New York lawmakers are concerned that a booming chain of marijuana shops across the city could be a source of cash for Middle Eastern terror groups — and they’re pushing for legislation to help root out rogue financiers, The Post has learned.
Owners of illegal smoke shops — which some city officials say now number in the thousands, compared to just 11 state-licensed shops across the Big Apple — have stayed under the radar with the help of local laws governing so-called LLCs, or limited liability companies.
LLCs are legally used by businesses to reap tax benefits and secure liability protection. But they are also subject to abuse by tax cheats, money launderers and other criminals — and supporters of terrorism can be among them, state Sen. Brad Hoylman-Sigal told The Post.
“We know LLCs are used to hide and channel money for nefarious purposes and can be used to fund terrorist activities,” said Hoylman-Sigal, who is a lead sponsor of the LLC Transparency Act. “It wouldn’t surprise me if there are individuals or groups of individuals who are funding these stores in their entirety, but we won’t know until we get to the bottom of their ownership.”
New York State Senator Brad Hoylman-Sigal said limited liability companies can be used to finance terrorist activities.AP
Passed by the New York legislature in June, the bill requires LLCs to report the true identity of its owners, including name, address and year of birth, to a public database.
The bill needs Gov. Kathy Hochul’s signature by the end of the year to become law.
The owner of the rendang shop
A spokesman for Hochul said he was reviewing the bill, but it faced strong opposition from its supporters, including business and real estate lobbyists.
Insiders say that’s partly because the secretive shell company has become a powerful force underpinning New York’s real estate market.
A study last month found that 37% of Manhattan real estate is owned by LLCs.
There are thousands of illegal smoke shops in the city, with most owners hidden behind LLCs.Getty Images/iStockphoto
“Russian oligarchs, narcotics traffickers, terrorists and money launderers around the world use New York’s LLC secrecy laws to hide their money,” said John Kaehny, executive director of the watchdog group Reinvent Albany, which published the study.
Meanwhile, the explosion of illegal smoke shops across the city has become a political yam, with New York Mayor Eric Adams claiming there are now 1,500 of them – and the city council saying in an August press release the number is closer to 8,000.
State Sen. Liz Krueger — who sponsored the bill that would regulate and tax marijuana after it’s legalized for recreational use in 2021 — said the growth of illegal pot shops across the city has far exceeded expectations. Accordingly, Krueger said he supports greater disclosure laws regarding their ownership.
State Sen. Liz Krueger said she was “really concerned that LLCs might be used to finance terrorist groups.”HANS PENNINK
“I think there are people with big money fronting these illegal shops,” Kreuger told The Post. “I’m really concerned that the LLC might be used to finance terrorist groups.”
An illegal pot shop in New York City can rake in tens of thousands of dollars a day — even as the city has gone to great lengths to fine business owners and landlords since its failed launch.
While information about ownership remains vague and speculative, the weed that ends up in some illegal smoke shops has been linked to Chinese criminal networks that are among the largest growers of marijuana in the US, according to Chris Urben, a retired DEA agent who is managing director for global investigative firm Nardello & co.
People in Yemen show support for the Palestinian faction as in this Oct. 13 rally.REUTERS
Chinese rogue financiers, in turn, have also done business with Lebanese money laundering networks, according to Urben. When the second was involved, it was likely to be linked to the Iranian-backed terrorist group Hezbollah, he added.
Lebanon-based Hezbollah has fired missiles into neighboring Israel since the Jewish state began bombing Gaza following the Hamas terror attack, which killed more than 1,400 Israelis.
“We’ve seen a connection to Chinese money laundering dealing with Lebanese money laundering, so we believe there is some sort of money laundering connection” to marijuana being sold in some illegal shops, said Urben, who worked for the federal Drug Enforcement Administration for 25 years. .
There are only 11 licensed Marijuana shops in the city — and only 26 in the entire state. Paul Martinka
In 2015, US Attorney General Preet Bharara busted 10 “K2” synthetic marijuana dealers across New York City who were using a chain of bodegas to peddle the Chinese-made drug. The synthetic weed was divided into 260,000 packets and sold for $5 a piece “where they sell milk and candy,” Bharara said at the time.
The defendants in the case – some of whom signed plea deals on conspiracy charges and served between four and 12 months in prison – were mostly from Yemen. No specific charges of financing terrorism were ever brought against the defendant.
Yemen is in the mix
Still, federal agents in recent years have collected evidence that cash from the sale of the drug K2 throughout New York City has helped fund Yemen-based Houthi fighters, according to Urban. There are 6,000 Yemeni-run bodegas in the Big Apple out of 13,000 across the city, according to the Yemen Merchants Association.
“Most of the synthetic narcotics sold in recent years go through New York gas stations and bodegas, and there is a strong possibility that a large dollar from those sales is sent to the Houthi militia,” Urben said.
Last week, the Houthis made headlines when they fired several missiles at Israel following a Hamas attack on October 7. The missile was shot down by a US Navy warship, the Pentagon said.
A Yemeni holds up a portrait of Houthi leader Abdul Malik al-Houthi during a ceremony last month. AFP via Getty Images
Hezbollah has trained and armed the Houthis during their years-long war against Saudi Arabia in Yemen. Houthi leaders have recently said the group is ready to coordinate with Hezbollah if the US intervenes in Gaza.
The Yemeni Merchants Association, which represents many smoke shops in New York City in addition to 6,000 bodega owners, did not return calls seeking comment.
The group has said at a City Council hearing that its smoke shop owner wants to be licensed, according to public testimony.
A missile fired from Yemen that may have been aimed at Israel was shot down by a Navy warship last week.
“They want to avoid police raids,” said Paula Collins, a lawyer representing pot shop owners in the city. “People are bored with life.”
Collins denied that any of his Yemeni clients were behind any of the networks involved in the nefarious scheme.
“There’s a small group that owns three to four stores,” Collins told The Post. “Most of the Yemeni people I know are hardworking and prudent and save to come here. I don’t see the connection.”
Still, Collins admits owners are having trouble finding a place to stash their piles of cash because most banks won’t accept money from marijuana companies because it’s still federally illegal.
Banks that deal with marijuana-related funds charge thousands of dollars for basic services including checking accounts, he said.
“Welcome to the world of marijuana,” Collins said.
With Carl Campanile
Categories: Trending
Source: thtrangdai.edu.vn/en/
