Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Paraguayan individuals, Kassem Mohamad Hijazi, Khalil Ahmad Hijazi, and Liz Paola Doldan Gonzalez, for their roles in corruption in Paraguay, as well as five associated entities connected with their corruption schemes. Operating as a despachante in Paraguay since at least 2017, Kassem Mohamad Hijazi (Kassem) commands and controls a money laundering organization based out of Ciudad Del Este, Paraguay, which operates on a global scale with the capability to launder hundreds of millions of dollars. Kassem maintains strong ties with Paraguayan politicians, police officers, district attorneys, and several money exchange brokers located in Ciudad del Este who provide ease, security, warranty, and economic power allowing him to operate in the area since at least 2018. He also maintains connections to Paraguayan government officials to avoid law enforcement action against his money laundering organization. For example, Kassem commands plain-clothed officers of the Investigation and Special Operations Division (Departamento de Investigaciones y Grupo Especial de Operaciones) of the Alto Parana Police Department in Paraguay to carry out activities for him in exchange for monthly payments.
In his role as a despachante, Kassem uses import and export companies, such as Espana Informatica S.A. (Espana)—of which Khalil Ahmad Hijazi (Khalil) is the President—to import merchandise from the United States through ports of entry in Paraguay and sell it in country, the profits of which he then moves through currency exchange offices and banks in Ciudad del Este to the United States, China, and Hong Kong, among other locations. Kassem’s network of front companies and business relationships allow him to move illicit proceeds all around the world with ease, his network extending as far as the United States, South America, Europe, the Middle East, and China.
Kassem uses Espana to coordinate with U.S.- and China-based suppliers for the import of electronic equipment into Paraguay, using several methods and other despachantes to avoid taxation and to launder money through their importation. Kassem coordinated with a company located in Florida for shipments of goods, for which he altered invoices and submitted them to a Paraguayan bank for a wire transfer payment back to the Florida-based company. The altered invoice greatly reduced the stated value of the goods shipped to avoid taxation and allowed Kassem to further launder the profits of his import/export operations. The estimated annual volume of goods imported into Paraguay was several hundred million dollars.
Kassem is designated pursuant to E.O. 13818 for being a foreign person who has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of corruption, including the misappropriation of state assets, corruption related to government contracts, or the extraction of natural resources, or bribery.
On December 23, 2016, the President signed the Global Magnitsky Human Rights Accountability Act (Pub. L. 114-328, Title XII, Subtitle F) (the “Act”) into law. The Act authorized the President to impose targeted sanctions on any foreign person the President determines is, among other things, responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights, or a government official, or a senior associate of such an official, responsible for, or complicit in, ordering, controlling, or otherwise directing, acts of significant corruption.
On December 20, 2017, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), issued Executive Order 13818 (82 FR 60839, December 26, 2017) (E.O. 13818), effective at 12:01 a.m. eastern standard time on December 21, 2017.
In E.O. 13818, the President determined that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat.
OFAC is issuing the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (the “Regulations”), to implement the Act and E.O. 13818, pursuant to authorities delegated to the Secretary of the Treasury in E.O. 13818. A copy of E.O. 13818 appears in appendix A to this part.
