Second Post in a Two-Part Series on Recent OFAC Designations
As we blogged yesterday, OFAC has been busy. Right before OFAC designated the virtual currency exchange SUEX for allegedly facilitating ransomware payments, OFAC announced another significant but more traditional action on September 17, 2021 by designating members of a network of Lebanon and Kuwait-based financial conduits that fund Hizballah, as well as members of a network of financial facilitators and front companies that operate in support of Hizballah and Iran’s Islamic Revolutionary Guard Corps-Qods Force (“IRGC-QF”). The designated persons are prohibited from transacting with U.S. persons or transacting within the United States, and financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.
In its press release announcing the designation, OFAC noted that “Hizballah continues to exploit the legitimate commercial sector for financial and material support, which enables the group to carry out acts of terrorism and degrade Lebanon’s political institutions.” What stands out here is the designated individuals’ alleged use of gold as a vehicle to move illicit funds through shell companies (for more on the use of gold as a vehicle for money laundering, see here and here).
Two individuals included in OFAC’s recent designations, Meghdad Amini and Ali Qasir, allegedly led a network of “nearly 20 individuals and front companies, located in multiple countries and jurisdictions, that facilitates the movement and sale of tens of millions of dollars worth of gold, electronics, and foreign currency in support of Hizballah and the IRFC-QF.” Further, Omid Yazdanparast, Mohammad Ali DAmirchilu, and Samaneh Damirchilu allegedly smuggled gold and currency from Iran to Turkey on commercial flights operated by U.S.-designated Iranian airline Mahan Air. Once the gold was sold, the proceeds were returned to Iran through the same process and the proceeds were then transferred to Amini and Qasir. Other members of the network – Mostafa Puriya and Hossein Asadollah – allegedly accumulated funds by selling electronics through the Dubai-based company Hemera Infotech FZCO. Finally, China-based Morteza Minaye Hasemi allegedly laundered tens of millions of dollars for the IRGC-QF through foreign currency conversions and gold sales.
The list of newly-sanctioned individuals also includes Hasib Muhammad Hadwan, who is a senior official in Hizballah’s General Secretariat responsible for raising funds from donors outside Lebanon. Hadwan’s superior, Hassan Nasrallah, was designed by OFAC on May 16, 2018 as the leader of Hizballah. Hadwan’s office manager, Ali al-Sha’ir also was designed for accepting financial contributions on behalf of Hizballah since 2000.
OFAC made these designations pursuant to Executive Order (E.O.) 13224, which was initially signed by President George W. Bush in 2001, shortly after September 11. Hizballah was designated pursuant to E.O. 13224 on October 31, 2001 and the IRGC-QF was designated in 2007 for its support of terrorist groups.