Arrests made in cigarette trafficking to aid Hezbollah

CHARLOTTE, N.C. - In a quiet street of tidy, middle-class homes, the house of Mohamad Youssef Hammoud was notable to neighbors only for the steady stream of people passing through.

Federal authorities say at least some of them were members of a cigarette-smuggling ring that was raising money for the Islamic militant group Hezbollah.

On Friday, 17 suspects were arrested in raids of houses and businesses in and around Charlotte, FBI officials said. One person was arrested in Michigan. All were indicted on federal charges including immigration violations, weapons offenses, money laundering and cigarette trafficking, U.S. Attorney Mark Calloway said. Twelve remained in custody Saturday; the others were released on bond.

Hammoud, one of those arrested in the raids, was identified as the group's ringleader by sources working with a state-federal task force that investigated the group, according to an affidavit.

A source told agents Hammoud was well-connected to Hezbollah members in Lebanon and is believed to have received Hezbollah-sponsored military training.

The source ''believes that if Hezbollah issued an authorization to execute a terrorist act in the United States, Mohamad Hammoud would not hesitate in carrying it out,'' the affidavit read.

Hezbollah issued a statement Saturday in Beirut that denied any involvement with the people charged in Charlotte.

It was unclear whether Hammoud or any of his co-defendants had an attorney who could comment on the case.

Eleven of those arrested remained jailed Saturday; the others were released on bond after court hearings Friday. Bassam Youssef Hammoud, 33, of Northville, Mich., was being held Saturday for federal marshals at a jail in Detroit, a jail officer said.

No one answered the door Friday evening at Hammoud's gray-blue house, where dents in the front door and damaged aluminum louvers in a window remained as evidence of the morning raid.

Those who lived nearby said they knew little of its occupants, but did notice periodic gatherings and what appeared to be a constantly changing set of occupants.

''Other than all the meetings, where there'd be 15, 20 cars parked in front of the house, and the fact that there was a revolving door, they didn't bother anybody,'' said Paul Booher, who lives two houses down.

Booher said the only time he spoke to anyone at the house was when he knocked on the door and asked if they'd like to join the local homeowners' association. The man who answered said he'd have to talk to the landlord.

''They wouldn't let anyone get to know them,'' he said.

The investigation began in 1996 when Iredell County authorities noticed people with out-of-state license plates making large cash purchases from JR Tobacco, a discount tobacco outlet in Statesville.

The ring allegedly bought cigarettes in North Carolina, which has relatively low cigarette taxes of five cents a pack, and unloaded them in Michigan, where prices are higher because of 75-cent-a-pack taxes.

The profits were allegedly used to smuggle money to Hezbollah in Lebanon since 1996.

FBI officials would not comment on how much total money they believe was sent. An FBI informant said one of those arrested, Ali Hussein Darwiche, had transported more than $1 million from the U.S. to Lebanon, and another $360,000 in cashiers checks was traced to Lebanon, according to an affidavit.

Three of the suspects are believed to have provided material support or resources, including night vision devices, global positioning systems, digital photo equipment and computers, Calloway said.

Hezbollah draws its support from the 1.2 million-member Shiite Muslim community, Lebanon's largest sect, and enjoys the financial backing of Iran and the crucial political endorsement of Syria.

In the 1980s, Hezbollah was believed to be the umbrella group for militants who kidnapped Westerners and destroyed two U.S. Embassy compounds, the U.S. Marine headquarters at Beirut and a French military base. A total of about 290 Americans and about 60 French soldiers were killed. Hezbollah is on the U.S. list of terrorist organizations.

In recent weeks, Hezbollah guerrillas have been treated like heroes in much of the Arab world. Their years of resistance to Israeli occupation of southern Lebanon and infliction of casualties on Israeli forces there weakened Israel's resolve. Israel ended its 18-year occupation of the area in May.

Scholars who follow terrorism and Middle East politics said groups such as Hezbollah use different legal and illegal means to raise money.

Albert Eldridge, a political science professor at Duke University who teaches a course on international terrorism, said this is the first time he had heard of a terrorist group trafficking in cigarettes to raise money.

''You want to be able to tap into large amounts of cash. And so, what comes to mind immediately today where there are large amounts of cash: drugs or, increasingly, cigarettes,'' he said.

Hezbollah denied Saturday it had anything to do with the people arrested.

In a statement issued in Beirut, the militant Shiite Muslim group reiterated it had no affiliates outside Lebanon, ''not in America and not anywhere else.''