The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned three individuals from Paraguay, and their associated entities, for their roles in corruption under the Global Magnitsky Human Rights Accountability Act.
The three individuals – Kassem Mohamad Hijazi, Khalil Ahmad Hijazi, and Liz Paola Doldan Gonzalez – were sanctioned for illicit finance risks and activities in the Tri-Border Area (TBA) where Argentina, Brazil, and Paraguay converge, an area that has historically been a permissive financial environment for criminal and terrorist activities. This region contains a large number of unregistered money exchange houses where money laundering takes place.
“These designations under the Global Magnitsky sanctions program show that we are committed to combatting corruption and promoting accountability for officials who undermine government institutions,” Office of Foreign Assets Control Director Andrea Gacki said.
According to the U.S. Treasury Department, one of the individuals, Kassem Hijazi, 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 Hijazi maintains strong ties with Paraguayan politicians, police officers, district attorneys, and several money exchange brokers located in Ciudad del Este who have allowed him to operate in the area since at least 2018.
Kassem Hijazi uses import and export companies, such as Espana Informatica S.A. (Espana), of which Khalil Hijazi, another sanctioned individual, is the president. Through these companies, they import merchandise from the United States through ports of entry in Paraguay and sell it in country. The profits are then moved through currency exchange offices and banks in Ciudad del Este to the United States, China, and Hong Kong, among other locations.
Kassem Hijazi’s network of front companies and business relationships allow him to move illicit proceeds all around the world with ease with a network that extends as far as the United States, South America, Europe, the Middle East, and China.
Gonzalez, the other sanctioned individual, used her company based in Paraguay, Mobile Zone International Import-Export S.R.L., to purchase goods from a company based in Miami, which would subsequently send these goods to several shell companies in Paraguay. As the goods would enter the country destined for these shell companies, Paraguayan Customs would identify the cell phones as cheaper goods, such as printers and printer toner, to simulate the importation of lower-cost items, a practice that would allow Mobile Zone to pay less tax on the imports. The scheme generated at least $675 million.
The Global Magnitsky Human Rights Accountability Act targets perpetrators of serious human rights abuse and corruption around the world. With these sanctions, all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.
“The Treasury Department will continue to use our authorities to prevent illicit actors and their front companies from abusing the international financial system which hurts people around the world who play by the rules,” Gacki said.