TWO MEN PLEAD GUILTY TO RACKETEERING

Imad Majed Hamadeh, 51, of Dearborn Heights and Theodore Schenk, 73, of Miami Beach,
Florida each pleaded guilty to an Indictment charging them with conspiracy to Violate the
Racketeer Influenced and Corrupt Organizations Act (RICO), United States Attorney, Stephen
J. Murphy announced today.

Hamadeh and Schenk pleaded guilty in United States District Court in Detroit before the
Honorable Gerald E. Rosen, United States District Judge. The indictment charged Hamadeh,
Schenk, and 16 other defendants with operating a criminal enterprise to traffic in contraband
cigarettes, counterfeit Zig Zag rolling papers and counterfeit Viagra, to produce counterfeit
cigarette tax stamps, to transport stolen property, and to launder money. Some of the profits
derived from the illegal enterprise were given to Hizballah, a foreign terrorist organization,
according to the Indictment. Hamadeh and Schenk face a maximum possible penalty of 20
years imprisonment and a $250,000 fine.

U. S. Attorney Murphy was joined in the announcement by Daniel D. Roberts, Special
Agent in Charge of the Detroit FBI; Valerie J. Goddard, Special Agent in Charge, Bureau of
Alcohol, Tobacco, Firearms and Explosives; Brian M. Moskowitz, Special Agent in Charge,

U.S. Immigration and Customs Enforcement, Maurice Aouate, Special Agent in Charge of the
Detroit Field Office of the Internal Revenue Service Criminal Investigation; and Michael Cleary,
Special Agent in Charge, FDA-Office of Criminal Investigation.
"Combating terrorism and protecting our citizens at home and abroad, is the
Department of Justice's number one priority. Raising money for designated terrorist
organizations, like Hizballah, is a serious crime which will be vigorously pursued in the Eastern
District of Michigan," U.S. Attorney Murphy said. "We will do everything we can to expose,
disrupt and prevent any all criminal activity which supports terrorist organizations."
According to Brian M. Moskowitz, Special Agent in Charge of the Immigration and
Customs Enforcement, Office of Investigations in Detroit, "ICE will continue to work with other
law enforcement agencies to dismantle criminal organizations. Racketeering is a serious crime
and ICE will continue to investigate those who exploit our borders to facilitate their criminal
enterprise."

The Indictment charges that between 1996 and 2004, a group of individuals worked
together in a criminal enterprise to traffic in contraband cigarettes, counterfeit Zig Zag rolling
papers and counterfeit Viagra, to produce counterfeit cigarette tax stamps, to transport stolen
property, and to launder money. The enterprise operated from Lebanon, Canada, China,
Brazil, Paraguay and the United States.

Also named in the Indictment and currently awaiting a January 7, 2007 trial are: Karim
Hassan Nasser, 37, of Windsor, Ontario; Fadi Mohamad-Musbah Hammoud, 33, of Dearborn;
Majid Mohamad Hammoud, 39, of Dearborn Heights; Jihad Hammoud, 47, of Dearborn;
Youssef Aoun Bakri, 36, of Dearborn Heights; Ali Najib Berjaoui, 39, of Dearborn;
Mohammed Fawzi Zeidan, 41, of Canton; and Adel Isak, 37, of Sterling Heights. An
Indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in
which it will be the government's burden to prove guilt beyond a reasonable doubt.
Others charged in the Indictment, who are currently wanted as fugitives, believed to be
outside the United States, are: Imad Mohamad-Musbah Hammoud, 37 of Lebanon, formerly of
Dearborn; Hassan Ali Al-Mosawi, 49, of Lebanon; Hassan Hassan Nasser, 36, of Windsor,
Ontario; Ali Ahmad Hammoud, 64, of Lebanon; Karim Hassan Abbas, 37, formerly of
Dearborn; Hassan Mohamad Srour, 30, of Montreal, Quebec; Naji Hassan Alawie, 44, of
Windsor, Ontario; and Abdel-Hamid Sinno, 52, of Montreal, Quebec.

The Indictment alleges that Imad Hammoud, along with his partner, Hassan Makki, ran
a multi-million dollar a year contraband cigarette trafficking organization headquartered in the
Dearborn, Michigan, area between 1996 and 2002. Makki pleaded guilty in 2003 in federal
district court in Detroit to racketeering and providing material support to Hizballah. Some of
the cigarettes were supplied to the organization by Mohamad Hammoud, who was convicted in
2002 in federal district court in Charlotte, North Carolina, of, among other crimes, racketeering
and providing material support to Hizballah. Makki and Mohamad Hammoud, who were not
charged in the indictment unsealed today, were identified as unindicted co-conspirators. They
both are currently serving prison sentences relating to their activities in this matter.

The Indictment further charges that the group would obtain low-taxed or untaxed
cigarettes in North Carolina and the Cattaraugus Indian Reservation in New York and bring
them into Michigan and the State of New York for the purpose of evading tens of millions in
state cigarette taxes. The enterprise obtained large profits by reselling the cigarettes at market
prices in Michigan and New York. The enterprise sometimes used counterfeit tax stamps to
make it appear that the state taxes had been paid.

According to the Indictment, portions of the profits made from the illegal enterprise were
given to Hizballah. Some members of the enterprise charged a "Resistance Tax," being a set
amount over black market price per carton of contraband cigarettes, which their customers
were told would be going to Hizballah. Some members of the enterprise also solicited money
from cigarette customers for the orphans of martyrs program run by Hizballah in Southern
Lebanon to support the families of persons killed in Hizballah suicide and other terrorist
operations.

In announcing the guilty pleas, United States Attorney Stephen J. Murphy commended
the work of the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agents
of the Bureau of Immigration and Customs Enforcement, the Internal Revenue Service, the
Food and Drug Administration, Michigan State Police and the Dearborn Police Department.
The case is assigned to Assistant U.S. Attorneys Kenneth R. Chadwell and Barbara L.
McQuade.

U.S. Deptartment of Justice

10 July 2006