Lebanese Collector Charged in Multi-Million Dollar Art and Diamond Scheme Used to Fund Hezbollah

KEY TAKEAWAYS
Collector Nazem Said Ahmad and eight others have been charged with using a complex network of business entities to illegally import and export over $440 million worth of art and diamonds, which were used to fund Hezbollah, a Lebanon-based terrorist group.
Ahmad and his partners allegedly used the network to procure valuable artwork from American artists and art galleries and secure US-based diamond-grading services, despite being barred from conducting business with US entities and persons.
The US government has obtained seizure warrants for millions in assets in artwork, cash, and a diamond ring, and while one defendant has been arrested, the others, including Ahmad, are believed to reside outside the United States and remain at large.
The indictment highlights the potential risks and illicit activities associated with the art and diamond markets, urging governments and industry participants to remain vigilant in order to prevent such markets from becoming a haven for illicit financial activity.
Ahmad's once-celebrated art collection, which includes works by prominent artists, has come under scrutiny due to the allegations.

 

Collector Nazem Said Ahmad and eight others face charges for breaching and circumventing US sanctions by illicitly importing and exporting more than $440 million in art and diamonds. 

According to federal prosecutors, the group participated in money laundering, defrauding the US and other governments, circumventing customs regulations, and backing the Lebanon-based terrorist organization Hezbollah.

Intricate Business Structure

Since 2019, Ahmad has been under US sanctions for his significant financial contributions to Hezbollah through money laundering operations.

Despite being prohibited from engaging in business with US individuals and entities, Ahmad and his associates reportedly employed an elaborate network of business structures to acquire valuable artwork from American artists and galleries while also utilizing US-based diamond-grading services.

The Treasury Department discovered a network of 52 individuals and organizations spanning nine countries that Ahmad allegedly used to coordinate payments, shipments, and deliveries of cash, diamonds, precious gems, artwork, and luxury items for purported money laundering and sanctions circumvention.

According to the indictment, after being sanctioned in 2019, Ahmad and his collaborators acquired art valued at over $1.2 million from the US.

Moreover, diamonds estimated to be about 1,546 carats and valued at over $91 million reportedly moved through Ahmad’s businesses following the implementation of sanctions.

Relatives and Associates Face Charges

Those facing charges for allegedly aiding Ahmad consist of his son, daughter, brother-in-law, and several associates.

Ahmad’s daughter, who runs galleries in Abidjan, Côte d’Ivoire, and Beirut, Lebanon, disputes the allegations and describes her father’s supposed connections to Hezbollah as “implausible.”

Brian E. Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, emphasized the importance of luxury good market participants being attentive to potential tactics and schemes that allow terrorist financiers, money launderers, and sanctions evaders to launder illicit proceeds through the purchase and consignment of luxury goods.

Art Market’s Role in Illicit Financial Activity

Brian E. Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, emphasized the importance of luxury good market participants being attentive to potential tactics and schemes that allow terrorist financiers, money launderers, and sanctions evaders to launder illicit proceeds through the purchase and consignment of luxury goods.

Assets Seized and Defendants at Large

The US government has obtained seizure warrants for millions in assets in artwork, cash, and a diamond ring.

While one of the defendants, Sundar Nagarajan, was arrested in the United Kingdom, the eight others, including Ahmad, are believed to reside outside the United States and remain at large.

Celebrated Art Collection Tainted by Allegations

Ahmad’s once-celebrated art collection has come under scrutiny due to the indictment. His collection includes works by Jean-Michel Basquiat, Ai Weiwei, Thomas Heatherwick, and Marc Quinn.

The indictment did not identify the names of artists and galleries involved, only referring to them by location.

The indictment is a stark reminder of the potential risks and illicit activities associated with the art and diamond markets, urging governments and industry participants to remain vigilant in order to prevent such markets from becoming a haven for illicit financial activity.

Craig Miller

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