http://www.businessweek.com/news/2011-02-10/lebanese-canadian-bank-linked-to
-drugs-terror-group.html

 


Lebanese Canadian Bank Linked to Drugs, Terror Group


February 10, 2011, 10:52 AM EST 

By Justin Blum 

(Updates with bank having no immediate comment in last paragraph.)

Feb. 10 (Bloomberg) -- The Lebanese Canadian Bank SAL facilitated money
laundering by an international drug- trafficking network and has ties to the
terrorist organization Hezbollah, according to the U.S.

The Beirut, Lebanon-based bank, through management complicity and failure of
its internal controls, has been used "extensively" by people associated with
the network to move as much as $200 million per month in proceeds from
illicit drug deals, according to a Treasury Department statement today. The
department filed a notice proposing banning U.S. financial institutions from
opening or maintaining certain accounts for the bank.

The closely held bank provides corporate, retail and investment products and
maintains correspondent accounts with banks worldwide, including U.S.
financial institutions, according to the Treasury Department.

"This action seeks to protect the U.S. financial system from the illicit
proceeds flowing through LCB and to deprive this international narcotics
trafficking and money laundering network of its preferred access point into
the formal financial system," said Stuart Levey, the Treasury Department's
undersecretary for terrorism and financial intelligence, in the statement.
"Any financial institution that collaborates in illicit conduct on this
scale risks losing its access to the United States."

Ayman Joumaa, a "drug kingpin," along with his Lebanon- based network and
other individuals, have used the bank to launder narcotics proceeds,
according to the Treasury Department. Hezbollah received financial support
from Joumaa's network and bank managers are linked to officials of the
terror group, according to the department.

Bank Chairman Georges Zard Abou Jaoude didn't immediately return a call to
his office seeking comment.

--With assistance from Massoud A. Derhally in Beirut, Lebanon. Editors: Jim
Rubin, Brigitte Greenberg.

To contact the reporter on this story: Justin Blum in Washington at
[email protected]

To contact the editor responsible for this story: Mark Silva at
[email protected]

 



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