PARAGUAY: HATTEM BARAKAT SENTENCED TO SIX YEARS

S E C R E T ASUNCION 000392

SIPDIS

SIPDIS

STATE FOR WHA/BSC
NSC FOR SUE CRONIN
SOUTHCOM FOR POLAD BARBARA JOHNSON
JOINT STAFF FOR J5 LTC SCOTT DAVIS
NAIROBI FOR MICHAEL FITZPATRICK

E.O. 12958: DNG: CO OADR
TAGS: PTER KCRM PINR PREL PGOV PA
SUBJECT: PARAGUAY: HATTEM BARAKAT SENTENCED TO SIX YEARS
PRISON


Classified By: PolOff SUSAN SUTTER, for reasons 1.4 (b) and (d).


1. (S//NF) SUMMARY: On April 10, a Paraguayan court
sentenced Hattem Barakat to six years in prison on charges of
aggravated production and use of documents containing false
information. Barakat is the brother of Assad Ahmad Barakat,
who was convicted in 2003 of tax evasion and is currently
serving a six and one-half years sentence in a Paraguayan
prison. Thanks to excellent support from the USG directed
and supported Secretariat for the Prevention and
Investigation of Terrorism (SEPRINTE),Barakat was
successfully prosecuted and sentenced, even though the
Barakat clan tried to threaten and intimidate almost every
official and witness involved in the case. Despite the
successful prosecution of Barakat, his assets, including his
businesses which are likely used to support illicit
activities, remain in his possession as Paraguay lacks
adequate money laundering and counter terrorism laws. END
SUMMARY.

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A Conviction Despite Intimidation
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2. (S//NF) On April 10, a Paraguayan court sentenced Hattem
Barakat, brother of Assad Ahmad Barakat, to six years in
prison for aggravated production and use of documents
containing false information. (Note: His brother, Assad
Ahmad, was convicted in 2003 on tax evasion charges and is
currently serving a six and one-half years sentence in a
Paraguayan prison. End Note.) It is suspected that Barakat
has laundered millions of dollars through several of his
illicit business in Ciudad del Este and Iquique, Chile in
support of Hezbollah terrorist activities in Lebanon. During
the trial, members of the Barakat clan in Cuidad del Este
attempted to bribe and intimidate virtually every Paraguayan
official on the case, including judges, prosecutors, and
witnesses. Sensitive information indicates that the clan
spent between USD350,000-400,000 in bribes to disrupt or sway
the trial and free Barakat. The USG funded and supervised
group from the Secretariat for the Prevention and
Investigation of Terrorism (SEPRINTE) prevented the Barakat
clan from influencing the trial, including providing security
at the courthouse.

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The End is Not in Sight
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3. (S//NF) Barakat,s defense will likely appeal the
court's decision and the drama will again ensue. Also,
because of the lack of strong anti-money laundering and
counter terrorism laws in Paraguay, Barakat is still able to
maintain ownership of his businesses that are involved in
illicit activities and possession of his bank accounts. Most
likely Barakat will continue to support illicit and terrorist
activities through these businesses and bank accounts while
in jail.


4. (S//NF) COMMENT: While the sentencing of Hattem Barakat
is a success, it is important to note that without the direct
USG support, funding and supervision of the SEPRINTE unit,
the outcome of this case may have been very different. No
Paraguayan government officials assisted or supported the
efforts of the prosecutor or judges involved in the case. In
fact, there was heavy pressure by several high-level
Paraguayan officials to not convict Barakat. Moreover,
without effective counter terror or anti-money laundering
laws, it remains very difficult to prosecute these types of
cases effectively. Post continues to be engaged with
Paraguay on passage of the proposed money laundering
legislation that is currently before Congress. END COMMENT.

CASON