US sanctions art collector for funding Hezbollah

The Treasury Department on Friday announced sanctions against a diamond dealer who the government says used an art gallery in Beirut, Lebanon, and a vast personal collection, dotted with names like Pablo Picasso and Andy Warhol, to house and make fake money.

US officials have described Beirut-based diamond dealer Nazem Said Ahmad as one of the “major donors” to Hezbollah, a political movement based in Lebanon and considered a terrorist group by the United States. The Trump administration has said Mr. Ahmad, born into a well-to-do family with a diamond business, was involved in smuggling “blood diamonds.”

Mr Ahmad, one of three people who have been sanctioned by Treasury officials, is perhaps better known for what he collects than what he sells.

A broadcast in Architectural Digest Middle East last year showed the walls of his Beirut penthouse lined with vivid paintings and light sculptures. The article indicates that its collection includes works by Jean-Michel Basquiat, Ai Weiwei, Thomas Heatherwick and Marc Quinn. Mr. Ahmad’s Instagram account, on which he posts photos of galleries, works of art and artists, has 163,000 followers. He is known in Beirut for collecting international, mainly American art.

The Treasury Department, in a statement, said Mr. Ahmad had used his art as a place to house money “in a preemptive attempt to lessen the effects of US sanctions.” He said he also created a gallery in Beirut, the Artual Gallery, as a facade to launder money. The ministry declined to provide details on how this process works. The gallery, run by his daughter, also focuses on American art.

There has long been a debate in the art world about the vulnerability of commerce to money laundering. It has obvious vulnerabilities: Transactions are largely unregulated, and the identities of buyers and sellers are generally not disclosed publicly. Art value is also subjective and easy to inflate or deflate, which can create a path for moving large amounts of money. Buy a painting for $ 100,000 today and sell it for $ 1 million tomorrow, and you just moved $ 900,000.

But many in the art world have firmly denied that illicit transactions take place, insisting that a dearth of examples shows that the perception of the art market as a place infested with a dark underworld n is just a myth.

The Treasury Department disagrees. Marshall Billingslea, Assistant Secretary for Terrorist Financing, called the buying and selling of art a “well understood method of illicit financial transactions”.

In this situation, Mr. Billingslea said, “we have a Hezbollah financier who is converting a significant amount of his ill-gotten gains from trading in blood diamonds into high-value art, which in turn creates a lack of transparency. in the transaction process. , “he said.” It’s a way around the formal financial system.

Hind Ahmad, the founder and owner of the Artual Gallery as well as Mr. Ahmad’s daughter, has denied the allegations against her father and his gallery. She said he had never been involved in funding Hezbollah and that his gallery, which she says sells emerging American artists at modest prices, has never been used to launder money.

Mr Ahmad previously denied reports that he was linked to Hezbollah funding. In 2001, responding to reports saying he was part of a real estate transaction in Lebanon linked to the group, he described the deal as an ordinary business transaction that had nothing to do with the organization.

The other two men who were sanctioned for what the government described as supporting Hezbollah were a Democratic Republic of Congo-based businessman and a Lebanon-based accountant who works for one of the companies in the ‘business man. These men and Mr. Ahmad are now essentially blacklisted in the US financial system, and those who do business with them could face sanctions as well.

The United States said Mr. Ahmad provided funds “personally” to Hezbollah’s secretary general Hassan Nasrallah. Mr. Nasrallah said the United States was exploiting or even inciting anti-government protests in Lebanon, which have drawn hundreds of thousands to the streets in recent weeks. U.S. sanctions against Hezbollah in recent months have helped fuel the perception among some in Lebanon that the United States is meddling in it to undermine Hezbollah and Iran.

Peter Libbey contributed reporting from New York and Vivian Yee from Beirut.

Norma D. Ross