Thursday, 13 September 2007

Blood Money

By Michael Crowley

At first they seemed little more than small-town smugglers. Then the trail led to the world's most dangerous terrorists.

Fairly Routine
When Ken Bell heard that the FBI wanted to see him, he thought little of it. After all, visits like that were a familiar part of his job. As a prosecutor in the U.S. Attorney's office in Charlotte, North Carolina, Bell was often handling cases that involved the agency. But what he'd been working on in the spring of 1999 was a cigarette-smuggling case that seemed fairly routine. In fact, his office was ready to file an indictment and make some arrests when the FBI said they wanted to talk to him about it.

Something was up. Bell knew it as soon as the agents arrived at his office and handed him a document to sign. It was an acknowledgment that he was about to hear classified information, and could be prosecuted for sharing it. This is going to be good, Bell thought. The FBI agents set up a projector, and a PowerPoint presentation flashed onto the screen. The first slides summarized the smuggling ring -- nothing new there. Then came one with a startling word: Hezbollah.

From the news, Bell knew this was an organization of Islamic fundamentalist terrorists, and that no group, at the time, had murdered more Americans. But what did these killers have to do with cigarette smuggling in North Carolina?

Up next on the screen was an image of eight men -- all of whom Bell recognized as part of the smuggling ring. He glanced at the agent across the table. "You've got a Hezbollah cell in Charlotte," the man said.

The first hints of something suspicious had come four years earlier, in April 1995. An off-duty deputy sheriff named Bob Fromme was working as a security guard at JR Discount, a retail outlet and cigarette wholesaler in sleepy Statesville, North Carolina. His main job was to track and catch shoplifters, but one day he noticed that four olive-skinned young men were buying huge numbers of cigarettes. There was nothing so wrong with that, except each of the men was buying exactly 299 cartons at a time, one less than the number that would require legal paperwork. Stranger still, one man paid for everything in cash.

Fromme watched as he pulled thick wads of bills bound by rubber bands from a plastic bag. The entire transaction cost close to $30,000. Fromme, a stocky man with thick glasses, followed the men out to the parking lot, where they talked into cell phones, looking around warily as they loaded the cigarettes into a van. Then they drove off. On his next shift at JR's, Fromme saw them again. Soon it was a regular pattern. The group varied, but several faces became familiar. Fromme decided to run license-plate checks on their vehicles, which led to rental agencies in Charlotte. Later that spring, he tailed the vans to the state line and watched as the drivers crossed north into Virginia, or west into Tennessee. Where they went from there, he hadn't a clue.

It was time to take this higher, so Fromme called a buddy, John Lorick, at the Bureau of Alcohol, Tobacco and Firearms. The friend knew immediately what was happening: Those guys, he said, are smuggling cigarettes. It was a familiar scheme. You buy cheap cigarettes in a state with low tobacco taxes, like North Carolina, and sell them someplace where taxes are high. The difference is pure profit. It's also illegal. In the fall of 1996 the ATF opened an official investigation, later code-named Operation Smokescreen, and Fromme was assigned to it by the sheriff's department.

The Case of a Lifetime
Right away, the ATF began a round-the-clock surveillance of the smugglers. Fromme did his part by spending long days at a vacant storefront across from JR's, where he'd papered over the windows and set up hidden cameras. Soon the ATF established that the smuggling ring involved more than a dozen people who had settled into quiet middle-class Charlotte neighborhoods. They weren't Hispanics, as Fromme had first assumed. They were Arabs.

Unknown to the smugglers, each van led a secret motorcade of five ATF cars as they drove north. The cars would take turns following closely behind the van -- "the eyeball," they called it -- so that no one vehicle was in the smugglers' rearview mirror for too long. As an extra precaution, the agents sometimes changed clothes and switched license plates during pit stops.

While the routes varied, the smugglers' destination was always the same: Michigan. Sometimes it was a gas station in Dearborn, other times the garage of a house in Detroit, where more Arab men unloaded the cargo and handed over cash payments. Since Michigan had the nation's highest cigarette taxes, at $7.50 per carton, while North Carolina's tax was just 50 cents, the attractions of the operation were obvious. That $7 profit on every carton meant up to $13,000 for a full van load. At the height of the operation, three or four vans made the trip each day. One big puzzle piece remained missing, though. The investigators found that the smugglers didn't seem to spend much of the money. Where, then, were all the profits going?

Unbeknownst to both Fromme and the ATF, the FBI was conducting a parallel investigation. For two years, then three, the smugglers carried on their routine while the FBI tried to find out what was motivating the nefarious smugglers by tracking the full range of their operations. Once the feds started to intercept shipments to build evidence, the smugglers changed their tactics. They hired women to travel with them, and strapped bikes to the vans to look like vacationers. In spring 1999 investigators finally had enough evidence to wrap up the case. Meanwhile, the ATF asked the U.S. Attorney's office in Charlotte to prepare indictments. That was when Ken Bell entered the case. And it was why, three days later, the FBI entered his office.

He listened as the agents described the swarthy band of smugglers as supporters of one of the most treacherous terrorist groups in the world: Hezbollah. Ken Bell knew he was being handed the case of a lifetime. A quick thinker with a cool demeanor, he'd risen in the ranks fast. Fifteen years earlier, at just 25, he'd become the youngest assistant U.S. Attorney in the country. Two years later he was jailing mobsters and coke dealers as the head of a regional organized crime and drug task force. Now he was his office's top prosecutor.

Still, Bell realized this case would be tough, and probably dangerous. The more he researched Hezbollah, the more he understood what was at stake.

Founded in 1982 to fight the Israeli occupation of Lebanon, the Lebanese-based organization was behind the 1983 bombing of a Marine barracks in Beirut that killed 241 people. It's also been linked to the 1996 Khobar Towers bombing in Saudi Arabia, which destroyed a building housing U.S. servicemen, killing 19. While Hezbollah's main goal is to destroy Israel, its leaders often call for America's ruin as well. "Death to America was, is and will stay our slogan," says the group's secretary-general, Hassan Nasrallah.

Hezbollah's Tentacles
Supported by Iran and Syria, Hezbollah has tentacles that reach distant corners of the globe. The group is thought to have hundreds of dedicated operatives embedded in Western Europe, South America, and the United States. The primary goal of these true believers is making money for the cause and sending it back to Lebanon. But analysts fear they could be summoned to violent service at any time -- including suicide bombings, which Hezbollah pioneered. There's no question Hezbollah has the capability of launching attacks on American targets, says Steve Emerson of the Investigative Project, a terrorism research group in Washington, D.C. "Hezbollah's agenda," adds Emerson, "is very close to al Qaeda's."

Bell was determined to nail the smugglers' ties to Hezbollah.

He poured his energies into the case, spending 80 hours a week in his office, surrounded by stacks of evidence. More and more, he found himself skipping dinner instead of sharing a meal at home with his wife, Gayle, and two young boys. He had been coaching his younger son's Little League team, and had decided to sit out this season, but soon he couldn't even go to games. The kids began to ask Gayle why he was never around anymore. "Dad's doing something important," she told them.

From FBI surveillance, wiretaps and undercover informants, a full picture of the terrorist cell emerged. The organizers had been a core group of eight Lebanese-born men. All had entered the United States in the early 1990s, most as teenagers, with the help of phony visas. Of these, four applied for political asylum, skipped their hearings, and then wed American women in bogus "green card marriages" to escape deportation. At least four of the group had not met their wives until their wedding day.

The leader of the cell was Mohamad Hammoud, a soft-spoken Beirut native in his mid-20s. After being repeatedly denied a U.S. visa in Syria, Hammoud and two cousins traveled to Venezuela and purchased fake visas for $200. In America he joined his two brothers and another cousin, as well as two Muslim friends from the same impoverished Beirut suburb. All of them, the FBI believed, had been sent to America by Hezbollah.

Hammoud and his associates chose to settle in the Charlotte area, with its close-knit Arab-American community, where they rented modest apartments and took menial jobs, several of them working at Domino's Pizza. They blended in well, with their tank tops and blue jeans and Charlotte Hornets gear. On Sundays they played pickup soccer in a local park.

But they also got busy building an empire of financial fraud that went beyond cigarette smuggling. A favorite tactic was called "busting out": They signed up for credit cards with false identities, maxed them out, and then tossed them away. Many of the purchased goods were resold for cash. One cell member bribed a bank clerk to give him access to the account of a woman who had recently left the country. There was no way of knowing how much money these scams raised, but one of the men bragged that he had personally made more than $500,000. In any case, they kept enough for themselves to buy homes in pleasant middle-class areas. None of them lived with their "wives," except for Hammoud. But their ordinary lifestyles drew no unwanted attention.

To keep focused, the cell members gathered every Thursday night, usually at Hammoud's house, for propaganda videos and prayers. Typically, they'd listen to a speech by the Ayatollah Khomeini and watch films glorifying martyrs preparing for suicide attacks against Israel. One tape later found in the house had graphic footage of the bombed Marine barracks. Informants said Hammoud would lead the meetings, shedding his natural shyness to deliver fiery speeches. Neighbors couldn't help noticing the cars, drawn shades, and people filing in and out of the house, but they assumed Hammoud was holding harmless meetings. "The women I saw usually wore veils," one neighbor recalls. "We thought it was a religious group."

The Most Versatile Crook
It was just before dawn on the morning of July 21, 2000, when the tranquility of East Charlotte's Donnefield Street was shattered by a convoy of police sedans and dark SUVs. Federal agents, clad in body armor and carrying machine guns, swarmed to the front door of Mohamad Hammoud's house and kicked it open. Hammoud leapt out of bed and grabbed a pistol. But as the armed team rushed into his living room, he thought better of resisting and quickly surrendered.

The FBI and ATF raid netted 17 other suspects in the Charlotte area, some of them local residents who'd been enlisted to help in the smuggling. (Eight others would be charged later.) Bob Fromme joined Ken Bell in monitoring the operation from a downtown police command post.

At Hammoud's house, agents seized shotguns, pistols and an AK-47 assault rifle, as well as piles of militant literature and videotapes. The prize find, though, was communication -- both letters and tapped conversations -- between Hammoud and Hezbollah leaders in Lebanon. Among these was a note from spiritual leader Sheikh Fadlallah, acknowledging a $1,300 contribution. For Bell, this was confirmation of what informants and surveillance had suggested: Hammoud was hot-wired to the highest levels of Hezbollah.

Most of the defendants would plead guilty to conspiracy, racketeering and fraud. But Bell wanted to bring the toughest charges possible against Hammoud. After the Oklahoma City bombing, Congress had made it a federal crime to provide financial support to any terrorist organization. So far, no prosecutor had tried to bring such a charge to trial. Bell intended to be the first. But to pull it off, he needed one of the terrorists to turn against Hammoud.

If there was one cell member who Bell thought was vulnerable, it was Said Harb. A smooth talker with an innocent air, Harb was perhaps the most versatile crook of the bunch. He had played a key role in the cell's criminal activities, personally driving cigarettes to Michigan and raising a lot of money through bank and credit fraud. At one time he had 12 credit cards and three driver's licenses, all in different names. His cell phone had five distinct rings, each for a separate identity, and he needed to refer to a notebook to keep track of his myriad Social Security numbers and bank accounts.

Harb also conducted some of the cell's most sensitive work. Canadian intelligence officials had monitored two trips he took to Vancouver in the late 1990s. The first time he met with an old childhood friend named Mohamad Dbouk. Dbouk, officials say, was in charge of procuring military equipment for Hezbollah in North America, and Harb provided him with fake credit cards and forged checks to make his purchases. The shopping list, issued by a senior Hezbollah commander, was extensive: night-vision goggles, laser range finders, blasting equipment, GPS devices, mine detectors, dog-repellent weapons and more. All of it would be shipped back to Lebanon for use in military operations against Israel.

But Harb had a weakness for the material temptations of America. He frequented Charlotte nightclubs, dabbled in Internet pornography, and bought himself a $36,000 BMW. He hated America's policies and, at the same time, appeared to thrive on its freedoms. More than the others, he seemed self-interested, more westernized and less ideologically committed -- perhaps the sort willing to cut a deal to save his own hide. By pressuring Harb with damning evidence about his trips to Canada, Bell hoped he would help nail Hammoud.

That meant winning the cooperation of Canadian intelligence officials, whose wiretaps had captured the details of Harb's shopping trips. Foreign intelligence had rarely been used in a U.S. courtroom before, and Bell's idea drew skepticism from federal officials. Nonetheless, Bell traveled to Canada in early 2002 to meet with some of that country's senior spooks. One of the top Canadian officials cut to the chase. "Tell me, what is it you really want?" he asked. Bell looked him in the eye. "What we want is to take your stuff and use it in an American courtroom." The Canadian seemed to admire Bell's directness. Soon they had a deal.

Bell's plan worked beautifully. Not long after he presented Harb's lawyer with some of the incriminating wiretaps, Harb agreed to negotiate a plea bargain. But he was worried about his own safety, and that of his family in Lebanon, so Harb insisted that the negotiations be secret. That meant that Bell couldn't talk with him in jail. Instead the two met in an empty room in the federal courthouse, Bell sliding his large frame behind a table across from the diminutive Harb, who wore handcuffs and an orange prison jumpsuit. Over time, the two managed a kind of odd rapport: Harb would sing the praises of Islam, and Bell would counter with his own firm Catholic beliefs.

In exchange for a lenient sentence, Harb was prepared to incriminate Hammoud as the cell's mastermind, and say that Hammoud had provided Hezbollah with "material support" in the form of financial contributions. But Harb had one major condition. Since his cooperation would mean a Hezbollah death sentence for his relatives in Lebanon, he insisted that all 12 of them be relocated to the United States. Bell told him that he could not make such a commitment because it required approval from high levels in Washington, D.C.

"You can find a way," Harb told him. Otherwise, Bell could find another witness.

With the trial date fast approaching, Bell rushed background checks on Harb's family to ensure they weren't terrorists, and then he convinced the State Department to bend its rules. On Easter Sunday, 2002, Harb's family drove to Syria under cover of darkness to board a plane to the United States. But there was a last-minute snag with their visas. Bell was repeatedly dragged away from Easter dinner with his family to take urgent phone calls. Each time he returned grim-faced and picked at his turkey. "I can't talk about it," he would say apologetically.

The snag was ultimately solved, and Harb finally got what he wanted: a call from his relatives saying they were safely on American soil. Bell was then free to enter Harb's plea, and he quickly used the opportunity to file new and much harsher charges against Hammoud. Now it would come down to a face-off between the two men at Hammoud's trial.

Bell worked feverishly day and night preparing for the April 2002 opening of the trial. Always in the back of his mind was his family's safety, and a disturbing call he had received from the FBI some months before. "

Hammoud is trying to have you killed," an agent told him. An informant said Hammoud had asked him to "put two bullets into the skull of the arrogant bastard prosecutor" and bomb the courthouse to destroy evidence. Bell and his wife had discussed sending the boys out of town to stay with relatives until the trial was over. But Gayle ultimately decided against it. "We'll stay here and do this together," she told him. Bell even turned down round-the-clock protection from federal marshals. Better not to spook the boys, he figured.

He also found out that he wasn't the only individual who was in danger. One afternoon, Bob Fromme came home early to find two Arabic-looking men standing in his living room, rummaging through a briefcase. They fled out his back door. Despite a sweep of the area and an undercover effort in the Arab-American community, the intruders could not be identified.

The Climax
The courthouse looked like a military zone when Hammoud's trial finally got underway. Bell showed up at a building ringed by concrete barriers. Federal marshals with shotguns and assault rifles stood guard. The jurors, whose names were kept secret, were driven to the courthouse from a secret location by armed marshals. It was all for good reason: Harb's brothers had reported that before they left Lebanon, Hezbollah leaders had grilled them for details about security at the courthouse.

Hammoud, now 29, sat in the courtroom in shackles, "staring daggers through Bell," as one agent on the case put it.

Hammoud's lawyer, Deke Falls, argued to the jury that his client was the victim of an unfair post-9/11 witch hunt, and that he sympathized with Hezbollah only for its peaceful social work and political activities. "This man right here is not a terrorist," he told the jury as he pointed to Hammoud. "This is an overblown cigarette case."

Bell countered by playing for the jury several of the videotapes seized from Hammoud's home, one of which showed a "Martyr's Squad" -- a few dozen men dressed in fatigues with explosive belts strapped around their waists. A speaker says they will "detonate ourselves to cause the earth to shake under the feet of our enemy, America and Israel." On another tape, Hammoud's sister could be heard speaking to his two cousins. "Who are you?" she asks. One of them, a young boy, begins to cry as he is told "Hezbollah."

"Hezbollah," the boy repeats, with a raised fist. "Hezbollah!"

When Said Harb testified, he said that Hammoud had solicited donations for Hezbollah at the Thursday night meetings, and had given him $3,500 to take to Hezbollah officials in Lebanon. Falls tried to discredit Harb as a sleazy hustler whose testimony was just one more con.

Everyone knew Bell's cross-exam of Hammoud would be the climax of the trial. The day came on June 14, 2002. For more than three hours, Bell grilled Hammoud about his Hezbollah connections.

Hammoud was composed, and spoke with gentle warmth. Bell sensed that the good-looking defendant was even making flirtatious eye contact with the female jurors. Hammoud stated that he had come from Lebanon not for sinister purposes, but to flee nonstop violence, like the Israeli rocket attack that had killed one of his boyhood friends. He admitted to sympathizing with Hezbollah, but only for its resistance to Israel and political and humanitarian work in Lebanon. Hammoud said he did not hate Americans and would not live with them if he did. He also suggested he was being unfairly persecuted. "I am in the United States. I am not in Syria or any other country." America, he said, is "the mother of democracy."

Bell then produced a striking photograph of a teenage Hammoud at a Hezbollah youth center in Lebanon. The picture showed Hammoud in military garb, holding up an assault rifle. "And that's part of your good works with Hezbollah right there in your hand?" Bell asked.

He also pressed Hammoud about a letter that had been found at his house from Sheikh Abbas Harake, a Hezbollah military leader in Beirut. Harake, according to Said Harb's testimony, was the recipient of the $3,500 "donation." The letter referred to Hammoud as "a dear brother who has not forgotten his field of work," and also to unspecified places where Harake and Hammoud "worked together."

"What was your 'field of work'?" Bell asked.

"I don't know what he's talking about," Hammoud replied.

It was the one moment when he did not have a ready answer. And yet he never fully lost his composure the way any prosecutor would hope a defendant would. Bell was left exhausted, and returned to his chair feeling discouraged. He turned to one of his colleagues and muttered, "I'm not sure I laid a glove on him."

Bell had always hated jury deliberations. It was the one part of a trial when events were out of his control. He could have gone back to his office and done some work, but instead he hung around the courthouse, for one day, then two, then three.

The deliberations were going on a lot longer than Bell liked. Based on the questions that were being sent in to the judge, Bell suspected the jury had been easily convinced on the lesser charges of fraud and smuggling, but was probably deadlocked on the critical question of "material support" for terrorism. So Mohamad Hammoud might have survived the questions about his Hezbollah connections all too well.

On the third day, a Friday, Bell heard shouts coming from the jury room. He felt a knot in his stomach. We've lost it, he thought. He would be known across the country as the prosecutor who blew the first major terrorism case after September 11.

Soon after, the jury returned with its verdict. One juror, a woman, had tears in her eyes. Bell assumed the shouting had to do with her. Hammoud was called to the courtroom, and the judge read through the list of charges and verdicts. Guilty. Guilty. ... And on the critical charge ... guilty. Bell felt a mix of relief and elation. Hammoud stared ahead blankly, knowing he would be going to prison for a very long time.

Outside the courthouse, reporters mobbed Bell. "We're not going to make a distinction between terrorists and those who fund terrorists," he declared. "Terrorist acts cannot be carried out without the help of those who fund them."

A few months later, Mohamad Hammoud was sentenced to 155 years in prison, maintaining his innocence all the while, claiming he was a victim of post-9/11 paranoia. Hammoud said that the jurors looked at him throughout the trial "like they hated me."

Federal officials hailed the case as a model for the urgent task of smashing terrorist cells in the United States. Bell and Fromme both received awards from the Justice Department and were personally congratulated by Attorney General John Ashcroft.

Bell left the U.S. Attorney's office soon after to become a partner in a major Charlotte law firm. Fromme is still at the Iredell County sheriff's department, and this past spring he was finally able to take his honeymoon -- seven years after getting married. Said Harb, meanwhile, was released after serving a reduced sentence; his current whereabouts are a well-guarded secret.

While the trial of Hammoud is over, the Charlotte Hezbollah terrorist case remains open. Five named defendants are still fugitives, and the FBI continues to hunt for them. Officials are particularly concerned about Mohamad Dbouk, Said Harb's contact in Canada. In recent testimony before Congress, U.S. Attorney Robert Conrad testified that Dbouk had applied five times to Hezbollah leaders to become a martyr by carrying out a suicide operation. Each time he was turned down, on the ground that he was too valuable to the group. No one knows if he's still trying.

Meanwhile, federal officials say they are monitoring suspected Hezbollah cells in several other U.S. cities.

Bob Fromme, for one, assumes that the danger is far from over. Just this past fall, he received a troubling call from an informant at JR's. Arabic men had shown up in vehicles with out-of-state plates -- and paid cash for large numbers of cigarettes.


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