Bankrolling the holy war -- from Los Angeles

Most Americans would regard Hezbollah as a distant terrorist group -- not one with a sizeable network of criminal operatives now supporting it from inside the United States.

By Mark Follman
Published May 26, 2005 11:42AM (EDT)

Most mention of Hezbollah, the Islamic militant organization, tends to evoke thoughts of violent conflict in the Middle East: The powerful Shiite political party and militia based in Lebanon, which has strong ties to Iran, has been at war with Israel for decades. The organization is also widely believed to be behind lethal terrorist attacks from Argentina to Africa. But for most Americans, the group remains somewhat of an abstract menace, a terrorist group halfway around the globe -- not one with a sizeable network of criminal operatives now supporting it from inside the United States.

That's exactly what Hezbollah has, according to a report in today's L.A. Times. Matthew Levitt, a former FBI counterterrorism analyst who testified before the Senate Homeland Security and Governmental Affairs Committee on Wednesday, said U.S. intelligence estimates show that Hezbollah receives $20 million to $30 million a year from criminal fundraising activities conducted inside U.S. borders. The organization's members, Levitt testified, are involved in everything from stealing and reselling baby formula to food stamp fraud, grocery coupon scams, false welfare claims, credit card fraud and a wide array of counterfeiting operations.

Southern California, according to law enforcement officials, is a nexus of operations. "There are mounting indicators of the involvement of terrorist groups and their supporters in counterfeiting," said Lt. John Stedman of the Los Angeles County Sheriff's department, who also testified before the Senate committee. Stedman supervises the criminal investigation section of the department's emergency operations bureau. "We have encountered suspects who have shown great affinity for Hezbollah and its leadership," he said. While evidence of suspected terrorist organizations raising money through counterfeiting is "largely anecdotal," according to Stedman, special investigative squads in Los Angeles County have produced 125 arrests, and have turned up $16 million in seized merchandise and another $3.5 million in cash, apparently toward the militant group's cause.

"The United States has asked for a worldwide freeze of Hezbollah's financial accounts," notes the Times report. "But several European nations have refused to do so, citing the group's political wing. U.S. officials believe both groups are controlled by the same leadership, and that the money ultimately helps underwrite terrorism no matter which part of Hezbollah receives it."

Mark Follman

Mark Follman is Salon's deputy news editor. Read his other articles here.

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