Press Release / / 04.20.21

Breaking: Sentry Report Reveals Business Tycoon in South Sudan Is One-Time Fugitive

Investigative Report by The Sentry:

Fugitive Forged New Identity as Business Tycoon, Power Player in South Sudan

Report Details Suspicions of Terror Links, Reveals Ali Khalil Merhi’s Predatory Business Operations, Dealings with President’s Daughter and Recently-Sanctioned General

 

April 20, 2021 (Washington, DC) – A new investigative report released today by The Sentry details how Ali Khalil Merhi, a one-time fugitive from Paraguay who fled criminal charges and suspicions of terror financing, has reemerged in South Sudan with an altered identity, the title of honorary consul, and a thriving business empire benefiting from corrupt connections and predatory operations.

The Sentry’s report, “The Metamorphosis of Ali Khalil Merhi: How a One-Time Fugitive Found Fortune in South Sudan,” details Merhi’s journey from Paraguay’s most notorious prison to the world’s youngest nation, where he established a new profile with connections to the president of South Sudan and his inner circle. His business activities in South Sudan include a mining deal with the president’s daughter and a series of suspicious payments to General Malek Reuben Riak, a top official now under US, EU, and UN sanctions for corruption, torture, human rights abuses, and widespread violence and destruction.

The Sentry, an investigative and policy team co-founded by George Clooney and John Prendergast, has been actively tracking and exposing corruption, state capture, and international profiteering linked to war, mass atrocities, and human rights abuse in South Sudan.

George Clooney, Co-Founder of The Sentry, said: “In 2000, Ali Khalil Merhi fled charges of counterfeiting, accusations of links to terror financing, and requests from Argentine prosecutors to question him about a deadly 1994 bombing in Buenos Aires. Two decades later, Merhi has reemerged—with a new spelling of his name and a new business empire. The Sentry found that the government of South Sudan has been harboring Merhi for more than a decade, granting him citizenship, lucrative contracts, and even the title of honorary consul. Along the way, Merhi has formed a company with President Salva Kiir’s daughter and made large deposits into the bank account of a general now under UN, US, and EU sanctions for corruption and links to human rights abuses. The Sentry is working with banks and governments around the world to use sanctions, asset freezes, and anti-money laundering measures against his predatory business operators and their networks.”

The Sentry can demonstrate—through an extensive body of corporate filings, legal records, photographs, public reports, and social media posts—that Ali Khalil Merhi and Ali Khalil Myree are the same person. According to The Sentry’s report, neither his past as a fugitive nor his suspected links to potential terrorist financing have prevented him from international business activities and personal travels. In South Sudan, he has enjoyed access to bank accounts, travel documents, and multimillion-dollar contracts, all while maintaining close relationships with influential politicians and high-ranking military officials.

John Prendergast, Co-Founder of The Sentry, said: “In South Sudan, the leaders of the country who have hijacked state institutions and undermined the rule of law for their own financial gain have enabled Ali Khalil Merhi to evade the consequences of his alleged misconduct for years. But governments, law enforcement agencies, and banks have the tools to change that. By acting swiftly, they can build meaningful accountability for individuals like Merhi and send a message that South Sudan should not be a safe haven for international criminals and other corrupt operators.”

Sophie Lombardo, Investigator at The Sentry, said: “In South Sudan, kleptocracy has eroded the system of governance and provided fertile ground for foreign exploitation. Wherever corruption is rampant and rule of law weak, predatory networks thrive. The case of Ali Khalil Merhi makes it clear that disrupting these networks is not only a humanitarian concern, but a global security imperative.”

J.R. Mailey, Director of Investigations at The Sentry, said: “While Ali Merhi’s journey from a prison cell in Paraguay to the corridors of power in Juba is nothing short of remarkable, his ascendance in South Sudan shouldn’t come as a surprise. This is the reality of business and politics in a state captured by a lethal criminal network. Merhi benefits from the same fundamental feature of South Sudanese politics as those at the helm of the country’s government – a prevailing environment of impunity. Without accountability and consequences for violence or predatory conduct, criminals will continue to dominate both politics and business in the world’s newest nation.”

Highlights from the Sentry report:

  • While Merhi was in custody in Paraguay on charges of copyright piracy, his suspected ties to Hezbollah gained attention in Paraguay and neighboring countries. Just after his arrest, his brother Mustafa Khalil Merhi was arrested in Argentina in connection with the 1994 Argentine Jewish Mutual Aid Association (AMIA) bombing. Shortly thereafter, the Argentinian government filed two requests to interrogate Ali Khalil Merhi in connection with the AMIA bombing.
  • The Sentry has confirmed that under Paraguayan law, a case such as that of Mehri remains open until the subject of an investigation returns to stand trial—regardless of how many years have passed.
  • In 2009, Merhi’s Southern Sudanese company, Skyline Contracting Co. Ltd, became an approved vendor for the United Nations (UN), supplying $2.23 million in construction materials to the UN Procurement Division (UNPD) over the next five years.
  • Between 2012 and 2014, Skyline Contracting paid $88,676 into the personal bank account of General Malek Reuben Riak, a top South Sudanese official now under US, EU, and UN sanctions, in rounded cash transactions.
  • In May 2014, Merhi completed construction on his flagship enterprise in South Sudan: the 120-room Crown Hotel, which was personally opened by President Salva Kiir. The hotel has hosted high-profile government ministers, business executives, and even a Fédération Internationale de Football Association (FIFA) president.
  • Merhi’s company Skyline Construction built the Ministry of Defense’s new headquarters, also known as Eagle House, which opened May 23, 2019 and cost the government of South Sudan more than $40 million.
  • When Merhi was tapped for the position of South Sudan’s honorary consul in Beirut in late 2019, it was not the first time his name had been floated for a diplomatic post. More than two decades prior and over 6,000 miles away, a Paraguayan congressman had lobbied for Ali Khalil Merhi to be the country’s consul to Lebanon.

Report recommendations: In response to its findings, The Sentry provides a series of urgent policy recommendations, fully detailed at the end of the report and highlighted below.

  • The US Department of the Treasury should investigate and, if appropriate, sanction Merhi and his network of companies, as well as his South Sudanese partners and other international facilitators. This investigation has identified potential misconduct that, upon further investigation, may be consistent with sanctions designation criteria under Executive Order 13818 (Global Magnitsky), including direct payments into a senior government official’s bank account. Despite Merhi’s suspected involvement in counterfeiting, intellectual property theft, and terrorist financing, companies under his control have benefited from lucrative government contracts in South Sudan.
  • The US should engage South Sudan to take steps toward corporate transparency and accountability. The US should continue its engagement with South Sudan to build strong corporate transparency, oversight, and accountability mechanisms, anchoring its strategy on South Sudan’s progress advancing key provisions of the Revitalized Agreement of 2018, which seeks to realize a permanent and sustainable peace. High-level diplomacy, financial tools of pressure, and anti-money laundering measures can, if deployed strategically, pressure parties to the peace agreement to make measurable progress in the implementation of transparency and accountability mechanisms.
  • Banks should strengthen anti-money laundering and countering the financing of terrorism (AML/CFT) frameworks at regional financial institutions, particularly those with correspondent banking relationships. US, UK, and EU banks that maintain correspondent banking relationships with financial institutions in South Sudan and its neighboring countries should encourage respondent partners to strengthen their AML/CFT frameworks. Regional financial institutions should adopt enhanced customer due diligence and transaction monitoring, focusing particularly on transactions related to public procurement in South Sudan.
  • The government of South Sudan should enforce its anti-money laundering and countering the financing of terrorism (AML/CFT) laws. The government of South Sudan should take steps to operationalize its AML/CFT statutes, investigate the influence of politically exposed people in the banking sector, and implement strong customer due diligence, know your customer, and suspicious activity reporting requirements to mitigate the threat of future abuse. It should also take steps to improve transparency across the sector, empower oversight institutions, and establish an adequately funded, staffed, and trained Financial Intelligence Unit. In addition, it should increase spending on AML/CFT initiatives to ensure that stakeholders across government, civil society, and the private sector have the financial and technical resources necessary to implement robust AML/CFT guidelines.

Read the full report: https://thesentry.org/reports/metamorphosisofmerhi

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, +1 310 717 0606, gh@thesentry.org

About The Sentry

The Sentry is an investigative and policy team that follows the dirty money connected to African war criminals and transnational war profiteers and seeks to shut those benefiting from violence out of the international financial system. By disrupting the cost-benefit calculations of those who hijack governments for self-enrichment, we seek to counter the main drivers of conflict and create new leverage for peace, human rights, and good governance. The Sentry is composed of financial investigators, international human rights lawyers, and regional experts, as well as former law enforcement agents, intelligence officers, policymakers, investigative journalists, and banking professionals. Co-founded by George Clooney and John Prendergast, The Sentry is a strategic partner of the Clooney Foundation for Justice.