24 May 2005
U.S. Breaks Up Colombian Drug Cartel Money-Laundering Operation
Operation covered Europe, United States, Latin America, Caribbean
By Eric Green
Washington File Staff Writer
Washington -- U.S. authorities have broken up an international drug money-laundering operation that involved Colombian drug cartels and their illicit movement of billions of dollars annually.
In a May 23 statement, the U.S. Immigration and Customs Enforcement (ICE) agency said that its four-year investigation, dubbed "Operation Wave Runner," resulted in 11 indictments and eight arrests in the money-laundering scheme that covered the United States, Europe, the Caribbean, and Central and South America.
The eight people arrested are alleged to be responsible for laundering millions of dollars through a system called the Black Market Peso Exchange.
The peso exchange is a decades-old money-laundering operation that is estimated to handle billions' worth of illicit dollars annually. It is one of the primary means by which Colombian drug cartels convert their U.S.-based drug dollars into "clean" pesos that they can use in Colombia.
The U.S. Department of Treasury calls the peso exchange the "single most efficient and extensive money-laundering system in the Western Hemisphere." The exchange system is designed to maneuver around the currency reporting requirements of the U.S. Bank Secrecy Act, which impedes anonymous large-scale currency transactions in the U.S. financial network.
Those arrested in ICE's Operation Wave Runner are charged with violating U.S. laws by their alleged membership in several money-laundering and drug-trafficking organizations that used Puerto Rico as the base for their operations. The eight individuals under arrest are in U.S. custody in Puerto Rico, said ICE, which is the investigative arm of the U.S. Department of Homeland Security.
To date, ICE said, it has taken control of 14 domestic and international bank accounts and seized about $1.3 million in connection with the case.
Penalties for the money-laundering offense include fines up to $500,000, and/or imprisonment of 20 years.
Leo Morales, acting ICE special agent-in-charge for Puerto Rico, said: "Those who seek to use Puerto Rico as an operating ground for their illicit activity need to think twice. We are committed to identifying these money launderers and to ensuring that they are brought to justice."
The State Department says money laundering allows "crime to pay by permitting criminals to hide and legitimize proceeds derived from illegal activities."
The State Department said in its International Narcotics Control Strategy Report for 2005 that "money laundering poses international and national security threats through corruption of officials and legal systems, undermines free enterprise by crowding out the private sector, and threatens the financial stability of countries and the international free flow of capital."
The revenue produced by some narcotics-trafficking organizations can far exceed the funding available to the law enforcement and security services of some countries, the State Department's report said.
For more information, see the State Department’s Electronic Journal, “The Fight Against Money Laundering.”
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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