Crime

Paraguayan extradited to Miami for key role in huge money laundering schemes, feds say

Ciudad del Este
Ciudad del Este

A Paraguayan businessman accused of moving millions of dollars around the globe for drug traffickers and other criminals with suspected links to the terrorist group Hezbollah was extradited to Miami to face money-laundering charges on Friday.

Before his extradition late Thursday, Nader Mohamad Farhat operated one of the biggest currency exchange businesses in the Tri-Border Area of Paraguay, Argentina and Brazil. At his first appearance in Miami federal court, he was charged with two counts of conspiring to launder money from drug-trafficking proceeds and an unlicensed currency transmitter in the United States, as well as six related money-laundering offenses.

Farhat faces similar charges in New York federal court, but his Miami case must be resolved first before he is transferred there. He is scheduled to be arraigned in Miami next Thursday, when he also has a bond hearing. Prosecutors are seeking his detention, saying he is a risk of flight.

Farhat’s defense attorney, David Raben, declined to comment about the allegations in the indictment. “We plan to vigorously defend out client,” he said after Farhat’s brief appearance in magistrate court Friday.

Farhat, who is of Lebanese descent, and his supporters had been fighting his extradition since his arrest on May 17, 2018, by Paraguayan authorities, who were assisted by Drug Enforcement Administration agents. The Lebanese Embassy in Asuncion, Paraguay’s capital, pressured the Paraguayan government to reject the U.S. request for his extradition, to no avail.

Farhat is perhaps the biggest U.S. target ever to be extradited from the Tri-Border Area, which federal authorities consider a giant washing machine for Latin American drug profits, knockoff consumer goods and terrorist fundraising.

Authorities say vast sums of illicit money move through currency exchange businesses in Paraguay — described recently as a “very notorious area” by prosecutor Michael Thakur in Miami federal court — to finance Hezbollah, a U.S.-designated terrorist group aligned with Iran. The Shiite militant group has gained political and financial influence far beyond its base in Lebanon, extending all the way to South America, New York and Miami.

The Miami indictment charges Farhat with conspiring to commit money laundering between 2014 and 2018, including a series of wire and cash transactions ranging from $41,000 to $221,000 that authorities say he believed were from drug trafficking profits in the United States. Although the indictment does not spell it out, Farhat was the target of a federal undercover investigation, or sting operation. The other conspiracy charge accuses him of moving money through his Paraguayan exchange business to and from an unlicensed currency transmitter in the United States during the same period.

Farhat is connected to a total of four criminal cases in Miami and New York involving extensive wire payments for consumer products as well as drug-related money transfers around the globe, according to federal court records and law enforcement authorities. Among the case investigators are FBI, Homeland Security and other federal agents with the Joint Terrorism Task Force.

Over the past decade, U.S. authorities in Miami and New York have been using money-laundering laws to disrupt Hezbollah’s alleged financial network in the Tri-Border Area, mainly because it is so difficult to prove that the international circulation of money directly supports terrorist activities aimed at Israel and other Western allies. Farhat has not been charged with any terrorism-related offense, only with playing a central role in the money-laundering conspiracies.

In New York, Farhat and one of his customers, Mahmoud Ali Barakat, who imports cellphones from the U.S. to his chain of stores in Paraguay, have been charged with conspiring to commit money laundering by promoting drug trafficking, unlicensed money transmitting and wire fraud. Farhat, also known as “Diesel,” is also charged alone with money laundering stemming from an undercover federal operation involving purported drug proceeds. Barakat, who was extradited last November to New York, was not implicated in that sting.

Barakat only used Farhat’s money-exchange business, Cambios Unique S.A., for his money transfers to the United States. Technically, the company is owned by Farhat’s wife, Renata Wu, according to court records.

Federal prosecutors pointed out in court papers that the Farhat-Barakat case is related to another money-laundering conspiracy indictment filed in New York, charging seven defendants last November. That case accuses two owners of several electronics and mobile-phone businesses in New York and Miami of using the import-export companies to transfer proceeds from financial crimes and the sale of narcotics in the United States to drug dealers in South America.

The lead defendant is Enayatullah Khwaja, a New Yorker who owns and manages Tronix Telecom Corp., and also manages Sysco International, which share a warehouse in Miami. His cousin, Abdulrahman Khwaja, also named as a defendant, is a New Yorker who owns and manages similar businesses, including ISK Corp., Solid Wireless and Solid Electronics in Miami.

Farhat not only has direct links to the Khwaja and Barakat cases, but his currency-exchange business in Paraguay is also implicated in a Miami money-laundering case, according to federal law enforcement sources.

Farhat’s money-exchange company — located in the Jebai Center, the most upscale shopping mall in Ciudad del Este — helped finance the distribution of counterfeit electronics goods as well as wire transfers totaling millions of dollars, the sources said.

One of his customers was Ali Nasreeddine Kassir, a Lebanese-born businessman who was sentenced to two years in prison after pleading guilty in Miami federal court last November to passport fraud and conspiring to commit money laundering. According to his plea agreement, Kassir used his shipping company, An Imex Inc., to import counterfeit Apple iPhone batteries and Samsung car chargers from China. In Miami, Kassir exported the products via direct cargo flights to electronics retailers in Ciudad del Este.

After he was caught orchestrating the illicit shipments in 2015-17, Kassir used another company, 4GGlobal Trading, as a shell in an attempt to evade detection by U.S. Customs and Border Protection, according to a statement filed with his plea deal.

Over a three-year period, Kassir withdrew almost $155 million from his An Imex account, the majority of the funds for wire transfers, the statement said. Yet, despite his business claiming to consist almost entirely of exporting goods to Paraguay, the value of the products he reported to U.S. Customs was about $85 million.

The huge discrepancy totaled almost $70 million in suspicious wire transfers, prosecutors said.

Jay Weaver writes about bad guys who specialize in con jobs, rip-offs and squirreling away millions. Since joining the Miami Herald in 1999, he’s covered the federal courts nonstop, from Elian’s custody battle to A-Rod’s steroid abuse. He was on the Herald team that won the Pulitzer Prize for breaking news in 2001. He and three Herald colleagues were Pulitzer Prize finalists for explanatory reporting in 2019 for a series on gold smuggled from South America to Miami.
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