Tuesday, September 18, 2012

Case of alleged Hezbollah loyalist arrested in Yucatán leaves many questions unanswered

A disciple of radical Islam, or just a common thief?

*Updated content*
A U.S. citizen of Arab descent arrested in Mexico 10 days ago, alleged to be a member or supporter of the militant Islamic group Hezbollah, has been returned to federal court in San Jose, California, where he faces a charge of parole violation following 2010 convictions for bank fraud.

Rafic Mohammad Labboun Allaboun, 44, a dual citizen of Lebanon and the United States, was taken into custody at a private residence in Mérida on Sept. 8. The arrest was carried out by Mexican federal immigration (INM) agents and state security police (SSP). Labboun was flown to Houston less than 24 hours later. But now he's back in California, where the criminal case originated more than a decade ago, and Labboun may have to explain to a federal judge why he took an unapproved vacation to the Yucatán peninsula.

Labboun was convicted of seven counts of bank fraud on April 1, 2010, and sentenced to 27 months in prison, together with restitution of $102,000. He was released on June 29, and ordered to report to a halfway house. But he failed to do so and vanished from the Bay Area radar screen, only to surface in Mérida several weeks later.

In late July Labboun's federal parole officer filed a request with the U.S. District Court for the Northern District of California, asking that a warrant be issued for his arrest. As MGRR reported last week, that warrant was issued on July 26. The relevant legal documents are below, but they contain no reference whatever to Hezbollah or Labboun's alleged financial support for the group. The FPO did express her concern that he might be bound for Lebanon, however. Labboun was not authorized to depart the U.S.
Rafic Labboun Arrest Warrant

The bank fraud charges
Labboun's criminal case had nothing at all to do with the organization founded in Lebanon in 1982 - one which the United States government classifies as an international terrorist movement. In fact the case was rather mundane, and by federal standards involved a small amount of money ($100,000). It was a bread and butter prosecution for what amounted to little more than passing bad checks and exploiting credit card cash access lines.

In 2002 Labboun ran up large balances on several bank cards, by luxury (gold and jewelry) purchases and cash transfers. By creative check-kiting techniques he paid off the balances in quick succession, using personal checks drawn on a closed bank account. All of the checks were worthless, but it took several days for them to bounce around commercial banking channels before they were returned to the holders red-stamped as NSF (Non-Sufficient Funds) instruments. The daring caper wan't flawless, but overall it worked well enough.

In the meantime Labboun's multiple credit lines were restored to zero balances, enabling him to draw out new cash advances immediately. He did so, writing checks to himself and depositing them in a different bank. A day or two later he purchased cashiers checks at the same bank, payable to bearer. Under banking law a cashiers check is the equivalent of cash, even if procured by fraud. Government prosecutors say Labboun headed to Lebanon, where he deposited the good-as-gold checks in local accounts. The economic loss fell on everyone else down the line, much like collapsing dominoes. At Labboun's trial in 2010 financial experts testified that the fraud was a garden variety credit card "bust out" scheme. But no evidence was presented to the trial jury that any of this was linked to funding of Hezbollah, as was widely suggested by the international press last week.
Rafic Labboun Bank Fraud Scheme

On the same team with Hezbollah?
Still, the question is a fair one. Last week MGRR sent an email to Labboun's U.S. attorney, Mark Joseph Reichel, as follows: "Many press sources claim that Labboun has substantial connections to Hezbollah. Some Mexican news accounts have linked his 2010 bank fraud convictions in San Jose to an alleged attempt to provide financing to the organization. I’ve scoured the PACER documents and find no reference to such matters. I would very much like to have your official response on that issue."

Here is Reichel's verbatim reply (Sept. 12) to MGRR:
"1. The case was a very small case as federal cases go;
2. It happened in 02; when he returned in 09 they were following him, arrested him as he was about to leave
3. Was strange that they spent so many resources prosecuting the guy for a really small amount of $
4. In the course of trial, the government did show the judge some CIPA filings, which I could not see; also, they instructed the the arresting officer--from the airport--an ICE officer--to not answer any questions I might have during the trial while he testified that touched on national security. He is from a part of Beirut which has seen a lot of fighting and misery. His brother was killed in the fighting."

In brief, Reichel dodged the ultimate issue of Labboun's alleged support of Hezbollah. There's nothing unusual about that; it's a defense attorney's job to ignore all sorts of uncomfortable questions from the press, particularly when an absconding client is about to stand again before a federal judge. Whether Rafic Labboun is a devoted disciple of radical Islam, however, or just another bank scam and rubber check artist, remains far from clear.

Oct. 22 - Alleged Hezbollah sympathizer was on his way to Beirut when arrested in Mérida, Mexico

Oct. 2 - Labboun had another appearance in federal court yesterday, and according to documents he waived his preliminary parole revocation hearing. In a nutshell, that means he's not going to contest the parole violation charge which was filed against him in July. How could he, since he was arrested 2,500 miles away in Mérida last month? Where will all of this lead when he's eventually convicted of the PV charge and sentenced? Insofar as I can tell, to perhaps a few more weeks in the Big House.

Sept. 28 - Labboun returned to court yesterday for the first stage of a parole revocation proceeding. The judge ordered him held without bond (no surprise there). It appears that federal prosecutors will have very little leverage over him, though. In June 2010 Labboun was sentenced to 27 months. He was released in June of this year, so he's already served the bulk of his time. Apart from the unpaid bank restitution, there's not much more that can be done to him. He'll be back in court next week.

The Yucatán Times reported last week that Rafic Labboun was carrying a fraudulent Belize passport when arrested. Belize shares a border with Quintana Roo state, in the extreme southeastern corner of the country. A Spanish language news source said that Labboun owned a restaurant in Mérida, a capital city which has long been home to a flourishing Lebanese community. But since he spent the last two years in prison, the claim seems highly unlikely.

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