Daily Israel Report

Lebanese Bank Denies US Charge of Money Laundering, Terror Ties

A Lebanese bank is accused by the U.S. Treasury of massive money laundering and links to Hizbullah terrorists. The bank denies the charge.
By Chana Ya'ar
First Publish: 2/13/2011, 6:32 PM / Last Update: 2/13/2011, 10:10 PM

Flash 90

The Lebanese Canadian Bank in Beirut is denying charges by the U.S. Treasury that it is involved in money laundering and has ties to the Hizbullah terrorist organization.

The American government accused the Lebanese bank of laundering hundreds of millions of dollars on behalf of Ayman Jouma'a, an alleged drug trafficker. Jouma'a is charged by the U.S. with shipping drugs to the Middle East through West Africa, and to Europe from South America.

The bank was threatened with losing its access to business customers in the United States, according to the announcement by Under Secretary for Terrorism and Financial Intelligence Stuart Levey.

The network set up by Jouma'a "launders hundreds of millions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering involving consumer goods throughout the world," Levey said. "At least one of the individuals involved in this global drug trafficking and money laundering network has worked directly with LCB managers to conduct his transactions."

According to the U.S. Drug Enforcement Administration, which was involved in the investigation, "The Lebanese Canadian Bank for years has participated in a sophisticated money laundering scheme involving used cars purchased in the United States and consumer goods overseas."

In addition, the bank is accused of links to Hizbullah, which appears on the government list of terrorist organizations outlawed in the U.S. American citizens are prohibited from conducting commercial and other financial transactions with individuals and organizations who appear on the list, and whose assets under U.S. jurisdiction are frozen.

The bank's links to the terrorist organization include the Prime Bank in Gambia, according to the U.S.-based CNN news network. Prime Bank, formed in 2009, is "partially owned by a Lebanese individual known to be a supporter of Hizbullah," Levey said.

In June 2008, two Venezuelans of Lebanese descent were also named by the U.S. as Hizbullah supporters and financial backers.

LCB Denies All Charges
Bank chairman Georges Zard Abou Jaoude denied all the charges on Friday, telling CNN the bank adheres to blacklists published worldwide by financial authorities and institutions.

Jaoude said the bank had found one account in Jouma'a's name but that it had not been used in four years. He added that the bank had notified Lebanese regulators about the account, and that the bank cooperates with the country's Special Investigation Commission to counter money laundering.

The bank, which has 35 branches in Lebanon, one subsidiary in Gambia and an office in Canada, has assets of $5.18 billion as of 2009.

"All our books are open to the American Treasury," he said. "We have to clear our name."