Lawyers Prepare Terror Cases Against South African Telecom Giant, Banks

Members of Iran's Islamic Revolutionary Guard Corps march during a parade to commemorate the anniversary of the Iran–Iraq war (1980–88), in Tehran, Iran. Reuters/Stringer

JOHANNESBURG—The lawyer leading an investigation into Africa’s biggest telecom company says the evidence he has collected so far will show that the Johannesburg-based MTN Group “did business with Iranian terrorist front companies that financed deadly terrorist attacks in Iraq and Afghanistan.”

Ryan Sparacino, founding partner of law firm Sparacino PLLC in Washington, achieved a major legal victory over MTN in September 2023, when a judge in New York ruled that his case against the company could proceed under the U.S. Anti-Terrorism Act.

Mr. Sparacino is representing 67 U.S. citizens killed or injured by terrorist attacks in Iraq and Afghanistan between 2011 and 2019, and their families.

They allege that the MTN Group did business with Iranian entities that served as fronts for Iran’s Islamic Revolutionary Guard Corps (IRGC).

The plaintiffs claim that “MTN knew, or recklessly disregarded, that the entities with which it did business were supporting a terrorist campaign” that lasted for more than a decade, and even made an official agreement to support the IRGC’s “security” needs.

This is a “euphemism for terrorist activities,” Mr. Sparacino said.

MTN reports having 290 million subscribers in Africa and the Middle East.

The Sparacino lawsuit isn’t the first time that the company has been linked to the facilitation of terrorism.

In 2016, Nigeria’s telecommunications regulatory agency sued MTN for $5.2 billion for “failing to deactivate 5.2 million unregistered cellphone SIM cards.”

In terms of Nigerian law, activated but unregistered SIM cards are considered a “national security threat,” as extremists use cellphones to coordinate attacks and kidnappings.

MTN settled out of court and made what it called a “good faith” payment to the Nigerian government of $250 million.

Now, Mr. Sparacino alleges that MTN provided Iranian entities linked to terrorism with funding, logistical support, and embargoed U.S. technology and equipment.

“The plaintiffs claim that the technology MTN provided to the IRGC was unique in that it helped terrorists monitor American movements, avoid detection, clandestinely communicate, build and detonate more effective bombs, and develop more lethal rockets,” his lawsuit reads.

Mr. Sparacino told The Epoch Times that he and his team have completed an “exhaustive investigation” into MTN’s past actions in the Middle East and are in the process of “exchanging information” with the company.

Thereafter, it would be up to MTN to either settle the lawsuit or go to trial.

Islamic Revolutionary Guard Corps (IRGC) Commander-in-Chief Maj. Gen. Hossein Salami speaks during a meeting with Iran's Supreme Leader Ayatollah Ali Khamenei in Tehran, Iran, on Aug. 17, 2023. Office of the Iranian Supreme Leader/WANA via Reuters

MTN partnered with Iran’s mobile service provider, Irancell, in 2005.

The South African company’s bid was successful despite the Iranian government initially favoring Turkey’s leading mobile phone operator, Turkcell.

In 2012, the Turkish firm sued MTN for $4 billion.

In a lawsuit filed in Washington, Turkcell alleged that MTN, in collusion with several top officials of the governing African National Congress (ANC), which included then-President Thabo Mbeki, had bribed the Iranian government with weapons, cash, capital investments, and “diplomatic influence” to win the operating license.

Turkcell presented files of internal MTN documents, apparently leaked from MTN’s office in Tehran, that appeared to support the Turkish firm’s claims.

However, in May 2013, Turkcell withdrew its lawsuit.

Turkcell said it stood by its allegations but had to halt its litigation because of a Supreme Court decision barring such cases, known in the United States as the Alien Tort Statute.

South Africa’s current President, Cyril Ramaphosa, who is also a long-standing ANC member, was MTN Group chairman from 2002 until 2013.

He recently lobbied fiercely, and successfully, for Iran to be included in the BRICS bloc of strong emerging economies, a group that includes China and Russia.

Sudanese Defense Minister Abdel Rahim Mohamed Hussein (L) and chief African Union mediator and former South African president Thabo Mbeki (R) speak prior to their news conference about the release of the United Nations deminers on May 20, 2012. Ashraf Shazly/AFP/GettyImages

Mr. Ramaphosa’s spokesperson, Vincent Magwenya, told The Epoch Times: “The president denies ever being party to anything linked with terrorism in Iran or anywhere else.

“He severed all business ties when he resumed his political career as South Africa’s deputy-president in 2014.”

In the latest lawsuit to be filed against MTN, Mr. Sparacino labels Irancell an “IRGC front.”

“This is the first time that any company’s direct aid to the IRGC has supplied the basis for liability,” he stated, later adding that the judge’s decision to allow the case against MTN to proceed marked “a significant milestone in the ability of American victims of terrorism to hold the IRGC, and its corporate stooges, accountable for their terrorism.”

In a media statement, MTN said it would oppose the lawsuit because “the United States does not hold jurisdiction in this matter.”

This is the same argument used successfully by MTN when it defended a similar lawsuit launched against it in 2019.

That’s when almost 400 relatives of U.S. service members killed or wounded in Afghanistan between 2006 and 2014 alleged that MTN, among other firms “used a network of subcontractors and private security groups to transfer cash to Taliban agents and in some cases dole out salaries to certain Taliban ‘guards.’ ... while the group was allying with al-Qaeda and waging a violent campaign against U.S. forces and their allies.”

In August 2021, a judge in Washington dismissed the lawsuit against MTN, ruling that the plaintiffs could not establish jurisdiction over the company in the United States.

In comments made in late 2023, MTN Group CEO Ralph Mupita indicated that his firm was prepared to go to trial to defend itself against the latest lawsuit regarding its business practices in the Middle East.

South Africa's President Cyril Ramaphosa gestures as he addresses African National Congress (ANC) delegates during the first day of the party's National Policy Conference at the National Recreation Center in Johannesburg on July 29, 2022. Phill Magakoe/AFP via Getty Images

MTN began operating in the volatile region in the early 2000s, eventually expanding its network to include Afghanistan, Iran, Syria, and Yemen, countries known to harbor terror organizations such as al-Qaeda, the ISIS terrorist group, and the Taliban.

Mr. Sparacino’s investigation is happening at the same time that several of South Africa’s biggest banking groups are accused of financing Hamas, the terrorist group responsible for the Oct. 7, 2023, attack on Israel.

Those making the allegations include The Jerusalem Post, the Washington-based nonprofit Foundation for Defense of Democracies, and Warren Goldstein, South Africa’s chief rabbi.

They claim that three major local South African banks—Standard Bank, Nedbank, and Absa—are channeling funding to Hamas via accounts held by the South African subsidiary of the Al-Quds Foundation, an international group sanctioned by the United States and outlawed in Israel.

The banks have denied the allegations but have declined to confirm or deny whether the Al-Quds Foundation has accounts with them, citing client confidentiality.

The banks said their “comprehensive risk management and compliance programs” conform to international standards to combat money laundering and terrorist financing.

“There’s no way our banks are involved in terrorism,” South African Minister of Finance Enoch Godongwana told The Epoch Times. He suggested that the allegations are a “plot by Israeli intelligence to “smear” South Africa after the country’s government charged Israel with genocide based on its military assault on Gaza, at the International Criminal Court in January.

The U.S. government says Al-Quds was established in Beirut in 2001 by Hamas members to raise funds for the terrorist organization through the guise of charity.

The Treasury Department placed Al-Quds under sanctions in 2012 for “being controlled by and acting on behalf of Hamas,” with punitive measures including the freezing of assets held by the foundation under U.S. jurisdiction and the barring of U.S. citizens from engaging in transactions with it.

Washington says Hamas leadership runs the foundation’s affairs through its members who serve on the board and other administrative committees, while all documents, plans, budgets, and projects are drafted by Hamas officials.

Several Hamas leaders, including Mousa Abu Marzook and Osama Hamdan, classified by the U.S. government as “Specially Designated Global Terrorists,” serve on the Al-Quds board of trustees.

The U.S. intelligence community says Al-Quds is part of the Muslim Brotherhood, an extensive international network of Islamic organizations.

Until recently, it was headed by Sheikh Yusuf Al-Qaradawi, the most prominent Sunni Islamic scholar of the past three decades. He rose to prominence in the late 1990s, when he issued a fatwa, an Islamic legal ruling, endorsing suicide bombings carried out by Palestinian militants in Israel.

Al-Quds is now led by Sheikh Hamid bin Abdullah Al-Ahmar, a Yemeni businessman based in Turkey.

Mr. Al-Ahmar is a senior member of Yemen’s Al-Islah party, a political offshoot of the Muslim Brotherhood.

On its Facebook page, Al-Quds South Africa (SA), led by Sheikh Ebrahim Gabriels, acknowledges that it is raising funds to “free Palestine.”

Mr. Gabriels told The Epoch Times that money collected by his organization “is being sent to the needy, suffering people of Gaza.”

He would not confirm or deny funding Hamas.

But, when Mr. Gabriels was president of the Muslim Judicial Council (MJC) of South Africa, he frequently hosted Hamas leaders in Cape Town, celebrating them as “liberation fighters” and pledging “all necessary support” to them.

He has also been a frequent visitor to Gaza, where he has been hosted by Hamas leader Ismail Haniyeh.

Shortly after the events of Oct. 7, at a prayer service in Cape Town, Mr. Gabriels praised the Hamas perpetrators, saying that they were “connected to Allah.”

He has since appeared on Islamic TV channels across the world, espousing the message that “victory is near for the mujahideen [warriors] of Islam” over all “Zionists and their allies.”

The Meir Amit Intelligence and Terrorism Information Center in Tel Aviv considers Al-Quds SA and the MJC to be part of the “Union of Good,” an umbrella organization comprising more than 50 international “charity organizations” that are fundraising for Hamas.

According to the allegations against the South African banks, Al-Quds SA is sending money to Hamas using accounts registered to a proxy, the Bayt Ul Maqdis Foundation.

A Muslim charity registered in the UK, it has denied financing Hamas using funds sent by Al-Quds SA and said it does not have a presence in South Africa.

In February 2023, the Paris-based Financial Action Task Force put South Africa on its “grey list,” classifying it as a country where a lack of adequate financial regulations renders its banking system vulnerable to being used to fund terrorism.

Professor Hussein Solomon, of the political studies and governance department at the University of the Free State in South Africa, warned as far back as 2001 that terrorists were using the country to finance operations on a “global scale.”

Mr. Solomon told The Epoch Times: “Terrorists target countries where financial controls are weak for their funding mechanisms and countries where officials of both the private and the public sectors are corrupt. Both those elements are present in South Africa.

“I don’t think it’s a case of the banks purposefully wanting to fund terrorism, but I do think it’s a case of them just not carrying out due diligence as to who their clients are. It’s a case of, ‘We’re making money, so what?’”

Mr. Solomon said the South African government “hasn’t done much to ensure that the country doesn’t become a terrorist haven.”

“Terrorist financiers thrive in South Africa because there’s high-level corruption, high crime, and security services that are more interested in propping up the ANC than they are in actual law enforcement,” he said.

Mr. Solomon said Pretoria’s “blind eye” toward terrorist financiers stretches back “a long time.”

He pointed to the example of Abd al-Muhsin al-Libi, a Libyan terrorist who established two “financing fronts” for al-Qaeda in South Africa in the 1990s.

The Afghan Support Committee and the Revival of Islamic Heritage Society operated as charities for orphans.

“I can tell you that no money ever went to a single orphan,” Mr. Solomon said.

In December 2000, a grand jury in the Southern District of New York returned an indictment against al-Libi charging him, along with then al-Qaeda leader Osama bin Laden, with conspiracy to kill U.S. nationals.

Washington says al-Libi was also involved in the bombings of the U.S. embassies in Kenya and Tanzania in August 1998, which killed more than 200 people.

Mr. Solomon said it remains easy to “use loopholes” in South Africa to buy legally registered shelf companies to “transfer payments anywhere in the world.”

“Banks do flag some transactions as suspicious, and they report them to the Financial Intelligence Center [of South Africa],” he said.

“Investigations are starting to happen and regulations are getting tighter, but it’s still a system that’s open to a lot of abuse, and I’m sure a lot of people are getting away with a lot of crime.”

Terrorist organizations in South Africa are making money by selling counterfeit goods in informal markets, making the transactions hard to trace, according to Mr. Solomon.

“It’s a perfect platform for them, really, to fund terrorism. They use illicit trades and alternative payment systems such as Hawala,” he said.

Hawala is an informal method of payment based on trust. It transfers money internationally through a network of money-lending brokers.

“It facilitates huge outflows of cash every day; I’m talking about billions of dollars a year,” Mr. Solomon said.

“There’s no way even the most sophisticated financial systems in the world can put a cap on these outflows, let alone South Africa’s.”