Nasrallah's men inside America

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.

Strategic decision

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 investigations 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 such an order? American screw-tightening on Iran over its nuclear program, for one. Iran is Hizbullah's main political and financial backer.

Some analysts believe the group's deadliest terrorist attacks, including bombings at Israel's Argentine Embassy in 1992 and at a Jewish community centre in Buenos Aires in 1994, were ordered up by Iranian handlers. "It would be enough for the Iranian leadership to say the word for Hizbullah to launch an attack," says Congressman Ed Royce, a Republican from California who chairs the House subcommittee on international terrorism and nonproliferation.

But Hamilton, who is now a senior fellow at the Washington Institute for Near East Studies, says Hizbullah would be more likely to attack Americans abroad. "They would go for soft targets in places where they have lots of resources," such as South America or Turkey.

Other experts believe Hizbullah would have too much to lose from an attack on American soil. "Their fund-raising activities have been very fruitful in the United States," says Dennis Lormel, who was the FBI's section chief for terrorist financing until 2003. "With Israel clamping down on their other sources of revenue, it wouldn't make sense for them to wreck their own ability to continue making money here."

Lebanese immigrants

Support for Nasrallah runs high in Lebanese communities across the country, and it spikes when Israel's war with Hizbullah or with Palestinians in the West Bank and Gaza heats up. When Los Angeles County sheriff's deputy Lt. John Stedman searched the home of a Lebanese immigrant in Los Angeles two years ago, he found Hizbullah flags decorating the walls, along with pictures of Nasrallah and audiotapes of his speeches.

"We love him," Stedman quotes a resident of the home as saying, "because he protects us from the Jews." In a case against a Lebanese immigrant in Dearborn, Mich., who is suspected of tax fraud, prosecutors have showcased pictures of the suspect seated alongside Mohammed Hussein Fadlallah, Hizbullah's spiritual leader, at a 2002 fund-raiser in Lebanon.

But Arab-American leaders complain law enforcers are too quick to equate the pride some ex-patriates take in Hizbullah's stand against Israel-or even just the sympathy they feel for the Lebanese people-with support for terrorism.

"Any time somebody sends money to somebody in Lebanon, they [prosecutors] say it's for Hizbullah," says Maurice Herskovic, who initially represented one of the defendants in the Detroit case. Last month two of the defendants reached a plea bargain with prosecutors, admitting to several fraud charges that carry a penalty of up to 30 months in prison, but they were not charged with terrorism.

Hammoud was not among them. Though three of his brothers entered not-guilty pleas in the case, prosecutors say Hammoud slipped out of the United States and is probably back in Lebanon, where Hizbullah gunmen are waging bloody street battles with Israeli troops.

"This is a new organization [compared with what it was years ago]," says Bob Baer, a retired CIA agent who spent years in the Middle East. "It's fighting a conventional war." Yet it also has the capacity to carry out devastating terrorist attacks. In Europe and South America, and possibly in the United States as well, that's a threat law enforcers must take seriously.

(NewsWeek International)