Revealed: An Iraqi tobacco tycoon thrived in the chaos of sanctions and war (pt.II)

KEY POINTS:

• Tabra's career started in the 1990s with help from Saddam Hussein's eldest son.
• For years, he supplied the knock-off cigarette factories with cheap tobacco, fake packaging, counterfeit tax stamps, and other materials.
• To do so, he ran a network of offshore companies and other fronts, many protected by high-level officials.
• Tabra has partnered with known smugglers and fraudsters in multiple countries.

The charges levied against Iraqi cigarette baron Waheb Tabra read like an action movie script: Cutting deals with the Islamic State, brawling with Iraq’s speaker of parliament, and smuggling over a hundred million dollars in cash out of the country.

After years of evading justice, the 57-year-old tobacco trader is now detained at a police station in Baghdad’s “Green Zone,” sources say, as he negotiates charges related to his arrest in Turkey last year.

Tabra is one of the most successful of the elite cigarette dealers who exploited decades of sanctions and war to build smuggling routes and counterfeiting operations that feed black markets across Iraq and the broader region. Today, the trade constitutes something like a shadow economic sector, funding militias, insurgents, and corrupt politicians.

Based on analysis of thousands of pages of leaked tobacco industry intelligence reports, public records and corporate documents, corroborated by over 20 interviews with industry insiders, smugglers, and Tabra’s associates, OCCRP has built one of the most extensive portraits of his operations to date, as part of a broader investigation into Iraq’s illicit tobacco trade.

Handsome and reckless, Tabra has pursued his interests through tactics such as forgery and impersonating his rivals.

Those who know him or have followed his career describe Tabra as a man without ideology, allowing him to work with a range of figures across Iraq’s fractured political landscape. He has partnered with the son of the former dictator Saddam Hussein, Iraqi Kurdish leaders, and known smugglers and fraudsters in multiple countries.

“He’s an operations guy. He does not care about politics one whit. He is a capitalist to the heart,” Jeffrey Coonjohn, who worked as a senior anti-corruption adviser for USAID programs in Iraq from 2005 to 2011, told OCCRP. “For him, it’s all about the money.”

Tabra did not respond to requests for comment.

Humble Beginnings

Tabra’s career in illicit tobacco started in the 1990s with help from a family friend: Uday Hussein, Saddam’s notoriously sadistic eldest son.

Under United Nations sanctions, imposed after Iraq’s invasion of Kuwait, most imports into the country were banned. To get around the embargo, big tobacco companies shipped billions of excess cigarettes into Iraqi Kurdistan, which were then shifted to Iraq, Iran, and elsewhere in the region.

Uday took a cut of the trade while counterfeiting cigarettes on the side. Tabra’s cousin, Asil Tabra, was one of Uday’s “key financial lieutenants,” according to a 2004 U.S. sanction order. (Asil Tabra did not respond to requests for comment.)

Documents and testimony from people close to Waheb Tabra indicate he started off working as one of Uday’s “couriers,” traveling the world to buy cars, guns, and designer clothes for the dictator’s son. By 2001, he had entered the tobacco business, using a trading company registered in Dubai. That company, which changed names several times over the ensuing decades, would become the hub of his operations.

Briefs from Japan Tobacco, documents from the British Virgin Islands, and internal company records show he became intertwined in a globe-spanning ecosystem of suppliers, manufacturers, and traders in Iraq, the United Arab Emirates (UAE), and countries as far-flung as India and Vietnam.

Most notably, he worked with Tareq Al-Hasan, now Imperial Tobacco’s agent in Iraq, and Nizar Hanna Nasri, an Iraqi-Assyrian trader known as the “father” of Iraq’s cigarette smugglers. (Through a lawyer, Nasri denied any involvement in smuggling or counterfeiting and any suggestion of wrongdoing. Hasan declined to comment.)

After the U.S. invasion, Tabra began to work more closely with Nasri, supplying his counterfeiting factories with materials such as tobacco, fake packaging, and fake tax stamps.

To do this, leaked documents and public records corroborated by former employees show he ran a network of offshore companies, fraudulent trademark registrations, and other fronts. Much of his work was protected by high-level diplomats, politicians, and state company employees in Iraq and abroad.

In Iraqi Kurdistan, Tabra leased factories both from members of the ruling Barzani family and from their long-time rival, former Iraqi President Jalal Talabani. Tabra served as executive director of Eagle Group, a holding company controlled by Saed Barzani, according to company correspondence. (Read more about the Barzani family’s ties to cigarette smuggler Nizar Hanna Nasri, an Iraqi tycoon who partnered with Tabra.)

Tabra worked with a company owned by an Omani diplomat and government adviser. Gulf Conversion Company, based in the UAE’s Ajman Free Zone, made cigarettes for Tabra and other clients who then smuggled them into Iran, according to shipping records and Japan Tobacco records.

Mark Hale, a former director of Gulf Conversion, said the company “only ever produced products for which [it] or the client had a registered trademark in both the UAE and the market of intended distribution.”

Leaked corporate documents also show that Tabra’s operations brought him into contact with powerful politicians and businessmen in Bulgaria, Vietnam, and Iran, where his company dealt with Behrouz Dolatzadeh, a convicted arms trafficker and smuggler connected to the business empire of Ayatollah Ali Khamenei, Iran’s Supreme Leader.

Pushing the Limits

Briefs from a cache of leaked Japan Tobacco documents demonstrated how Tabra used front companies and impersonated rivals to claim trademarks of major brands.

He used companies apparently set up in the British Virgin Islands to apply for or claim to own the Iraqi trademarks for “Philip Morris International” and “I.R.I.T.C.,” the initials of the Iranian Tobacco Company. British Virgin Islands authorities say they have no record of the company Tabra used to apply for the Philip Morris trademark, yet he managed to use the unapproved application as proof of his ownership of the brand when buying Philip Morris packaging tape in 2005.

In 2004, Tabra filed to register a company in Dubai under the name of U.K.-based tobacco firm Gallaher Ltd. (later purchased by Japan Tobacco), and then claimed to own the Iraqi trademark for the Gallaher brand Sovereign. The Dubai Chamber of Commerce said it never registered Gallaher Ltd. LLC, but a 2005 letter indicates that Tabra forged Gallaher letterhead to successfully convince Dubai customs to release fake Sovereigns they had seized.

One former employee told OCCRP that such practices were common, and sometimes even technically legal depending on the jurisdiction. Cigarette traders would register a trademark in a small jurisdiction without the owner’s approval, and then use it in other jurisdictions to manufacture the products — something known in the industry as “legal fakes.”

But Tabra pushed these tactics further than most.

“He would step out of bounds a lot, which was problematic,” the former employee said. “He would cross over from legal fakes to full-on counterfeiting.”

A Legal 'Black Hole'

In March last year, Tabra was dramatically arrested in Istanbul by Interpol following a request from Iraqi authorities. Local media attributed the arrest to accusations Tabra had smuggled $120 million in cash out of Iraq.

Tabra’s detention was a major development, since he had spent years evading justice inside Iraq. He was wanted for arrest as far back as 2006, over violation of sanctions law related to his work for Uday Hussein, according to an arrest warrant issued by an Iraqi court.

An Iraqi judge, who asked not be named owing to the power of the individuals in Tabra’s network, told OCCRP that a loophole in Iraq’s legal system, which meant most evidence involving transactions taking place outside of Iraq ended up becoming inadmissible in Iraqi courts, had so far helped Tabra escape prosecution.

Tabra has been under investigation by Iraq’s Commission on Public Integrity since 2016 over suspicions of currency smuggling and money laundering, according to the Iraqi judge. The commission’s file on Tabra, widely reported in Iraqi media, was passed to Iraq’s Central Criminal Court in 2018.

Tabra’s high-level political alliances appear to have protected him for several years prior to his arrest, the judicial source and Coonjohn told OCCRP.

Those same connections, they said, appear to be working in his favor again after his eventual apprehension in Turkey. Since his extradition to Iraq, Tabra has been confined to a police station in the Green Zone while awaiting money laundering and other charges, though he receives friends and visitors and locals describe the jail as “five-star.”

Terrorist Financing Allegations

The exact reasons why Tabra managed to evade justice for so many years are difficult to determine. But Iraq’s legal and judicial institutions are generally dysfunctional and parceled between rival sectarian political parties, meaning that accountability is often selectively applied.

The Central Bank of Iraq has previously taken some steps against Tabra’s interests: In 2015, the bank blacklisted Al Nibal, a money transfer and exchange business run by Tabra’s family which handles tens of millions dollars each year, over suspicions of financing the Islamic State.

Coonjohn, the Iraqi judicial source, and Kamil Hassani, a lawyer and anti-corruption activist, said Al Nibal’s blacklisting was also based on wider concerns over its financial crimes. They added that it and other currency exchange businesses were suspected of involvement in an ongoing currency fraud at the Iraqi Central Bank reported to have cost the country around $240 billion.

A 2020 UN Security Council report also claimed Tabra and a longtime Jordanian business partner, Hamid Al-Najjar, were “conducting financial transactions on behalf of ISIL” — another name used for the Islamic State — “in Iraq and neighboring countries through clandestine business relationships.”

Najjar said the UN claims were “false and totally untrue” and that he had nothing to do with Tabra or the illicit cigarette trade.

In April 2021, Al Nibal was further accused in a Baghdad court of misappropriating $400,000 it was supposed to transfer for a customer in Canada. The company was found guilty and ordered to repay the woman, with interest. Tabra’s family runs Al Nibal, but its Canadian branch is registered in Tabra’s name.

The allegations against Tabra do not stop at tobacco smuggling, terrorist financing and financial crime: He even got in a fight with the Iraqi speaker of parliament, Salim Al-Jabbouri, while flying first class on a Royal Jordanian plane from Baghdad to Amman in 2015, according to Coonjohn, a Jordanian security officer and a local media report. The reason for the fight was unclear.

Keep On Rolling

Tabra’s operations have upset powerful companies. In 2008, South Korea’s main tobacco company, KT&G, accused him of counterfeiting one of their brands and threatened legal action. Japan Tobacco paid informants to gather information on him for years. A leaked U.S. diplomatic cable shows that in 2006 Philip Morris brand protection staff in Dubai complained to U.S. officials about “perceived inaction” against Tabra’s counterfeiting.

In 2008, the Iranian Tobacco Company tried to negotiate with European Tobacco, a front for Tabra and Nasri’s operation, asking it to help fight “fake brands” and “the illegal network distributing ITC’s brands” in return for possible concessions for cigarette manufacturing in Iran. The company signed a memorandum of understanding with the Iranians, but a Japan Tobacco brief shows their factories in northern Iraq continued to manufacture the counterfeits after the agreement was made.

Despite the controversies, two of Tabra’s key companies — Margin General Trading and Fast Line Commercial Brokerage — are still active in Dubai’s registry, though Margin has been renamed King’s Rood. In 2019, corporate intelligence services from a major tobacco firm confirmed at least two of the factories Tabra leased from Nasri in Iraqi Kurdistan were still rolling cigarettes.

Tabra and a partner, also licensed a new tobacco project called Al-Masiya in Baghdad’s Industrial Zone in 2017, government documents show. The site is where, in 2008, Tabra occasionally collaborated with Jordanian businessman Awni Mutee, who was sentenced to 20 years in prison for producing and smuggling cigarettes from Jordan’s tax-free zones in September last year. Documents obtained by Japan Tobacco show the factory was guarded by four men with Kalashnikovs.

Najjar confirmed he was a partner in Al-Masiya from 2017 to 2019 but said the venture had not “carried out any commercial business.”

Tabra and his family have meanwhile expanded into other fields. In addition to his interests in the Al Nibal currency exchange, Tabra was the director of a high-end jewelry store in London and an exchange house in Toronto, and remains active in tourism and trade companies in Jordan. He also holds shares in an oil company based in Iraqi Kurdistan.

Before his arrest, Tabra was known to split his time between Lebanon, Iraq, Jordan and the U.K. His three daughters live in Toronto, where they have a YouTube channel with over 200,000 subscribers, chronicling their jet-setting lifestyle. Wearing what appear to be Rolex watches worth at least $30,000, their excursions include shopping for designer sandals at the Dubai Mall, and holidays at resorts in Lebanon and the Maldives. A 12-minute video of them eating noodles has racked up five million views.

Disclaimer: This is an Organized Crime and Corruption - Reporting Project (OCCRP) investigation. The New Arab investigative unit publishes it as a Friend of OCCRP. All related questions should be addressed to OCCRP as The New Arab was not involved in the production of this investigation.