Diamond World Rocked by Hezbollah Blacklist
The diamond world has been rocked by the US Treasury Department’s blacklisting on Tuesday of companies with alleged links to the financing of the Hezbollah terror group, in Lebanon.
A total of 52 individuals and entities, including a few diamond companies, appear on the Office of Foreign Assets Control (OFAC) list, accused of supplying cash, precious gems, art, and luxury goods to the group’s financier Nazem Said Ahmad.
The value of artwork and diamond-grading services transacted through the US financial system has been put at $160m. Blacklisted companies with diamond links are listed later in this article.
In a coordinated move, the US Department of Justice has charged Ahmad and eight co-defendants with conspiring to defraud the US and other governments, evade U.S. sanctions and customs laws and conduct money laundering transactions.
Ahmad is, it says, a “diamond smuggler and art collector [who] dealt in millions of dollars of goods and services in violation of the global terrorism sanctions regulations”
In one case Ahmad and/or co-conspirators are alleged to have submitted a 45-carat diamond – valued at $80 million – to a diamond grading lab in New York, where they made almost 500 other submissions.
Ahmad, a Belgian-Lebanese citizen, is a high-profile art collector – owning masterpieces by Pablo Picasso, Antony Gormley and Andy Warhol – and diamond dealer.
e was designated by the US as a “global terrorist” in 2019 for channelling millions of dollars to Hezbollah, the Shia Islamist organization dedicated to eliminating the State of Israel.
The Treasury Department says Ahmad used a a global network of shell companies and fraudulent schemes involving family members, associates, and companies that take advantage of the “permissive nature” of the global diamond, precious gems, and art market to facilitate payment for, and shipment and delivery of, luxury goods.
“The network utilizes legal and illegal arrangements to coerce both witting and unwitting participants into falsely engineering certificates, which are required under the Kimberley Process, to manipulate diamond prices and taxes, and to give their business the appearance of legitimacy,” it says.
Among those blacklisted as key facilitators and associates by OFAC are:
Firas Ahmad, Nazem Said Ahmad’s son, who handles many of his father’s business affairs in South Africa. Firas Ahmad is the director of South Africa-based diamond company Mega Gems (PTY) LTD (Mega Gems) and controls another diamond company, Thula Uzwe Trading, also in South Africa.
Nazem Said Ahmad’s business associate Ali Osseiran, who directs Dubai-based companies, Best Diamond House DMCC and G and S Diamond FZE.
Bassem Murad a Belgian national who owns, controls, or directs Antwerp-based M.S.D., South Africa-based MSD Capital (PTY) LTD, Dubai-based MSD DMCC, and South Africa-based MSD SPRL Diamond Trading.
It also lists as “additional businesses”:
Dubai-based diamond company Amana Diam DMCC, which was used as a pass-through business in a money laundering scheme on behalf of Rami Baker.
And Antwerp-based diamond company Helics Gemb BVBA, which acted as a broker for Amana Diam DMCC for sales of over $18 million in the first half of 2022 and was likely engaged in suspicious trades in diamonds.
According to indictments in the Eastern District court of New York, Ahmad and his co-conspirators relied on a complex web of business entities to obtain valuable artwork from US artists and art galleries and to secure US-based diamond-grading services all while hiding Ahmad’s involvement in and benefit from these activities.
“Approximately $160m worth of artwork and diamond-grading services were transacted through the U.S. financial system,” says the Justice Department in a statement.
They allegedly conspired to violate and evade U.S. sanctions by obtaining grading determinations and other services from an unnamed US-based diamond grading company (Diamond Grading Company-1).
The Justice Department said: “The services of Diamond Grading Company-1, which were secured through multiple entities operating for Ahmad’s benefit, were valuable to the defendants because the services provided can affect the sales price of those diamonds and thus increase the amount that Ahmad can receive for the sale of his property.
“Collectively, the defendants and other conspirators sent approximately 482 diamond submissions to Diamond Grading Company-1 facilities after Ahmad was designated by OFAC in December 2019.
“The total weight of the diamonds submitted and graded post-sanctions was approximately 1,546 carats.
“For example, on or about March 18, 2021, an entity operating for the benefit of Ahmad shipped an approximately 45-carat diamond – valued at $80m – to a facility belonging to Diamond Grading Company-1 in New York.
“Following the receipt of services from Diamond Grading Company-1, the 45-carat diamond was exported from the United States on April 26, 2021, back to the same entity.”
Source: idexonline
