Byline: Dan Ephron and Michael Isikoff (With Jamie Reno in San Diego, John Sparks in New York and Mark Hosenball in Paris)
It began, as the Feds tell the tale, with a run-of-the-mill tax-fraud scheme. Imad Hammoud and his ring of Lebanese Americans from the Detroit area would buy boxes of cigarettes in North Carolina, where the state tax on smokes is among the lowest in the country, allegedly truck the goods back to Michigan and sell them at a profit of more than $10 a carton. Hammoud, an immigrant with ties to Hizbullah, according to an indictment filed with a U.S. district court in Michigan earlier this year, would then wire a portion of the earnings to a member of the group in Lebanon. By 2002, Hammoud and some of his colleagues were believed to be running $500,000 worth of cigarettes a week across state lines and expanding into stolen contraband and counterfeit goods, including Viagra tablets. During a three-month period that year, authorities allege, more than 90,000 Viagra knockoffs were purchased, with a plan to sell them as the real thing. "They're small, they're high in demand and they're easily transportable," says Bob Clifford, a senior FBI agent. "They're the perfect medium."
The Hammoud case is among a handful of money scams uncovered across the country in recent years bearing Hizbullah's fingerprints. Though the revenues are not huge, the cases together underscore a daunting reality: one of the most proficient terrorist groups in the world has at least a small web of operatives in America who, prosecutors believe, are loyal to Hassan Nasrallah. Hizbullah has not targeted Americans since the 1980s, when attacks on a Marine barracks in Lebanon and on the U.S. Embassy there killed more than 300 people. Sometime later, the group apparently made a strategic decision not to tweak the world's only superpower. Law enforcers say there's been no sign the fighting between Israel and Hizbullah, with all the Arab anger it stirs against America, will goad the group into action against the United States. Still, security officials worry that if Hizbullah does one day decide to strike, it can exploit an already-existing network in this country. "You often see in these groups that people who deal in finances also have military backgrounds," says Chris Hamilton, who was the FBI's unit chief for Palestinian investi-gations until last year. "The fact is, they have the ability [to attack] in the United States."
The FBI has made Hizbullah a central target of its counterterrorism efforts, setting up a unit dedicated to tracking the group and assigning agents to develop sources in Lebanese and other Middle Eastern communities across the country. Clifford, who once headed the unit on Hizbullah and Iran, made his biggest Hizbullah bust six years ago, cracking a North Carolina ring that forged credit cards and laundered money, using some of the profits to buy gear for Hizbullah. The ringleader, Mohammed Hammoud (no relation to Imad), was convicted of providing "material support" for terrorism and sentenced to 155 years in prison. Although he and his followers were not linked to actual terror attacks, the FBI found evidence they did engage in "tactical" arms training and would have been ready to strike if told to do so. "If they were given an order to conduct an operation in the United States, they would have found a way to do it," Clifford says.
What might prompt Hizbullah to issue …