U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT MARCH 1996:
FINANCIAL CRIMES AND MONEY LAUNDERING

United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs

ENFORCEMENT: SIGNIFICANT CASES

OPERATION GREEN ICE, PHASE II: On April 3, 1995, eighteen indictments charging 80 United States, Mexican and Colombian defendants with money laundering conspiracy and substantive counts were unsealed in San Diego, climaxing an international drug money laundering investigation. The operation operated on three fronts, the first to target casas de cambio check cashing institutions operating along the Southwest Border; the second, the creation of DEA "store fronts" purporting to launder drug proceeds, whose purpose was to identify drug money launderers and financial institutions receiving the proceeds; and the third, the use of the front to identify Colombian money brokers. Arrests of 42 of the indicted individuals were made in Colombia, Canada, Los Angeles, Houston, Chicago and New York. Seizures totalled in excess of 15 million dollars, seven tons of cocaine and 16 pounds of heroin.

OPERATION CORNERSTONE: This two-year investigation culminated on June 2, 1995, with the unsealing of a nine count indictment charging 59 individuals (including six criminal defense attorneys) with racketeering, drug trafficking and money laundering offenses. The investigation involved the United States Attorney's Office for the Southern District of Florida, the US Customs Service and the Drug Enforcement Administration. The investigation targeted the narcotics trafficking and related illegal activities of the Rodriguez-Orejuela faction of the Cali Cartel, which was responsible for at least 80 percent of the cocaine exported to the United States from Cali, and the indictment specifically charged the importation of more than 200,000 kilograms of cocaine into the United States.

DISTRICT OF IDAHO: A plane was seized and forfeited in connection with the tracking of approximately $1 million laundered by the Steven Saccoccia international money laundering organization, out of Providence, Rhode Island, and New York City, through various front company bank accounts in Los Angeles, through an aircraft broker's account in Denver, and ultimately to Boise. The plane was scheduled for delivery to Cali, Colombia, and was seized just days before the pilots were due to fly it out. The government sought forfeiture on the grounds that the plane was property involved in a money laundering transaction and that it was being purchased, by a Colombia broker, for the Cali Cartel to be used in the air shipment of cocaine. The aircraft was fitted in Boise with the latest in expensive avionics, including a global navigation system and other amenities useful for international trafficking. This case required substantial inter-agency cooperation, with assistance provided by agencies all over the country and successful sharing of information and resources.

NORTHERN DISTRICT OF ILLINOIS: A defendant's cooperation resulted in the forfeiture of more than $10 million in planes and drug money. The defendant, a Colombian national who operated a fleet of cargo aircraft that functioned as the "air wing" of the Colombian cartels and were used to smuggle at least 20 tons of cocaine into the United States, Canada, and Central America, was also sentenced to eight years in prison for narcotics importation conspiracy. The results of his cooperation also included the seizure of four 727s and a Convair 500 cargo plane in Colombia and the grounding of 26 other aircraft valued at $20 million at the Cali airport.

EASTERN DISTRICT OF NORTH CAROLINA: A forfeiture judgment was ordered against six defendants in the amount of $300,000 each after their convictions for conspiracy to distribute cocaine and marijuana, and other related drug trafficking offenses. The organization successfully smuggled over 50,000 pounds of marijuana and over 500 kilograms of cocaine from Mexico through Arizona to the District. The investigation has resulted in the arrest and conviction of a total of 23 defendants with four fugitives at large. Additional results include the forfeiture of 17 pieces of real property valued at more than $4 million, the seizure or forfeiture of United States currency totaling $589,005, the seizure of four motor homes and 17 motor vehicles, the seizure of more than 2,100 pounds of Mexican marijuana and five kilograms of cocaine, and the issuance of two separate forfeiture judgments totaling $20 million and $1.8 million, respectively.

WESTERN DISTRICT OF WASHINGTON: A shopping center and drug proceeds of over $4.5 million were ordered forfeited to the United States. The defendant in the case was also sentenced to life imprisonment and fined $4 million on his trafficking and money laundering convictions. The defendant was the head of a criminal organization responsible for importing methamphetamine ("ice") from Korea and distributing it in the United States. The defendant delivered over 800 kilograms of "ice" to his distributors in the Seattle/Tacoma and Los Angeles areas, who then transported the "ice" to Hawaii, where it was sold.

PANAMA MONEY LAUNDERING DEFENDANT EXTRADITION: In the first money laundering-predicated expulsion from Panama, on October 27, 1995, Israel Mordok, one of two fugitives from a nine count 1992 indictment unsealed in 1994 in the Southern District of New York charging money laundering (domestic and internationally-exported currency structuring) violations, was arrested, stripped of his Panamanian resident status and then immediately deported from Panama to the S.D.N.Y. where he pled guilty.

CERTIFICATES OF DEPOSIT: FinCEN responded to a federal agency request from Brownsville, Texas concerning importations at Brownsville and Denver of $1 billion and $500 million in Certificates of Deposit issued by a Mexican financial institution. FinCEN research identified the Mexican company securing the CDs as a provider of Short Term Business Credit. The courier was identified in DEA files as potentially involved in money laundering activities and one of the US Companies was potentially identified as a subsidiary of a Connecticut holding company, originally incorporated in Delaware in August 1994. This investigation is ongoing.

ARGENTINA REQUEST: FinCEN received a request seeking support in an investigation concerning subjects of an Argentinean Federal Court of Criminal and Correctional Affairs investigation involving the Bank of Commercial Credit International (BCCI) liquidation process. Research and analysis revealed financial activity on three bank account numbers submitted with the Argentinean request. Queries of the BSA database revealed case related CMIRs totaling $30,322 and CTR activity that totaled $409,250. Financial research also produced several previously unknown bank accounts, new leads, and elements common to the requester s investigation.

RUSSIAN ORGANIZED CRIME: FinCEN provided support to a Federal investigation involving Russian organized crime in the New York City area. Bank Secrecy Act transactions were discovered as well as property assets. In addition, FinCEN was able to organize and link the requester s subjects with associates and additional businesses. The case research provided enabled the investigator of this case to better understand and correlate his agency s intelligence.

SECURITIES FRAUD: FinCEN provided analytical support to a large securities fraud investigation at the State Police level. This investigation was a multi-state, joint investigation looking into the activities of numerous employees and officers of investment firms. FinCEN discovered over two million dollars in Currency Transaction Reports, over two million dollars in Currency Transaction Reports by Casinos, and approximately seven million dollars in property ownership records.