Today we report in the New York Daily News about a bizarre case unfolding in the Los Angeles communities Bell and Cudahy, where a special task force collared a dozen Arab-American and Latino suspects involved in a seemingly small-time drug and counterfeit clothing ring.

While on the surface it doesn't appear to be terrorism-related, our sources say Operation Bell Bottoms targeted a "classic case of terrorism financing," with the defendants smuggling profits from selling dope and counterfeit goods in L.A. back to Iran-backed Shiite terror group Hezbollah in Syria and Lebanon.

Neither the press release by the U.S. attorney for the Central District of California or court filings by the government specifically mention Hezbollah or terrorism. But one clue is found in the affidavits filed in court, which are signed by prosecutors from the Justice Department's National Security Division and by an FBI official assigned to "Counterterrorism Squad 4" in L.A., a task force brimming with agents from the FBI, DEA, IRS, Department of Homeland Security and local cops. CT-4 isn't known for making drug and counterfeiting cases.

The counterfeit designer duds were sold out of local stores by the defendants from Bell and Cudahy. My colleague Jeff Anderson has written astounding stories that suggest no criminal activity in Cudahy is done without the blessing - and tax being paid to - the Mexican mafia and 18th Street gang.

Also, while unmentioned so far in court papers, Hezbollah is well known to have profited from the illegal sale of name-brand counterfeits produced in the tri-border area of Argentina, Paraguay and Brazil. The Daily News has reported on similar scams before that were proven in federal court to be Hezbollah fundraising operations. Often they have involved smuggling cigarettes and other goods, as CT Blog contributing expert Matthew Levitt blogged about yesterday.

As the possibility of a confrontation with Iran arises, so have fears that Hezbollah operatives involved in the U.S. fundraising schemes could turn operational and attack at Tehran's behest. While that may be a remote possibility, a federal case in 2003 fueled such speculation. Defendant Mahmoud Youssef Kourani was accused by federal prosecutors in Detroit of being a Hezbollah soldier trained in "weaponry, spycraft and counterintelligence." Kourani's brother was Hezbollah's security chief in southern Lebanon.

SOURCE:Counterrorism Blog