Art & Diamonds Money Laundering Network

Posted

In a coordinated action, Treasury's Office of Foreign Assets Control (OFAC) has designated an extensive international money laundering and sanctions evasion network, consisting of 52 individuals and entities across nine countries.

The network facilitated the payment, shipment, and delivery of cash, diamonds, precious gems, art, and luxury goods for the benefit of Hizballah financier and Specially Designated Global Terrorist Nazem Said Ahmad, who was designated on December 13, 2019, for providing material support to Hizballah.

This designation is part of a joint effort with the Department of Homeland Security, the Department of State’s Rewards for Justice program, and the United Kingdom to disrupt the activities of the network, which includes dozens of individuals and their associated companies involved in helping Nazem Said Ahmad evade U.S. sanctions and maintain his ability to finance Hizballah and his lavish lifestyle.

“The individuals involved in this network used shell companies and fraudulent schemes to disguise Nazem Said Ahmad’s role in financial transactions,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Luxury good market participants should be attentive to these potential tactics and schemes, which allow terrorist financiers, money launderers, and sanctions evaders to launder illicit proceeds through the purchase and consignment of luxury goods.”

The State Department is re-advertising its reward offer of up to $10 million for information on Hizballah’s financial mechanisms, including Ahmad.

The Treasury has previously documented the money laundering and terrorist financing risks associated with the trade of works of art in its February 2022 report titled “Study of the Facilitation of Money Laundering and Terror Finance Through the Trade of Works of Art” and the October 2020 OFAC Art Advisory.

Global Network Cited

Nazem Said Ahmad directs a global network with operations in Beirut, Lebanon; Dubai, United Arab Emirates; Johannesburg, South Africa; and Hong Kong, which takes advantage of the permissive nature of the global diamond, precious gems, and art market.

The network also uses aliases, front companies, and fraudulent paperwork to enable Ahmad to purchase or consign high-priced luxury goods and artwork from auction houses and galleries worldwide. Furthermore, it leverages Hizballah’s influence at seaports of entry to move assets into Lebanon without paying the applicable taxes and duties.

Ahmad and his associates have utilized the luxury goods and art market to move funds out of Lebanon, capitalizing on schemes to overvalue and undervalue artwork and exploiting the industry’s practices. Since 2012, he has acquired over $54 million in works of art, often concealing his beneficial ownership by using cover companies, family members, or business associates as the owners.