By Emanuele Ottolenghi
July 24, 2020
Brazilian authorities extradited Hezbollah financier Assad Ahmad Barakat to Paraguay on Friday, dealing a key blow to the terrorist group. Barakat, now awaiting trial, belongs to a powerful Lebanese Shiite family affiliated with Hezbollah and, until his arrest in Brazil in 2018, served as the terrorist group’s leader in the Tri-Border Area of Argentina, Brazil, and Paraguay (TBA).
Barakat, along with his three brothers, has a lengthy history of raising funds for Hezbollah in the TBA via illicit means. As far back as 2004, the United States sanctioned Barakat for using “every financial crime in the book, including his businesses, to generate funding” for Hezbollah, Juan Zarate, the deputy assistant secretary for the U.S. Treasury Department’s Office for Terrorist Financing and Financial Crimes, said at the time. “From counterfeiting to extortion,” Zarate continued, this Hezbollah “sympathizer committed financial crimes and utilized front companies to underwrite terror.”
One of Barakat’s brothers, Sheikh Akram Assad Barakat, formerly held a prominent position within the cultural affairs department of the Shura Council, Hezbollah’s top decision-making body, and is now in charge of a Hezbollah-affiliated cultural organization in Lebanon. Two other brothers, Hamze and Hatem, participated in illicit financial activities on Hezbollah’s behalf in Latin America. Washington sanctioned Hamze and Hatem in 2006 for providing “financial and logistical support” to Hezbollah.
Assad Ahmad Barakat was arrested in Brazil in 2003 and extradited to Paraguay for tax evasion, where he served a six-year prison sentence. Hatem was arrested for fraud in Brazil in 2013 but was released shortly thereafter. Despite their run-ins with local justice, the Barakats continued to conduct their business in the TBA unimpeded. According to publicly available data from Brazil’s tax authorities, Assad Ahmad Barakat is currently a business partner in two companies in the Brazilian border city of Foz do Iguaçu, one of them with his brother Hamze, who is a partner in five other companies.
On July 13, 2018, Argentina’s Financial Intelligence Unit (FIU) froze the assets of 14 Lebanese residents of the TBA who were part of a criminal organization linked to Hezbollah and associated with the Barakat clan. The network had transferred large quantities of cash to Puerto Iguazu, on the Argentinian side of the TBA, laundering the money through a local casino located just yards past Argentinian customs at the border crossing. The FIU action spurred a process that led, one year later, to Argentina’s decision to list Hezbollah as a terrorist organization – a decision followed in short order by Paraguay, in August 2019.
Concurrently, Paraguayan prosecutors ordered Assad Ahmad Barakat’s arrest in August 2018, shortly after the country’s president, Mario Abdo Benitez, ordered an investigation into his illicit acquisition of a Paraguayan passport in April of the same year. Paraguay’s action led to Barakat’s arrest by Brazilian authorities. Paraguayan authorities had revoked his citizenship, but to no avail; he was able to obtain forged documents, thanks to widespread corruption.
Local sources indicate that this time, the outcome of his trial will be different. Given that Paraguay’s Supreme Court already stripped Barakat of his Paraguayan citizenship, and that he is being tried for acquiring a forged passport, the Paraguayan authorities will likely expel him, leaving him no option but to return to Lebanon.
Nevertheless, local authorities and the U.S. intelligence community should remain vigilant. Hezbollah’s presence in the TBA remains significant, and the terrorist group has likely already chosen a replacement for Barakat. Only sustained pressure through prosecution and sanctions can put a dent in the illicit financial networks that continue to operate in the TBA.
Foundation for Defense of Democracies