There are two reasons why anti-money laundering (AML) and counter-terrorist financing (CTF) professionals should review the Kassim Tajideen case. First, there are a limited number of examples of complex terrorist financing, and second, terrorist financing strategies often incorporate money laundering techniques.

On August 8, 2019, Kassim Tajideen (age 63) was sentenced by U.S. authorities for a complicated money laundering and terrorist financing scheme that evaded the U.S. Office of Foreign Assets Control (OFAC) sanctions. He was sentenced to five years in prison and ordered to forfeit $50 million.¹ Since being labeled a specially designated global terrorist (SDGT) on the OFAC list on May 27, 2009, he built an expansive business throughout Africa, which provided funding to Hezbollah typically channeled through his brother, Ali Tajideen.²

Ali Tajideen was a brigade commander for Hezbollah in Tyre, Lebanon. Later, Ali Tajideen joined Jihad al-Bina, a Hezbollah-backed development foundation that provided housing, schools and infrastructure after the civil war.³ Nevertheless, before his arrest in Morrocco, Kassim Tajideen was considered a very successful businessman.

Background

The Tajideen family, which includes Kassim Tajideen and his brothers Ali Tajideen and Husayn Tajideen, was initially from rural Hanaouay, Lebanon. This area, notably in the neighboring Qana, has a sizeable population that has moved to Africa. The Tajideen family moved to Sierra Leone temporarily in the 1950s, where there was a considerable Lebanese community of diamond traders.⁴ Kassim Tajideen appears to have been born in Sierra Leone on March 21, 1955, before returning to his family’s home country of Lebanon.⁵ By 1975, Kassim Tajideen moved back to Africa; having Sierra Leonean, Lebanese and Belgian citizenship made him ideally suited to move in and out of countries without much exposure.⁶

The Lebanese community involved in Africa is primarily composed of commodity traders, so Kassim Tajideen was able to develop relationships and expand his network of contacts. As civil wars overtook Africa, conflict diamonds became a useful commodity to buy at a discount and sell at market prices in Belgium.

Angola and Diamonds

By 1992, Kassim Tajideen and his brother, Husayn Tajideen, expanded into Angola, setting up several legal entities. SICAM, Golfrate Holdings (Angola) Lda, Afri Belg Commercio E Industria Lda and Grupo Arosfran Empreendimentos E Participacoes Sarl are cash and carry businesses selling foodstuff, household items and personal care items.⁷ Angola became a logistical hub for acquiring and moving goods between Europe and Africa. These companies created the veneer of legitimacy.

However, the companies were likely front companies for the smuggling of conflict diamonds from troubled countries such as Angola, Democratic Republic of Congo (DRC), Liberia, the Republic of the Congo and Sierra Leone into Europe. Even after the Kimberley Process established restrictions on the sale of conflict diamonds in 2003, the diamond trade was likely what fueled the company’s profits and expansion.

Gambia—Corporate Activity

By 1993, Kassim Tajideen moves his family to Gambia for stability, as well as religious, geographical and transit factors. Ali Tajideen, Husayn Tajideen and Kassim Tajideen were partners and incorporated Tajco Company LLC and the subsidiary, Gambian Kairaba Supermarket, to facilitate international trade and hide the illicit flow of funds and goods. Tajco Company LLC operated from Kairaba Shopping Centre at 62 Ecowas Avenue (Buckle Street) PMB Box 2176, Banjul, Gambia starting in 1993.⁸ Tajco is a mirror name of a Danish auto-parts maker and may have been intentionally selected to confuse people.⁹ The Tajideen family operated between Lebanon and Gambia.

Conflict Diamonds

By May 2003, using the Belgian Soafrimex, an importer/exporter of food commodities, the company acted as a flawless cover for diamond smuggling or under-invoicing into Antwerp. The World Federation of Diamond Bourses issued an alert to their members that Kassim Tajideen is a rogue trader.¹⁰ Arrested by the Belgium Economic Crimes Unit for suspicion of fraud, money laundering and selling diamonds of doubtful origin, Kassim Tajideen and his wife spent time in jail.

Soafrimex’s business profile seemed inconsistent. The company was headquartered in Antwerp, the diamond capital of the world, yet it was purported to be an exporter of dry stable commodities, such as rice and flour, to Angola, Sierra Leone, Mozambique, Ghana and Gambia.¹¹ Many of these export countries were rich with diamonds or conduits for conflict diamonds.¹²

Subsequently, the company and its subsidiaries appeared to mask the real activity, a trade-based money laundering operation that used under-invoicing and documentary fraud, by moving diamonds with food goods. Rumors still circulated that the businesses were suspicious as the brothers gained political clout with DRC President Joseph Kabila via Kabila’s brother.¹³ In this case, the brothers looked to attach themselves to a kleptocratic leader drawn to enriching himself. Of course, this attracted negative media stories.¹⁴

Illegal Timber

As the illicit trade grew, new opportunities were presented. Illegal logging in DRC became a mechanism to expand into a lucrative field. Using the legal vehicles, Congo Futur and Cotrefor Sprl expanded beyond foodstuffs into real estate, construction and logging. With the new clout, the Tajideen companies convinced the government to grant them forest concessions. The Organized Crime and Corruption Reporting Project¹⁵ and Global Witness¹⁶ documented that both vehicles facilitated illicit trade and exploited the European Union Timber Regulation and the Lacey Act.¹⁷

British Virgin Islands, UAE and Shell Companies

By the mid-2000s, the operations were at a scale that made it difficult to hide the illicit activity. The Tajideen brothers needed to expand services to the Caribbean and the Middle East to extend their fundraising efforts in Latin America amid the Lebanese diaspora. They also needed to expand services to the source of arms and munitions.¹⁸

Subsequently, it made sense to create Ovlas Trading S.A. in the British Virgin Islands as a shell company to facilitate Latin American trade. With the legal advice of Mossack Fonseca, the entity set up Ovlas Trading S.A. and the subsidiary, Ovlas Commodities S.A., to disguise ownership.¹⁹ Both companies had a link to a Lebanese address in Beirut.²⁰ The terrorist financing and money laundering schemes both utilized front companies to hide the transaction patterns; the use of offshore entities is another compounding red flag.

Epsilon Trading FZE and International Cross Trade Company Limited were front companies that helped redirect shipments and money flows.²¹ Thus, the United Arab Emirates (UAE) became a necessary location for transshipment and bank funding.

A variety of Middle Eastern banks provided trade financing and financing of the transactions based on the trade activity. Due diligence levels were nonexistent and customer due diligence standards were poor.

The scheme used a money laundering technique involving legitimate cash-intensive businesses coupled with an import/export intensive trade-based plan aimed to purchase items for shipment to Lebanon.

Playing Chicken

What eventually got Kassim Tajideen in trouble with the U.S. government was a variety of frozen chicken shipments. His companies imported checks from U.S. companies that required payment in U.S. dollars. Between December 2013 and March 2015, Kassim Tajideen’s companies transacted with multiple U.S. suppliers.²²

In 2009, Executive Order 13224 identified the Tajideen brothers and the illegal nature of their organizations across the world.²³ By 2010, Kassim Tajideen’s empire came under scrutiny. The elaborate networks of shell companies and businesses from Gambia, Lebanon, Sierra Leone, DRC, Angola, British Virgin Islands and UAE came under intense surveillance by law enforcement and financial institutions. The SDGT designation impeded the money flow but did not stop it. It took almost 20 years for the U.S. to put Kassim Tajideen into jail, highlighting the difficulties in prosecution.

Lessons Learned

The prosecution of Kassim Tajideen underscores the sophistication and complexity that organized terror networks harness. Over the 25 years, the consolidated enterprise operated around U.S. sanctions and moved over an estimated $1 billion in funds. Kassim Tajideen worked with his family and other accomplices to route money and goods to Hezbollah through a variety of companies and means.

What is striking about the Kassim Tajideen case study is how terrorist financers leverage methods including legitimate businesses, front companies, shell companies, bearer shares, free-trade zones, cash, goods, tradebased money laundering methods and diamond smuggling.²⁴ The nuances between terrorist financing and money laundering are in the purpose of the funds, the network of related persons and the destination points. Hezbollah has become a master of running terrorist financing networks mixed with money laundering operations looking to profit from the flow of illicit money.

The following are lessons learned from the case:

• CTF requires extensive public-private partnerships with law enforcement, research organizations on terrorist funding and the financial industry. An intelligence-led approach expedites the discovery of linked information.
• Banks need specific intelligence resources to connect terrorist financing patterns against known AML and trade-based money laundering techniques to find overlapping connections.
• When a business profile becomes overly complicated, they require enhanced due diligence (EDD) to understand the beneficial ownership and transactional patterns alongside the business rationale. Unfortunately, most compliance programs do not have the resources to conduct extensive, long-running investigations.

In looking back at the accreting evidence, the red flags centered on a large number of legal entities. These entities were often located or operated in high-risk jurisdictions—sometimes operated with unrelated businesses that had connected beneficial owners or directors from worrisome locations—and had patterns of transactions that appeared overly complicated.

The astute AML professionals and investigators would have questioned the business profiles of the companies. As media stories and later nongovernmental organization (NGO) research elevated issues, such as illegal logging, compliance programs should have challenged the first line to explain the nature of the diverse business profiles that were buttressed around import and export of dry staple goods.

CTF requires EDD and information sharing that empowers investigators to dig deeper into corporate information, beneficial ownership and transactional patterns than is typical for money laundering investigations. It takes AML professionals with experience to connect the dots. It took considerable effort from law enforcement, research organizations, NGOs and banks to disrupt Kassim Tajideen.

As the Islamic State group and al-Qaida lose ground in Syria and Iraq, they will look to fund themselves once more across Asia. The lessons learned from Kassim Tajideen’s case need repeating so as not to become complacent.

Dr. William Scott Grob, CAMS-FCI, AML director, Hong Kong, China,
wsgrob@acams.org

1. “Lebanese Businessman Tied by Treasury Department to Hezbollah is Sentenced to Prison for Money Laundering Scheme Involving the Evasion of U.S. Sanctions,” U.S. Department of Justice, August 8, 2019, https://www.justice.gov/opa/pr/ lebanese-businessman-tied-treasurydepartment-hezbollah-sentenced-prisonmoney-laundering
2. “Tajideen Indictment,” U.S. Department of Justice, November 3, 2019, https://www. justice.gov/opa/press-release/file/952071/ download, 8-12.
3. “Jehad Al Benaa Developmental Association,” Jihad al Binaa, May 1998, http://almashriq.hiof.no/ lebanon/300/320/324/324.2/hizballah/ jihad-el-binna/index.html
4. Lansana Gberie, “War and Peace in Sierra Leone: Diamonds, Corruption and the Lebanese Connection,” The Diamond and Human Security Project, Partnership Africa Canada, Working Papers No. 6, https://www.africaportal.org/publications/ war-and-peace-in-sierra-leone-diamondscorruption-and-the-lebanese-connection/
5. “Treasury Targets Hizballah Financial Network,” U.S. Department of Treasury, December 9, 2010, https://www.treasury. gov/press-center/press-releases/Pages/ tg997.aspx
6. “Tajideen Indictment,” U.S. Department of Justice, November 3, 2019, https://www. justice.gov/opa/press-release/file/952071/download
7. “Treasury Targets Hizballah Financial Network,” U.S. Department of Treasury, December 9, 2010, https://www.treasury.gov/press-center/press-releases/Pages/tg997.aspx
8. “Kairaba Shopping Centre Gambia Co. Ltd.,” Gambia Information Site, 2019, http://www.accessgambia.com/information/tajco.html
9. “TAJCO Group - Denmark,” TAJCO Group, 2019, https://www.tajco-group.com/about/locations/denmark
10. “WFDB President Avi Paz urges members not to do business with two traders on U.S. Department of the Treasury terrorist list,” World Federation of Diamond Bourses, May 28, 2009, https://www.wfdb.com/media-news-press/news-headlines/124-may-28-2009-wfdb-president-avi-paz-urges-members-not-to-do-business-with-two-traders-on-u
11. “Public library of diplomacy,” Wikileaks, December 16, 2000, https://wikileaks.org/plusd/ cables/00KINSHASA8363_a.html, para 6, 9.
12. Ibid, para 3.
13. “The Terrorist’s Treasury: How a Bank Linked to Congo’s President Enabled Hezbollah Financiers to Bust U.S. Sanctions,” The Sentry, October 2017, https://thesentry.org/reports/terrorists-treasury-congo/, 2.
14. Dino Mahrani, “Exclusive: Congo under scrutiny over Hezbollah business links,” Reuters, March 16, 2012, https://www.reuters.com/article/us-congo-democratic-hezbollah/exclusive-congo-under-scrutiny-over-hezbollah-business-links-idUSBRE82F0TT20120316
15. Jelter Meers, “Dubai’s Golden Sands: Mohamed Tajideen.” Organized Crime and Corruption Reporting Project, https://www.occrp.org/en/goldensands/profiles/mohamed-tajideen
16. “Unsanctioned Trade: How U.S. purchases rainforest timber risk breaking terror sanctions,” Global Witness, February 2017,
    https://www.globalwitness.org/documents/18809/unsanctioned_trade_2017_lowres.pdf, 6-7.
17. Ibid, 8, 11.
18. “Treasury Targets Hizballah Financial Network,” U.S. Department of Treasury, December 9, 2010, https://www.treasury.gov/press-center/press-releases/Pages/tg997.aspx
19. “Ovlas Trading S.A.,” ICIJ Offshore Leaks Database, 2019, https://offshoreleaks.icij.org/nodes/10105384
20. “Treasury Targets Hizballah Financial Network,” U.S. Department of Treasury, December 9, 2010, https://www.treasury.gov/press-center/press-releases/Pages/tg997.aspx
21. “Statement of Facts,” The Investigative Project on Terrorism, December 6, 2018.
22. “Tajideen Indictment,” U.S. Department of Justice, November 3, 2019,
    https://www.justice.gov/opa/pressrelease/file/952071/download, 13-17.
23. “Treasury Targets Hizballah Financial Network,” U.S. Department of Treasury, December 9, 2010, https://www.treasury.gov/press-center/press-releases/Pages/tg997.aspx
24. “Money Laundering and Terrorist Financing Through Trade of Diamonds,” Financial Action Task Force, October 2013, http://www.fatf-gafi.org/media/fatf/documents/reports/ML-TF-through-trade-in-diamonds.pdf, 26-28.