The Tri-Border Region: A Hub for Financial Crimes and Terrorist Financing

The Tri-Border region, situated at the border of Brazil, Paraguay, and Argentina, has become a notorious hotbed for illicit economic activities. With an estimated annual worth of $12 billion, this area is specialized in financial crime, including counterfeiting, intellectual property fraud, trademark fraud, money laundering, and smuggling.

A History of Illicit Activities

After World War II, Paraguay offered refuge to Nazi war criminals, and dictator Alfredo Stroessner believed an illicit economy was necessary for his land-locked country’s survival. This set the stage for decades of illegal trade in Ciudad del Este, the largest city in the Tri-Border area.

The Investigation Efforts

Major multinational companies such as Motorola, Kodak, Canon, and Nintendo have hired investigators to shut down counterfeiters in the region. Mark McCabe, founder of McCabe Associates, has been working in the Tri-Border region for over a decade, leading investigations that have resulted in the seizure of over $100 million worth of counterfeit goods.

The Ease of Smuggling Counterfeits

Despite state officials watching, smuggling counterfeits through customs remains relatively easy. The local population is expert at moving products, often in broad daylight. A significant portion of the earnings from this illicit economy finds its way into terrorist financing.

Terrorist Financing Links

Middle East terror groups such as Hamas, Islamic Jihad, and Hezbollah are receiving huge amounts of money from the region’s illegal activities. American officials say that the Tri-Border area is a critical source of terrorist support, with an estimated $50 million to $500 million being laundered through New York banks each year.

Concerns from the U.S.

The situation has drawn attention from Manhattan District Attorney Robert Morgenthau and the U.S. Treasury Department, which named nine individuals from the Tri-Border as key financial operatives for Hezbollah last year. Business Nation obtained intelligence documents showing bank records, wire transfers, and detailed financial links between these individuals and Hezbollah’s leader, Hassan Nasrallah.

Lack of Regulation

Despite concerns from the U.S., Hezbollah is not considered a terrorist organization in Paraguay, and there are no laws against donating to terror groups. As a result, crimes that threaten America’s security and commerce continue to thrive in the Tri-Border region.

Key Figures Involved

• Mark McCabe: Founder of McCabe Associates, has been working in the Tri-Border region for over a decade.
• Robert Morgenthau: Manhattan District Attorney who has drawn attention to the situation.
• Hassan Nasrallah: Leader of Hezbollah, with detailed financial links to individuals from the Tri-Border region.