How a Hezbollah cell made millions in sleepy Charlotte, N.C.
Moonlighting from his job as a deputy sheriff, Sgt. Bob Fromme was working security one day at JR Discount, a tobacco wholesaler in Statesville, N.C., when he saw three Arabic-speaking men buying a huge stash of cigarettes--300 cartons apiece. But what really caught Fromme's eye was how the men paid. They reached into shopping bags and pulled out wads of cash, bound in rubber bands. The men soon became regular customers at JR, shoving pallets of Marlboros and Winstons into waiting vans.
That was back in 1995. Over the next four years, Fromme worked with the Bureau of Alcohol, Tobacco, and Firearms in tracking the men. His suspicions would ultimately prove dead-on. The investigation revealed a multimillion-dollar tobacco smuggling ring. Copying an old Mafia scam, the men ran truckloads of North Carolina smokes--taxed at only 50 cents a carton--to Michigan, where the tax was $7.50 a carton, and illegally pocketed the difference.
The case fell to Ken Bell, a veteran prosecutor in the U.S. attorney's office in Charlotte. In tobacco-friendly North Carolina, Bell says, he wondered if he could even find a jury that would convict. Then came an unexpected visit from two FBI agents. They insisted that Bell and his boss sign nondisclosure agreements before they talked. Bell's investigators, it turned out, had stumbled onto a top U.S. cell of Hezbollah, the Lebanon-based terrorist organization. The FBI already had national security wiretaps up on two of the suspects.
Anytown, U.S.A. Bell was stunned. Charlotte, a fast-growing city of half a million, had few Muslims and even fewer Shiites, the sect followed by most Hezbollah backers. Yet, somehow, one of the world's most formidable terrorist organizations had set up shop in his backyard. Its leader, Mohamad Hammoud, lived in a middle-class neighborhood just 15 minutes from Bell's home.
Last week, Hammoud and five others were sentenced in one of the most significant terrorism prosecutions in recent years; Hammoud received an extraordinary 155 years in prison for racketeering and "material support" of Hezbollah. Begun before 9/11, Bell's investigation has helped transform the way U.S. law enforcement is tackling terrorism at home. The case also offers an inside look at the U.S. operations of Hezbollah--the Iranian-backed militia that until 9/11 had killed more Americans than any other terrorist group. The Charlotte gang is one of a dozen Hezbollah cells across the United States, law enforcement officials say. Those cells include a hard core of several dozen militants--a number with military training in Hezbollah camps--plus hundreds of supporters. Over the years, Hezbollah's U.S. backers are believed to have raised millions of dollars for the group, money often derived from criminal acts. "They are involved in a lot of different crimes here," says a top FBI official. "Copyright violations, cigarette tax violations, counterfeit violations."
Far-reaching probes, sparked by the Charlotte case, are underway in the Detroit and Los Angeles areas, home to the nation's largest communities of Lebanese-Americans. On February 4, authorities in Detroit announced indictments of 11 people allegedly tied to the Charlotte smuggling ring; two of them stand accused of funneling money to Hezbollah. Says one federal agent about Detroit: "There's much more to come."