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FOR IMMEDIATE RELEASE
Monday, May 10, 2021
Dual Lebanese-U.S. Citizen Pleads Guilty to Money Laundering and Tax Offenses
ALEXANDRIA, Va. – A dual Lebanese and U.S. citizen who resides in Vienna, Virginia pleaded guilty today to participating in a conspiracy to launder money as part of a decade-long scheme to ship electronics equipment to a Hizballah-owned television station in Lebanon. In addition, the defendant and her husband pleaded guilty to conspiring to commit tax fraud by concealing income from her employment in Virginia.
“For over a decade, Racha Farhat participated in a conspiracy to purchase electronics equipment using the proceeds of illegal activity, which benefited a Lebanese television station owned by Hizballah,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Working with our law enforcement partners, we will bring to justice those who use the U.S. financial system to further the interests of prohibited entities that engage in unlawful activities abroad.”
According to court documents, Racha Farhat, 44, began laundering money in 2010 and continued to do so until the time of her arrest in February 2021. The scheme involved Farhat receiving money from an unindicted co-conspirator (UCC-1) in Lebanon, which she used to purchase electronics equipment in the United States. Farhat then shipped the items purchased by herself and other co-conspirators overseas, primarily to Lebanon, where UCC-1 supplied at least $175,000 worth of goods to Al Manar TV. Al Manar TV is a Lebanon-based TV station owned and operated by Hizballah. Both Hizballah and Al Manar TV are prohibited entities for a U.S. person to conduct business with under the International Emergency Economic Powers Act (IEEPA).
https://www.fdd.org/analysis/2019/06/21/suspected-hezbollah-financier-extradited-to-the-u-s/
Paraguayan authorities extradited Nader Mohamad Farhat yesterday to Miami, where he faces criminal charges of money laundering. Farhat’s case promises to reveal the intricacies and magnitude of trade-based money laundering in the Tri-Border Area (TBA) of Argentina, Brazil, and Paraguay, including the role played by Lebanese Hezbollah.
A Miami federal court will decide whether Farhat will be tried there or in New York, where he faces similar charges. In the case before the New York court, Farhat is an alleged co-conspirator in a case involving another Paraguayan national of Lebanese origin, Mahmoud Ali Barakat, and three other defendants who are accused of assisting in the laundering of drug monies from inside the U.S.
Court documents refer to Farhat as a “known money launderer for narcotics organizations and other illicit organizations,” while media reports allege a possible connection to Hezbollah. According to a Department of Justice press release announcing the indictment of his co-conspirators, Farhat participated in “an international money laundering scheme relying on the complexities of global trade, and the use of … businesses here in New York and in Florida, to launder millions of dollars for transnational drug traffickers and other bad actors.” (The cases have since been merged.)
These cases highlight how Latin American drug cartels and other organized crime groups continue to exploit complex, trade-based schemes to launder their ill-gotten gains. Critically, many of the companies involved are in the United States, exposing the U.S. financial system to considerable reputational risk.
The case also reveals the growing importance of the TBA to this type of financial crime. Almost a decade ago, a large Drug Enforcement Administration investigation exposed the connection between Latin American drug cartels and Hezbollah financiers. The investigation focused on the Lebanese Canadian Bank and revealed Hezbollah’s use of extensive trade-based money laundering networks in Colombia and Venezuela, which laundered cartel drug money through West Africa and used car businesses in the United States before repatriating the funds to the cartels through Lebanese-based financial institutions. . .