Hezbollah: Party of Fraud

How Hezbollah Uses Crime to Finance Its Operations

Courtesy Reuters

In June, Lebanon’s new prime minister, Najib Mikati, announced the formation of a government dominated by members and allies of the Shiite terrorist organization Hezbollah. The creation of the new government has made Hezbollah the most dominant political force in Lebanon just six years after the “Cedar Revolution,” which placed the group on the defensive and forced its Syrian patrons to leave the country. With control of the Lebanese government, a vast social-service network, an army of soldiers and operatives, and an arsenal of more than 40,000 rockets, Hezbollah has arguably never been more powerful.

Hezbollah would not have achieved its current stature without the assistance of its creator and chief sponsor, Iran. Since founding Hezbollah in 1982, Iran has armed, funded, and trained the organization, transforming it into a potent terrorist and fighting force. Yet Hezbollah has not relied entirely on Iran to finance its operations. Instead, it has raised funds through criminal activities, including counterfeiting currencies and goods, credit-card fraud, and money laundering. In 2002, for example, Hezbollah operatives in North Carolina were convicted for smuggling cigarettes across state lines and sending a significant portion of their profits -- estimated to be more than $1.5 million -- back to their commanders in Lebanon.

This high-profile case first alerted many to the global extent of Hezbollah’s criminal operations. But since then, Hezbollah’s criminal network has grown in size, scope, and savvy. Wary of the instability plaguing its patrons in Tehran since the Green Movement uprising in 2009, Hezbollah has expanded its illicit activities to gain greater financial independence (an expansion sure to continue following this year’s uprising in Syria, Hezbollah’s other major benefactor). A series of international investigations into Hezbollah’s criminal activities over the past several years has revealed that the organization has developed a far more sophisticated, organized, and global crime network. This system has helped sustain the organization in spite of the challenges confronting Iran and Syria, bringing in tens of millions of dollars in profit each

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