martyr than be subjected to the whims of Israel and the U.S.”68 On one computer police found a video of Hezbollah military operations, including operatives detonating explosives and the ensuing deaths. Another file detailed “Hezbollah military orders for each town and village in southern Lebanon.”69 When ultimately detained and questioned, Barakat played down the significance of the seized material, claiming he merely supported Lebanese charities and collected videos that are commonly available on Hezbollah’s al-Manar television station. Authorities found his protestations unconvincing, however, especially given the attention then being paid to his activities elsewhere.

  Branching out from the tri-border area, Barakat’s import-export business took him to other regional free trade zones like Iquique, Chile, where authorities observed Barakat, Mohammad Abdallah, and other members of their clans open import-export companies, conduct lengthy meetings, and engage in a range of suspicious activities. Paralleling its Paraguayan counterpart’s investigation into Barakat’s illicit financial activities and links to Hezbollah, the Chilean Ministry of the Interior initiated an investigation into what it suspected was “illicit association for the purpose of committing terrorist acts.” Barakat’s financial activities in Chile, it seemed to investigators, were an extension of his Paraguay-based schemes, which were aimed at supporting “relatives fallen in terrorist acts and the economic strengthening of Hezbollah.”70 According to Chilean intelligence, in March 2001 Barakat set up two fictitious businesses in Iquique, Saleh Trading Limitada and Importadora/Exportadora Barakat Limitada, for the purpose of laundering money earned through his criminal enterprises in Ciudad del Este, Paraguay.71

  Barakat’s business ties extended to Miami and New York as well, and were allegedly established as cutouts to receive international shipments of goods that could then be re-exported to the tri-border area.72 Traveling on a multiple-entry US visa, Barakat acknowledged making a half dozen trips to the United States. Although theoretically he could have entered the United States on false documents of the kind his network was known to produce, the last entry stamp into the United States on Barakat’s Paraguayan passport was in April 2001, when he visited Miami. The visa was reportedly revoked later that year when “his name appeared on the US Department of State’s list of suspected terrorists.”73

  As a result of evidence collected during the 2001 raids of Barakat’s store, Brazilian police eventually arrested Barakat in June 2002 on tax evasion charges, just as Barakat was making plans to flee to Angola. The arrest prompted a leader of the Husseinia Iman al-Khomeini mosque in Foz, where Barakat served as deputy financial director, to ban all non-Hezbollah members from attending services.74 As for Barakat’s Africa plans, they were far from original. According to Brazilian police, Hezbollah accomplices were known to move about Africa on forged Paraguayan travel and identity documents of the kind Barakat’s network produced.75

  As Barakat sat in a Brasília prison, investigators uncovered evidence that his network had partnered with Hong Kong Mafia barons to receive and distribute a broad array of pirated goods, including knockoff Barbie dolls and other toys. Raids of incoming shipping containers netted goods valued at half a million dollars, leading prosecutors to add trademark counterfeiting to Barakat’s charge sheet.76 Barakat’s legal troubles took another turn for the worse in May 2003, when Argentine prosecutors issued their own warrants for Barakat’s arrest, this time for his roles in the 1992 bombing of the Israeli embassy in Buenos Aires and the 1994 AMIA bombing.77 Finally, in November 2003, Barakat was extradited to Paraguay. He was ultimately convicted of tax evasion and sentenced to a six-and-a-half-year prison term. In 2007, he was also stripped of his naturalized citizenship based on evidence that he operated as a “financial agent” of Hezbollah.78

  The Barakat network continued to function, however, leading the US Treasury Department to add Assad Barakat and two of his companies—the Casa Apollo shop in Paraguay and Barakat Import Export Ltd. in Chile—to its list of Specially Designated Global Terrorist entities. Targeting a “key terrorist financier,” the Treasury designation aimed to disrupt the Barakat network by denying these companies access to their US-based re-exporters, pressuring local governments to take action of their own targeting this hybrid criminal-terrorist network, and signaling such behavior was now in the US government’s crosshairs.79 Shaking the tree, as law enforcement officials would describe it, often forces criminals to scramble about to protect other assets from being targeted and can provide valuable intelligence if authorities are properly prepared to watch how members of the criminal network react to any given public action.

  And react they did. A host of other members of the Hezbollah network stepped in to assume responsibility for various activities, from running parlor-meeting fundraisers to extorting businessmen with Mafia-style strong-arm tactics to carrying out counterintelligence activities and overseeing counterfeit currency operations, drug running, and more. Two of Assad Barakat’s brothers, Hamzi and Hatim, took over Assad’s Galeria Page storefront and his business activities in Chile. His cousin Muhammad took over responsibility for the Barakat network’s overall finances in the tri-border area, held fundraisers for Hezbollah, and arranged the transfer of funds to the Middle East. Barakat’s successor as leader of the tri-border Hezbollah network, Ali Muhammad Kazan, additionally helped oversee the group’s counter-intelligence activities in the region. Muhammad Chamas and Saleh Fayyad served as counterintelligence operatives providing “security information” on local residents. Chamas, who was also Mohammad Abdallah’s private secretary, maintained daily contact with Hezbollah officials in Lebanon and Iran. Meanwhile, Assad Barakat’s assistant Sobhi Fayyad served as the local Hezbollah community’s liaison to the Iranian embassy in Buenos Aires, met Hezbollah leaders in Lebanon and Iran, and was a “professional” Hezbollah operative who received military training in the group’s camps in Iran and Lebanon.80

  The four-story Galeria Page shopping center in Ciudad del Este, which Abdallah and members of the Barakat network co-owned with other Hezbollah operatives, was described by Argentine police as the “regional command po
st for Hezbollah.”81 The shopping center, the US Treasury Department concurred, “is locally considered the central headquarters for Hizballah members in the TBA.” Mohammed Abdallah not only maintained ties to senior Hezbollah officials and met with members of Hezbollah’s security division, according to the US government, but managed day-to-day operations at Galeria Page and paid a regular quota to Hezbollah from profits earned at the shopping center.82

  Coordinating Sleeper Cells

  According to telephone call records obtained by Argentine intelligence, by fall 1993 Assad Barakat was in touch with Samuel Salman el-Reda, a “Hezbollah contact person” who had lived in Foz but also maintained a residence in Buenos Aires, and where he lived for long periods over the seven years before the AMIA attack.83 Based on phone call records and the protected testimony of a Hezbollah operative referred to in the AMIA indictment only as “Witness A,” authorities pieced together evidence pegging el-Reda as “an active member of Hezbollah” who coordinated the activities of the Hezbollah attack squad in Buenos Aires and maintained communication with Hezbollah leaders in Lebanon and the operation’s logistics command in the tri-border area.84

  El-Reda, prosecutors concluded, “was the coordinator of [Hezbollah] sleeper cells” in Buenos Aires and the tri-border area.85 As the AMIA plot took shape, el-Reda and Assad Barakat kept in touch. Investigators tracked additional telephone calls between the two in January and June 1994.86 Investigators determined further that it was around 1993–94 that el-Reda settled in Foz, “from where he provided all the necessary support to perpetrate the terrorist attack against the [AMIA] building.”87

  Samuel el-Reda was first radicalized within the extremist, pro-Iranian community Mohsen Rabbani built around himself and the al-Tauhid mosque. A Lebanese citizen born in San Andres, Colombia, el-Reda reportedly left Colombia after getting involved in a “huge street fight” that led to two murders. He moved to Argentina around 1987, seven years prior to the AMIA bombing, and married Silvina Gabriela Sain, an Argentine woman from a Lebanese family, two years later. After a brief return to Colombia, el-Reda moved his family in September 1992 to the tri-border area, where they lived on the more comfortable Brazilian side of the bridge. El-Reda commuted to his job in Ciudad de Este at a business in the Galeria Page shopping center. While in the tri-border area, he developed a reputation as an “Arab from the mafia” and a Hezbollah member.88