Blood diamonds and billions – inside a Hezbollah money laundering gang

The US is tightening its grip on Nazem Ahmad — an art-collecting alleged diamond smuggler accused of financing Hezbollah — and those who worked with him. As part of this crackdown, it has sanctioned individuals and businesses in a trail leading all the way to South Africa.

South Africa has emerged as a key cog in a global web of businesses and individuals allegedly involved in shipping precious gems, diamonds, artworks, and luxury goods to benefit an individual who the US has labelled a “global terrorist.”

Giving some insight into the extent of its activities, the US has alleged that between January 2020 and August 2022 entities working to benefit Ahmad were involved in more than $400-million – R7-billion — worth of financial transactions.

The US government previously listed Ahmad as “a Specially Designated Global Terrorist… for having materially assisted” Hezbollah (also sometimes spelt as Hizballah), which it classifies as a terrorist organisation and which is a political party in Lebanon.

Ahmad’s whereabouts are unknown.

The US government publicised South Africa’s links to his network this week, barely two months after this country was put on the Financial Action Task Force’s “greylist.”

Business Maverick’s Tim Cohen previously wrote that this meant South Africa “has shortcomings in tackling illicit financial flow, which may raise costs for banks and asset managers.”
Blood diamonds and Bedfordview

In matters linked to Ahmad, the US has been on his trail for years.

It previously offered a $10-million reward for information that could disrupt Hezbollah’s financial networks, saying: “Ahmad is one of [its] top donors, generating funds through his longstanding ties to the “blood diamond” trade. Hizballah uses Ahmad and his companies to launder substantial amounts of money bound for the terrorist group.”

This week the US Department of the Treasury’s Office of Foreign Assets Control announced sanctions against 52 individuals allegedly linked to Ahmad and from, or based in, several countries including the UK, Côte d’Ivoire, Belgium and South Africa.

Diamond companies in Bedfordview, Johannesburg, were flagged.

In a statement announcing the sanctions on Tuesday 18 April, the US’s Treasury Department said: “With operations in Beirut, Lebanon; Dubai, United Arab Emirates; Johannesburg, South Africa; and Hong Kong, Nazem Said Ahmad directs a global network of 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 also uses aliases, front companies, and fraudulent paperwork to enable Nazem Said Ahmad to purchase or consign high-priced luxury goods and artwork from auction houses and galleries worldwide.”

Artful dodger

It undervalued invoices for imported goods and cleared bulk consignments through seaports thereby “leveraging” Hezbollah’s influence at the ports.

The network, it was also alleged, used an intricate web of companies to get hold of valuable artworks from the US to secure US-based diamond-grading services while concealing Ahmad’s involvement.

“Since 2012, Nazem Said Ahmad has acquired over $54-million in works of art from major auction houses, galleries, and exhibitions, or even directly from artists’ studios, often concealing his beneficial ownership by having official invoices drawn up using cover companies, family members, or business associates as the owners,” the US Treasury Department statement said.

Ahmad, according to the UK government, also had “an extensive art collection” there and had done business with UK-based artists and art galleries.
Sanctions and SA businesses

The US Treasury Department statement listed several individuals and companies with alleged ties to Ahmad as being linked to this country — Daily Maverick has decided not to identify them by name yet as they have not been given a chance to reply to allegations.

It said:

– A relative of Ahmad’s “handles many of his… business affairs in South Africa.” This relative was a director of a diamond company and handled another such company, both based in Bedfordview.
– An individual who acted as Ahmad’s main international accountant was “the central manager of financial ledgers detailing the network’s operations in Hong Kong, the United Arab Emirates, and South Africa.” It was also alleged this individual “facilitated payment for and shipment of art… purchased from major auction houses and galleries.”
– A dual Canadian-South African originally from Lebanon, along with associated businesses, “acted as a hub for art and luxury goods to be sold at or purchased from Hong Kong-based auction houses or other vendors in the Pacific, including acting as a courier for a work of art purchased on behalf of Nazem Said Ahmad, personally transporting the item from a Hong Kong auction house to Lebanon.”
– A Lebanese individual who was the co-director of a South African diamond company handled other businesses in South Africa.

Conspiracy and UK crackdown

Aside from sanctions imposed on businesses and individuals allegedly linked to him, Ahmad himself faces mounting legal action.

On Tuesday 18 April, an indictment against him and eight others was unsealed in the US — they face charges including conspiring to defraud the US and foreign governments, evading US sanctions, and money laundering.

“The government obtained seizure warrants for millions of dollars in assets that include a diamond ring, cash in an account and artwork,” a US Department of Justice statement said.

According to the statement, one accused in the matter was arrested in the UK on Tuesday 18 April.

That same day the UK announced it was sanctioning Ahmad.

“Nazem Ahmad has been sanctioned as part of continued efforts to prevent terrorism in the interests of national security. The move will also protect the integrity of the UK economy from terrorist financing threats,” the UK government said in a statement.

“All assets and economic resources belonging to Ahmad in the UK have been frozen and no UK person may do business with him or any of the companies he owns or controls.”
Previous Hezbollah-SA links

Another case links South Africa to Hezbollah.

Daily Maverick previously reported that in February 2018, Usama Hamade, a citizen of both Lebanon and South Africa, and his brother Issam, were arrested in Gauteng for allegedly conspiring to export drone parts from the US for Hezbollah.

The brothers were extradited to the US where Issam Hamade was sentenced to time served.

“According to evidence presented by the government, the ultimate beneficiary of [Usama] Hamade’s actions was the designated foreign terrorist organization Hezbollah,” the US Immigration and Customs Enforcement said in a statement in 2021.

That year the US government sent Usama Hamade back to South Africa after he served 42 months in jail there.

Source: msn