I’ve always been skeptical of the Scary Car Broker Plot–the suit against a bunch of used car brokers and others based on the claim that the entire thing is a money laundering operation for Hezbollah. At the core of the complaint is the allegation that entities that weren’t listed on Treasury’s sanctions list until early last year transferred money between 2007 and early last year (that is, until they were listed) to purchase used cars in the US.
Between approximately January 2007 and early 2011, at least $329 million was transferred by wire from accounts held in Lebanon at LCB, Federal Bank of Lebanon (“Federal Bank”), Middle East and Africa Bank (“MEAB”), and BLOM Bank (“BLOM”) to the United States through their correspondent bank accounts with U.S. financial institutions located in the Southern District of New York and elsewhere for the purchase of used cars.
But one of the main targets of the complaint–one they don’t actually get to until page 46 of a 65-page complaint–are thirty seemingly Lebanese-American owned car brokers in the US.
In describing these brokers, the complaint seems to offer little perspective on how this business–a perfectly legitimate business designed to get clunkers into countries where they still have market value–normally operates.
The businesses of these Car Buyers typically have little or no property or assets other than bank accounts that are used to receive wires from overseas to buy cars, and to purchase used cars at auction. These cars are then transported to shipping ports, where they are shipped to West Africa. The Car Buyers typically do not have offices, car lots, or an inventory of used cars other than cars that are in transit to the ports. Some of the Car Buyers purchase cars for their own account, but others simply retain a fee of a few hundred dollars for each car that they buy.
That is, the complaint suggests that the marginal nature of these businesses, by itself, makes these businesses sketchy. But it offers no proof for that fact (and I believe that a lot of these businesses are sketchy by design–they’re the automotive equivalent of recyclers who pick through trash to try to find things with ongoing value).
In the section laying out the individual descriptions of the middle men who dealt with the car brokers, there are a lot of assertions of direct and more attenuated ties to Hezbollah with little or no proof.
Nevertheless, the goal of this complaint is to seize money from the auto brokers, about whom the complaint makes no claims of knowledge of ties to Hezbollah.
Since the complaint, I’ve just been assuming that maybe the government has better evidence to tie the American businesses they’re effectively shutting down to Hezbollah (nevermind that the ties have always been closer to Colombian drug cartels).