LCB denies Hezbollah link and laundering charges

Funds seized related to sale and purchase
agreement of bank assets and liabilities

Following US accusations that the Lebanese Canadian Bank (LCB) had links with Hezbollah and the laundering of criminal proceeds, LCB issued a statement Tuesday vehemently denying these accusations.

Pursuant to these accusations, the United States seized $150 million from a local bank’s account in a US bank that relate to the sale of LCB assets.

LCB denied the money seized was in any way connected to Hezbollah or any other organization, but was placed in an escrow account for technical reasons relating to the sale of LCB assets to SGBL pending auditing. The LCB statement said that international auditing firms could not find any wrongdoing on the part of the bank that would necessitate a lawsuit against the bank. It said the case filed against the bank in the US is a civil suit and no ruling has been issued in it as yet.

The money targeted by US prosecutors was being held in an account at Banque Libano Française (BLF). US prosecutors have not made any allegations of wrongdoing against BLF, SGBL, or the US bank that maintains the correspondent account for BLF in the US.

BLF in a statement said it “acted as an escrow agent for part of the funds related to the Sale and Purchase Agreement of assets and liabilities of (LCB). The amount seized relates to the Escrow Account. The seizure has no impact on BLF business activity.”

US prosecutors have alleged that LCB played a key role in facilitating money laundering for Hezbollah. They allege the scheme involved LCB, the Hassan Ayash Exchange Company and the Ellissa Holding Company. They said that money from various individuals and companies in Beirut was sent to the US to purchase used cars. The cars were then sold in West Africa from where Hezbollah-linked groups helped smuggle the proceeds back into Lebanon.

Reported by Hani Bathiche