Drug Runners Urged Faster Money Laundering; Led Agents to Operation
WILLIAM M. WELCH
Mar. 30, 1989
WASHINGTON (AP) _ Federal agents trying to penetrate the illegal drug world set up an undercover money-laundering operation in Atlanta two years ago and soon ran into complaints. They were working too slowly to suit their clients.
The undercover investigators were told to look at La Mina, or ''The Mine,'' a Los Angeles-based operation. It could launder illegal drug profits and have the money wired back to drug kingpins in Latin America in 48 hours, they were told.
Federal authorities did just that. On Wednesday they announced the culmination of an investigation that they say smashed the La Mina operation, which had laundered $1.2 billion in drug proceeds over those two years.
''I think it's fair to describe this operation as a very hostile takeover of a major money laundering operation,'' Attorney General Dick Thornburgh said.
Thornburgh, FBI Director William Sessions and other law enforcement officials said their ''Operation Polar Cap'' ended with federal drug and money-laundering charges against 127 people and two Latin American banks.
Thornburgh called the investigation ''the largest money-laundering crackdown ever carried out by the federal government.'' He said the operation had direct ties to the Medellin cartel of Colombia, which authorities say is responsible for 80 percent of the cocaine flowing into the United States.
But Justice officials ran into problems closing their net.
Plans to arrest defendant Eduardo Martinez in Panama apparently depended on the assistance of the Panamanian Defense Forces headed by Gen. Manuel Noriega, who is himself under federal indictment.
Justice officials said Martinez, who is from Medellin, Colombia, had holed up in a Panamanian bank on Wednesday and was surrounded by Noriega's forces.
''Mr. Martinez is inside the bank and won't come out,'' Thornburgh told reporters at lunch Wednesday.
But by late afternoon, chagrined Justice Department officials said Martinez had eluded them and was not in the bank.
Noriega himself is under a federal indictment for drug trafficking, and his relations with U.S. officials were an issue in last year's presidential campaign.
Despite that indictment, Thornburgh and Drug Enforcement Agency administrator John Lawn had said the Panamanian authorities were cooperating with U.S. officials.
At a news conference announcing the end of the drug money laundering investigation, Thornburgh and other law enforcement officials said the government had seized a half ton of cocaine and $45 million in cash, jewels and real estate in connection with the investigation.
The government also filed civil actions in an effort to seize as much as $412 million more in U.S. assets of two banks, Banco de Occidente of Panama and Banco de Occidente of Colombia, that allegedly agreed to receive wire transfers of the laundered money.
Justice Department lawyers and court documents said the money was laundered through a variety of methods, most involving sophisticated and complex financial arrangements.
In some cases, phony records of transactions through Los Angeles jewelry dealers were used to create what appeared to be legitimate sources for the money.
Peter Djinis, a department narcotics attorney, said La Mina moved millions of dollars in cash by commercial armored trucks hired to drive back and forth between New York and Los Angeles.
Their cargo was identified as jewelry or gold to be smelted, but it actually was cash, he said. Proceeds were later wired to banks in Latin America after being obscured by fictitious invoices, bills of lading and payments for jewelry, he said.
In other cases, he said, large sums were moved through a complicated network of accounts at various banks across the country, splintering into many smaller accounts in order to make the sources difficult to identify.
Agents seized computers that were used to keep up with the transactions, and they seized high-speed money counting machines, Djinis said.
''There was a constant flow of money coming in at any one time,'' Djinis said. ''Just a staggering amount of money.''
Agents learned of the operation while operating an undercover money- launderin g ''storefront'' scheme of their own in Atlanta as part of a joint investigation by federal agencies, including the Internal Revenue Service and DEA.
Lawn said the undercover agents received complaints from clients about how long it was taking them to launder the money and were told they should imitate La Mina. Federal agents then expanded their investigation into that operation, using electronic intercepts, surveillance and pursuit of financial paper trails.
Thornburgh said that while it is difficult to determine the effect on the Medellin cartel, ''common sense tells me when you disrupt an operation that has laundered over a billion dollars in two years, you're going to force some adjustment in their operation.''
One result turned up immediately in Atlanta, where business picked up for the agents still running their undercover money laundry.
Lawn said that when La Mina was forced out of business, ''the phone was ringing off the hook'' at the Atlanta operation. The agents were so busy they laundered $4 million in three days, he said.