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3 Guilty of Laundering Millions

June 11, 1999

LOS ANGELES (AP) _ Two Mexican bankers and a lawyer have been convicted of conspiring to launder millions of dollars for a Colombian drug cartel in what prosecutors say is the largest such probe in U.S. history.

Three others were acquitted Thursday in the first federal trial stemming from Operation Casablanca, a three-year sting in which agents and an undercover informer posed as money launderers for the Cali cartel.

Dozens of people were arrested in the case that strained U.S.-Mexico relations when Mexican officials learned that U.S. agents were working in Mexico without notifying them.

Prosecutors say they broke a scheme in which bankers charged commissions to accept $70 million in cartel drug money while issuing bank drafts for the traffickers.

About 40 Mexican and Venezuelan businessmen were indicted. U.S. customs officials seized $100 million from 14 banks and dozens of individuals who were accused of laundering money for the Cali drug cartel in Colombia, and the Juarez cartel in Mexico.

Convicted of conspiracy and money laundering were Jose Reyes Ortega Gonzales, a former manager of banking operations for Bancomer in Tepatitlan, Mexico; Manuel Barraza Leon, a Bancomer branch manager in Tijuana; and Alfonso Labrada Gurrola, who worked at a Tijuana law firm that represented banks.

Acquitted were Javier Alcala Navarro; Katy Kissel Belfer, a broker at CBI International Securities in Mexico City; and Fernando Barragan Reyes, a stock broker.

The verdicts capped a trial that ran nearly two months and featured taped evidence allegedly showing defendants processing the illicit funds.

There are three other cases linked to the operation.

Last month, seven other defendants were indicted for laundering money for the Cali cartel and pleaded guilty to charges of conspiracy or drug trafficking. Their sentences are pending.

The other cases involve defendants accused of working for the Juarez cartel, and Venezuelan bankers accused of laundering millions of U.S. dollars for undercover agents posing as narcotics traffickers.

Two of Mexico’s largest banks _ Grupo Financiero Bancomer S.A. and Grupo Financiero Serfin S.A. _ have since agreed to pay $500,000 in fines and forfeit $13.6 million.

Chargers were dropped against a third Mexican financial institution, Banca Confia, which agreed to forfeit $12.1 million seized from its U.S. holdings.

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