Cigarette Smuggling Linked to Terrorism
Prosecutors were able to prove that profits from the venture were funneled to high-ranking Hezbollah leaders. And Hammoud was caught on wiretaps speaking on the telephone with Hezbollah's military commander in Lebanon, Sheik Abbas Harake, according to trial testimony.
In another case in September, Hassan Moussa Makki, 41, a key player in a multimillion-dollar interstate cigarette smuggling ring, pleaded guilty in Michigan to providing material support for terrorism and participating in a racketeering conspiracy. Prosecutors said he also funneled money to Hezbollah.
Makki, a native of Lebanon, was one of 12 people indicted last year in the scheme to buy low-tax cigarettes in North Carolina and sell them in Michigan. He was sentenced to 57 months in prison.
Law enforcement sources said the terrorist links are established in these and other ongoing investigations through wiretaps and background intelligence investigations and by running the traffickers' names and those of their associates through CIA, FBI and Homeland Security databases. When a terrorist tie is suspected, the cigarette-trafficking probe becomes a joint investigation with one of 66 Joint Terrorism Task Forces across the country. The task forces, run by the FBI, are composed of federal, state and local law enforcement officials.
Paul J. McNulty, the U.S. attorney in Alexandria, last year charged 10 people with possession and distribution of contraband cigarettes, wire fraud and money laundering as part of a scheme to smuggle more than $2 million in cigarettes bought in Virginia to New York. A man whose name came up in that investigation was arrested in Detroit carrying hundreds of thousands of dollars in wire transfer receipts showing payments to people associated with Hezbollah.
In an interview, McNulty declined to comment on terrorist links in that case. But he said the ATF and other law enforcement agencies are taking cigarette smuggling "more seriously than ever."
"We are pursuing cases such as cigarette smuggling because of the possibility that proceeds from that crime could end up in the hands of terrorists," McNulty said.
He added that the Charlotte case made law enforcement officials more attentive to cigarette smuggling as a key source of financial support for terrorists.
"There are other sources, but this is the one that has gotten the attention of law enforcement," McNulty said.
Cigarette trafficking is difficult to stop, partly because tobacco is a legal commodity. Smuggling cigarettes becomes a federal crime only when more than 60,000 cigarettes, or 300 cartons, are purchased to avoid payment of state tax, said Jerry Bowerman, chief of the ATF alcohol and tobacco enforcement branch.
McNulty said catching the suspects is extremely labor-intensive.
In his case, he said, New York tax authorities placed advertisements in various newspapers and magazines in the New York City area offering Virginia cigarettes for sale. The ads for A&A Tobacco Wholesale listed a Virginia telephone number to place orders. A Virginia post office box was set up as a billing address. Incoming calls were switched to and recorded by an agent with the New York office of tax enforcement.
An undercover storefront location was established for A&A Tobacco Wholesale by law enforcement personnel in King George County in Virginia, where investigators from the New York tax office posed as employees and filled the cigarette orders.
When prospective cigarette purchasers telephoned the advertised number and placed orders, they were told that the cigarettes being sold would bear counterfeit joint New York State and New York City tax stamps.
© 2004 The Washington Post Company