Suspect in Iraqi Arms Shipments Targeted : Investigation: As part of an international probe, the U.S. freezes assets of a Beverly Hills businessman and takes over his company. No charges are filed.
A Beverly Hills businessman suspected of supplying weapons to Iraqi President Saddam Hussein has become the first target of what the U.S. government says is a sweeping effort to identify and freeze the assets of suspected Iraqi arms merchants operating worldwide.
No charges have been filed against Anees Mansour Wadi, an Iraqi national, or his wife, Shamsaban al-Hayderi.
But their assets--including a $3.5-million Sunset Boulevard estate and accounts at 11 banks on both coasts--have been frozen. Federal agents also have taken control of Bay Industries Inc., a firm that Wadi has operated out of a Century City high-rise office.
The U.S. Treasury Department said it will issue a list on Monday identifying firms and individuals suspected of acting as Iraqi agents and front companies, accompanied by orders freezing their U.S. assets.
“The goal of this is to expose them . . . they are feeding arms to Saddam Hussein,” said Treasury spokeswoman Barbara Clay. She refused to say who is on the list, but sources close to the investigation said it contains the names of 40 to 50 corporations set up by Iraq to buy arms and machinery. The majority of those companies are based in London, Geneva and other major European cities.
Dozens of additional companies and individuals will be named in coming months, Treasury officials said.
The Treasury Department has the authority to freeze the U.S. assets of those firms and individuals under provisions of the trade embargo that President Bush ordered after Iraq’s invasion of Kuwait in August. Because of that embargo, between $1 billion and $1.5 billion in Iraqi assets in the United States already have been frozen.
The department has been assisted in the probe by the FBI, U.S. Customs Service and Immigration and Naturalization Service.
R. Richard Newcomb, director of the Treasury Department’s Office of Foreign Assets Control, described Wadi, his wife and Bay Industries as being “participants in Saddam Hussein’s arms network.” Freezing of the assets of Wadi and his wife, which occurred last Friday, “is a significant step toward identifying and dismantling this network,” Newcomb said.
Wadi and his wife could not be reached for comment this week.
Kroll Associates, a New York-based private investigation firm retained by Kuwait to find Hussein’s overseas assets, has investigated Wadi at length, a senior Kroll official said.
That information has been turned over to Treasury authorities by Kuwait, the official said Friday. According to Kroll, Wadi used more than $4 million in Iraqi money in 1987 to help set up a front company near London called TDG, or Technology and Development Group. TDG then purchased Matrix-Churchill, a British-based machine tool company with a subsidiary outside Cleveland, and “that’s when the deals started being consummated,” said the Kroll official, who declined to be identified.
Matrix-Churchill became a center for Iraqi procurement in Europe, the official said. Six months ago, U.S. Customs agents shut down its Ohio subsidiary and seized its assets as part of an investigation into illegal arms dealing. Matrix-Churchill is suspected of selling lathes and other precision machinery to an Iraqi weapons complex, the official said.
Newcomb said Wadi had been expelled from Britain last September. The Kroll official said Wadi was expelled from Britain “for the same reasons his assets were blocked over here. He was acting as an agent of the Iraqi government, setting up a multipurpose company providing weapons and facilitating skimming and kickback operations to Iraqi government officials.”
The official said that Wadi denied being an agent for Hussein during interviews with Kroll investigators.
Kroll Associates suspect that Hussein and his family have siphoned off as much as $10 billion in the course of its arms purchases through front companies such as Wadi’s and by skimming profits from Iraq’s oil sales, the official said. He said Hussein has then hidden the money throughout the world, with the help of the front companies.
Neighbors living next to Wadi’s four-bedroom estate on Sunset Boulevard said they knew nothing about the couple. Employees at a financial investment firm located next to Bay Industries said Wadi is cordial, keeps to himself, and that he tells people he runs an import-export business.
Records at the California secretary of state’s office show that Wadi listed Bay Industries as an “engineering consulting” firm.
Wadi appears to have worked in Century City for about one year. Driving records show he has given his age as 46, had a valid California license since at least June, 1988, but shows no car registered to him.
The last time INS authorities can confirm Wadi entered the United States was Aug. 11, 1990, when he landed at Los Angeles International Airport. Because of his visitor’s visa, Wadi cannot be employed in the United States for any type of financial gain, according to Robert Moschorak, district director for the INS office in Los Angeles.
Moschorak said it appears Wadi has not violated the terms of his visa by setting up Bay Industries, but that an investigation into the matter remains open.
Meanwhile, Moschorak said, Wadi’s visitor’s visa ends Sunday, and he has to leave the country or face arrest and deportation. His wife has been allowed to stay in the United States while authorities process her application for a more permanent visa, Moschorak said.
A maid at Wadi’s home, Ethel Carvallo, said Friday that Wadi lives with his wife and two young daughters, ages about 10 and 12. She said Wadi is rarely home, and that it appears he has been making plans to leave the house.
State tax records show that Bay Industries was incorporated Sept. 27, 1988, and that it has never filed state tax returns. Jim Reber, spokesman for the state Franchise Tax Board, said the company’s corporate status was suspended last October for non-payment of taxes.