The Bank, the Car Lots and the Money That Came Back

How American used cars, Cotonou car parks and a Lebanese bank became one civil forfeiture case.

Contents

1. A market worth reaching
2. The people between the payments
3. The bank at the center
4. A sale, then a seizure
5. What $102 million settled
6. The business after the bank
7. Sources

In the government’s table, A & J Auto Sales occupied a few lines: Lansing, Michigan; 193 wire transfers; $10,748,644. The money had come from Lebanese exchange houses and other senders for transactions associated with buying and shipping used cars. Prosecutors put the entries into a much larger civil complaint, one that connected American car buyers with a Lebanese bank and cash moving through West Africa⁴.

A&J’s answer began with geography. It was a Michigan company, it told the court, with no employees, property or bank accounts in New York. Why should a federal judge in Manhattan hear the case? In September 2012, Judge Paul Engelmayer rejected that jurisdictional challenge. The government was pursuing the company’s property, and the alleged payments had passed through New York banks. The ruling kept the case alive; it did not decide whether the laundering allegations were true²⁰.

The route through New York was the point. A business did not need an office in Manhattan for its dollars to travel there²⁰. Nor did a Lebanese bank need to own a car lot to finance purchases in Michigan. The allegations against the Lebanese Canadian Bank, or LCB, depended on those connections: ordinary financial services joining activities that appeared separate when viewed from any one country^3,4. The court’s task at that stage was narrower than reconstructing the entire network. A&J had challenged the court’s authority to proceed. Engelmayer’s answer turned on the difference between jurisdiction over a person and jurisdiction over property. The company’s Michigan address did not remove the alleged New York transactions from the case²⁰.

A market worth reaching

Cotonou’s car trade existed before American investigators began reconstructing this circuit. In a 2006 study, anthropologist Joost Beuving described the Beninese port’s growth during the 1990s into a major market for secondhand vehicles. Cars and small vehicles supplied everyday transport across West Africa. Lebanese traders were one group among many drawn into the business²¹.

The attraction did not make the trade easy^25,26. Beuving’s earlier research described traders short of capital, suffering losses and sometimes going bankrupt, while continuing to hope that the next deal would make their fortunes²⁵. His later work followed Nigerien entrepreneurs building ties with overseas migrants as American vehicles gained a larger place in a market traditionally supplied from Europe²⁶. Those were commercial histories, not findings of criminal affiliation^25,26.

That real market was essential to the prosecutors’ account. Vehicles purchased in the United States could be sold to real customers. The amended complaint described buyers from West African countries, especially Nigeria, paying at Cotonou car parks in local currencies. What investigators then followed was the conversion and return of the proceeds, which they alleged were mixed with money from narcotics trafficking⁴.

Ellissa’s businesses supplied several pieces of the route. According to the complaint, its exchange operated in Sarafand, Lebanon; its group included a Cotonou car park; and its shipping operation brought used vehicles through the port. Hassan Ayash Exchange was another major sender. Prosecutors attributed approximately $141.5 million in car-related US wire transfers to Ayash during 2007 and early 2011⁴.

Across LCB and other institutions, the government alleged at least $329 million in transfers to the United States for used-car purchases over that period^1,4. That was a measure of transactions in the alleged circuit. It was not a calculation of Hezbollah’s income, or proof that cocaine was concealed inside every vehicle⁴. The central allegation was that lawful-looking trade helped conceal and move criminal money^1,4.

Automobiles were well suited to attracting investigators’ attention because they were already a substantial part of international commerce. A later Government Accountability Office review reported that cars, precious metals, textiles and electronics together accounted for about 70 percent of Homeland Security Investigations’ trade-based laundering casework as of 2018. The LCB case belonged to a wider problem: goods could move legitimately while the financing around them required a separate investigation¹⁵.

The people between the payments

The complaint did not stop at columns of transfers. It described Oussama Salhab arriving at Detroit Metropolitan Airport from Beirut on November 22, 2009. He told a border officer he had come on business for Cybamar Swiss, a shipping company headquartered in Redford, Michigan. He carried a business card identifying him as president of STE Marco, another company in the network described by prosecutors. The companies had different jobs: car lots, shipping, regional transport and travel. Investigators’ account joined those jobs through shared operators and contacts, then compared them with people transporting cash. At least 34 individuals identified as cash couriers had also applied for American visas, the complaint said, many describing themselves as car traders or buyers⁴.

Officers examined his laptop. The complaint says they found Hezbollah-related images and other violent material; Salhab said an employee had put the images there. He withdrew his application for admission and departed. Prosecutors later alleged that his business connections extended into a courier network moving large amounts of cash from West Africa to Lebanon. His account of the laptop and their allegation about the network were both part of the story⁴.

Another encounter came in July 2010, when Togolese officers stopped Salhab and an employee near the Ghana border. The complaint says Salhab explained that their cash came from car sales and was traveling onward to Lebanon. Prosecutors alleged he paid Maroun Saade to secure their release. The human link in their reconstruction was a businessman able to speak about shipping, car sales and the movement of money across the same route⁴.

In December that year, three travelers arriving from Benin were arrested at Charles de Gaulle airport while heading toward Beirut. According to the complaint, they carried more than $6.5 million and €48,500 in undeclared cash. One had an Ellissa Megastore business card. Investigators were collecting intersections between the commercial names and the cash, rather than relying only on a map with arrows between continents⁴.

Former undercover investigator Robert Mazur has argued that financial investigations can reach people who remain distant from drugs themselves. Professional launderers have records and relationships that may lead toward an organization’s leadership. That helps explain the significance of a business card, a bank instruction or a repeated contact: each can connect transactions to people who arranged them. It does not make every person appearing in those records a participant¹⁴.

The bank at the center

On January 26, 2011, Treasury designated Ayman Joumaa and people and companies connected to his network under the Kingpin Act^6,7. The agency alleged that Joumaa coordinated large cocaine shipments and laundering operations across several regions⁶. Two weeks later, LCB itself became the target of a different kind of action³.

FinCEN said it had reason to believe the bank was a primary money-laundering concern. Its finding described weak controls over cash deposits and cross-border transfers, inadequate scrutiny of high-risk customers, and alleged managerial complicity. It attributed laundering of as much as $200 million a month to Joumaa’s network—a different figure and time basis from the used-car transfers later set out in the complaint³.

The finding also specified the Hezbollah connection. It alleged that the organization benefited financially from Joumaa’s criminal activity and that Abdallah Safieddine, its Tehran-based envoy, helped Iranian officials gain access to LCB and its managers. Other parts of the account concerned consumer goods purchased in Asia and sold in Latin America. The alleged financial network was larger than the car route that made it most visible³.

LCB was also a real commercial bank with more than $5 billion in assets in 2009^3,18. FinCEN acknowledged that a high volume of its correspondent transactions was probably legitimate. The intervention would therefore affect an institution serving ordinary customers as well as the accounts under scrutiny³. It was directed at a named bank, rather than every Lebanese business or transfer^3,18.

The threatened loss was access^5,7,18. Section 311 allows Treasury to impose special measures against identified risks; it is distinct from an OFAC asset freeze^5,7. In LCB’s case, FinCEN proposed prohibiting covered US institutions from maintaining correspondent accounts for it. The proposal also addressed indirect access through other banks’ accounts¹⁸. Stuart Levey, Treasury’s senior illicit-finance official, described the objective as depriving the network of its preferred entry into formal finance⁷.

Years later, David Asher told Congress he had helped advise the DEA’s strategy against LCB beginning in 2010. His testimony described a deliberate effort to disrupt the institution supporting the alleged network. It was a participant’s account of financial pressure, not a substitute for the complaint or settlement. But the chronology soon showed how quickly a regulatory announcement could reshape a bank’s future¹⁶.

The bank’s geography extended beyond Beirut. FinCEN recorded a controlling stake in Prime Bank in Gambia, for which LCB apparently served as the sole correspondent. It also described an Asia-based supplier with more than 30 LCB accounts and almost daily contact with the institution. The significance was not simply the number of countries on a chart. A customer far from Lebanon could organize commercial payments through the same bank that handled exchange-house deposits. For investigators, the account relationships supplied a way to follow that customer across activities and jurisdictions³.

A sale, then a seizure

LCB’s board decided on March 3, 2011 to sell the business, according to the settlement’s recitals. A June agreement set a $580 million price for substantially all its assets, with Société Générale de Banque au Liban, or SGBL, as buyer. Central-bank approval followed in September. LCB said it ceased banking and entered liquidation for commercial reasons².

The acquisition changed the local banking landscape. Bank of Beirut’s own annual report attributed its fall from seventh to eighth in peer-group assets and deposit rankings to SGBL’s purchase of LCB. Customers, deposits and assets had not simply vanished with the old name. They had been absorbed into another institution³⁰.

Regulators also described changes beyond the sale. In its report on Lebanon’s 2011 economy, IMF staff said work on anti-laundering reforms accelerated after the LCB action. Supervision had strengthened, and a draft law would introduce declarations for cross-border cash. At the same time, the IMF identified wider vulnerabilities: political upheaval, regional uncertainty, dollarization and short-term deposits. The bank case was unfolding inside an already exposed financial system²⁷.

One part of the sale remained apart from the rest: $150 million placed in escrow at Banque Libano-Française in Lebanon^2,13. American investigators could not simply seize that Lebanese account. In August 2012, they instead seized equivalent funds from the escrow bank’s US correspondent account under a statutory substitute-funds provision¹³. The escrow was part of an unfinished commercial relationship: SGBL asserted a $90 million claim, and LCB accepted part of it while reserving its position on the rest². The American action consequently intersected with a dispute about who was entitled to the sale proceeds^2,13. Resolving the forfeiture also required arrangements between seller and buyer².

The government expressly said it alleged no wrongdoing by Banque Libano-Française, SGBL or the American bank holding the correspondent account. The reach of the seizure came from the relationship between the accounts, rather than an allegation that all three institutions had joined the original scheme. Money set aside in a Lebanese transaction had become reachable through the dollar system abroad¹³.

What $102 million settled

On June 25, 2013, Judge Engelmayer entered the LCB settlement. It required forfeiture of $102 million from the seized funds^1,2. SGBL would receive the remaining $48 million, with additional arrangements addressing its claims against LCB². An earlier, separate settlement required Hassan Ayash Exchange to forfeit more than $720,000. The proceedings against other alleged participants continued¹.

LCB did not confess to the government’s account. The settlement recorded its consistent denial of wrongdoing, managerial complicity and involvement in drug, terrorism or laundering activity. It said the bank settled to end the litigation and facilitate completion of the sale. SGBL asserted that it was an innocent purchaser. Those positions survived alongside the substantial forfeiture².

The result sounded different in Beirut and Washington^2,22,23. Business News Lebanon reported that central-bank governor Riad Salameh welcomed closure and a more realistic approach to the local financial sector²². LBCI reported the bank’s chairman and general manager expressing satisfaction, emphasizing its maintained denials²³. The settlement provided room for those responses without turning the case into either a criminal conviction or a judicial declaration that the allegations were false^2,22,23.

The car buyers had their own procedural paths. The September 2012 A&J opinion recorded that Global Shipping had already settled and been dismissed that May. A&J’s jurisdictional challenge failed because the action concerned property and payments passing through New York. Neither event licenses a description of all named dealers as convicted criminals. The government’s table was the beginning of an accusation, not a list of convictions²⁰.

Even the regulatory process continued after the bank disappeared^28,29. In 2015, securities-industry association SIFMA warned that unfinished Section 311 proposals left banks uncertain about restricting transactions without a final mandate. Its list included LCB²⁹. That October, FinCEN withdrew the proposed fifth measure because LCB no longer existed as a financial institution. It explicitly said the withdrawal did not recognize remedial action by the bank²⁸.

The business after the bank

By then, investigators had already alleged that some activity had shifted elsewhere^10,19. In April 2013, Treasury targeted Rmeiti Exchange and Halawi Exchange in its first Section 311 action against nonbank financial institutions. It said they had taken over work after the earlier disruption¹⁰. FinCEN’s detailed Rmeiti finding described transactions shifting toward World Car Service accounts while continuing to reach some of the same American businesses¹⁹.

Another Treasury action had alleged that a manager at Fenicia Bank facilitated transfers for Joumaa and Abbas Hussein Harb. That was a separate accusation against another node, not proof that every Lebanese bank shared LCB’s alleged role. The developing picture was of facilitators and relationships that could survive the removal of one institution¹².

David Cohen later used the LCB case to argue for better information sharing between banks and government¹¹. DEA official John Fernandez, in a discussion published by the Washington Institute and hosted by INSS, explained a related operational difficulty: drug and laundering offenses could offer workable ground for international cooperation even when terrorism terminology created political resistance⁸. Investigators needed both information and partners willing to act on it^8,11.

The surrounding economies also kept changing^17,24. UNODC’s 2023 cocaine report identified renewed growth in Africa’s transit role after 2019¹⁷. In Lebanon that same year, bank closures and informal capital controls interrupted ordinary business finance, the World Bank reported²⁴. Neither development can be attributed to the LCB case; they changed the environment in which money and commerce subsequently moved^17,24.

INSS researchers later described al-Qard al-Hassan’s growing role after Lebanon’s banking collapse, within a dispersed financial system drawing on overseas connections and informal mechanisms. Their analysis also states that most diaspora financial activity is legitimate. The enduring challenge lies in identifying particular illicit relationships within a much larger world of necessary payments, family support and trade⁹.

LCB’s license had been revoked on September 20, 2011^21,28. Four years later, FinCEN closed its proposed rule with a practical observation: there was no longer a bank to impose it on²⁸. Yet the Cotonou buyers still needed vehicles, exporters still needed payment, and investigators were already following other exchange houses^10,21. The institution had disappeared²⁸. The next file carried different names¹⁰.

Sources