Tri-border Governments Take Measures against Criminal Organization Linked to Hezbollah

At Paraguay’s request, Brazilian police arrested Assad Ahmad Barakat, leader of the Barakat Clan. In July, Argentina froze the group’s assets for alleged money laundering and terrorism financing.
Eduardo Szklarz/Diálogo | 4 October 2018

Transnational Threats

Lebanese national Assad Ahmad Barakat, alleged Hezbollah financier in the tri-border area, arrives at the courthouse in Asunción, Paraguay, following his extradition from Brazil, November 18, 2003. (Photo: AFP)

For decades, Lebanese terrorist organization Hezbollah operated relatively freely in the tri-border area of Argentina, Brazil, and Paraguay. Governments in the region are now taking concrete measures against the Iran-backed Shiite militia.

On September 21, 2018, the Brazilian Federal Police detained Lebanese shopkeeper Assad Ahmad Barakat, leader of an alleged criminal organization known as the Barakat Clan. In 2004, the U.S. Department of Treasury designated Barakat as one of the most prominent and influential members of Hezbollah. Regional authorities suspect his organization uses narcotrafficking and smuggling resources to fund the terrorist group.

Authorities arrested Barakat in Foz do Iguaçu, Parana state, Brazil, at the request of the Paraguayan court, which issued an international arrest warrant against him for false representation to obtain a passport, August 31st. “Assad Barakat’s arrest shows progress in the fight against terrorism in Latin America,” Luis Fleischman, professor of sociology at Palm Beach State College and security consultant at the Center for Security Policy in Washington, D.C., told Diálogo.

“The fight against terrorism in Latin America isn’t just about countering violent elements, but also drug trafficking and economic illicit activities that fund terrorism,” Fleischman said. “The regional contribution to terrorism is basically illicit funding.”

Frozen assets

Barakat’s arrest was the last chapter in a series of measures regional authorities took against the Barakat Clan. On July 13th, the Argentine Financial Information Unit (UIF-AR, in Spanish) froze the assets of 14 Lebanese nationals belonging to the organization and residing in the tri-border area.

“The Clan is likely involved in smuggling, counterfeiting money and documents, extortion, drug and arms trafficking, money laundering, and terrorism financing,” UIF-AR stated in a release. “It is suspected that [the group] raises funds for the Lebanese organization Hezbollah.”

According to UIF-AR, Barakat had close ties to terrorist leaders from his center of operations at the Shopping Uniamérica Mall, located in Ciudad del Este, Paraguay. “UIF-AR’s measure is an important sign from one of the three tri-border governments that Hezbollah no longer has impunity,” Emanuele Ottolenghi, senior fellow at the Foundation for Defense of Democracies in Washington, D.C., told Diálogo.

“While it may be a largely symbolic measure [since it is unlikely that the clan members have substantial assets in Argentina], it’s a strong message for Paraguay and Brazil about the magnitude of this threat,” Ottolenghi said. “After all, members of the ring all reside in Paraguay and Brazil. Why then should it only be an Argentine problem?” 

$10 million laundered

According to UIF-AR the 14 people linked to the Barakat Clan recorded multiple entries to Argentina’s neighboring countries. They crossed primarily over the Tancredo Neves International Bridge, known as International Fraternity Bridge, connecting Foz do Iguaçu in Brazil with Puerto Iguazú in Argentina.

Authorities brought Lebanese national Ahmad Barakat to the Federal Police station in Foz do Iguaçu, upon his arrest, after the Paraguayan court issued an international arrest warrant, September 21, 2018. (Photo: AFP)

“Once in Argentina, clan members allegedly collected money at a casino in Iguazú for fake prizes totaling more than $10 million, without declaring the funds when crossing the border,” UIF-AR stated, adding it has “clear suspicions about the illicit origin of the money brought into Argentina.” The hypothesis: The Hezbollah-led clan transferred the funds.

“UIF-AR thanks the U.S. government, especially the [Financial Crimes Enforcement Network] led by Kenneth Blanco, for cooperating in this case,” the organization said. “The strategic alliance with the United States in the fight against financial crimes strengthens our efforts at the local level and contributes to the protection of global peace and security.”

Fleischman praised the Argentine government for its fight against corruption. “The Barakat Clan not only transfers money to terrorists abroad, but also commits extortion, narcotrafficking, and criminal activities involving millions of dollars,” the expert said, adding that these activities affect law and order in the country. “This is not only a problem between the United States and international terrorism. These are Argentine and Latin American problems,” he said.

Assad Ahmad Barakat

Neighboring countries joined Argentina into taking measures. On August 28th, the Paraguayan Ministry of Interior announced an investigation to determine the April issuance of a Paraguayan passport to Barakat from the National Police. Barakat is not a Paraguayan citizen. He was granted Paraguayan citizenship in 1989, but the Supreme Court of Justice revoked it in 2013, rendering the passport issuance unlawful.

“I think it’s good for the Paraguayan government to investigate why Assad was issued a passport. This wasn’t the first case. For instance, Venezuela issued passports to Iranian citizens and Hezbollah members, which enabled them to move freely in the region,” Fleischman said.

On August 31st, the Paraguayan court issued an international arrest warrant for Barakat. The Brazilian Supreme Federal Court authorized his arrest on September 19th, two days before Brazilian authorities captured him. In 2002, the Barakat Clan leader was arrested in Brazil and extradited to Paraguay, where he spent six years in prison for tax evasion and criminal association. His connection to terrorism could not be proved.

In 2004, the U.S. Department of the Treasury designated Barakat as a terrorist and key Hezbollah financier. The U.S. Treasury also sanctioned his brothers Hamze and Hatim Ahmad Barakat in 2006. Brazilian authorities arrested Hamze Barakat in 2013 for fraud in the textile business in Curitiba, Paraná state. Police later released him due to lack of evidence. Since then, the Barakats have been conducting business through different companies in the tri-border area.

Hezbollah threat

Today, Hezbollah represents a threat to Latin America and the world, analysts say. “In the region, Hezbollah works with local organized crime, facilitating their work while bribing politicians and officials. Therefore, Hezbollah is locally involved in crime, smuggling, violence, and corruption,” Ottolenghi said. “Their networks can also be activated to facilitate support and cover for terrorists sent to the region to perpetrate attacks, as they did in 1994 with the bombing of the Argentine Israelite Mutual Association [AMIA, in Spanish].”

The Argentine court accused eight Iranian officials of planning—and Hezbollah of executing—the attack against AMIA in Buenos Aires that killed 85 people and injured about 300, July 18, 1994. “Globally, Hezbollah is involved in all sorts of criminal activity and trains militias in the Middle East, while fighting along with Iran and the Syrian regime of Bashar al-Assad,” Ottolenghi said. “Ultimately, Hezbollah plans terrorist attacks. It did so several times over the years in several places, including Europe, Latin America, and North America.”

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