On This Day: Largest Money-Laundering Probe in U.S. History

onthisday

On May 18, 1998, U.S. federal officials arrested over 130 people and seized $35 million in drug money bringing an end to the largest money-laundering probe in U.S. history. The federal government indicted several Mexican banking institutions and high- and mid-level bankers for laundering millions of dollars in U.S. drug money for the Cali Cartel of Columbia and the Juarez Cartel of Mexico over the previous three years. Included on the list were notable banks such as Bancomer and Banca Serfin (merged with Santander in 2005), Mexico’s second and third largest banks at the time, along with Banca Confia that had recently been purchased by Citibank.

In addition to the $35 million, officials seized two tons of cocaine and four tons of marijuana. They also froze an estimated $110 million in almost 100 banks accounts in the U.S. and $12 million in overseas accounts that had been used by drug traffickers to deposit laundered money. How did undercover agents infiltrate the vast network of U.S. and Mexican drug cartel brokers and bankers?

Operation Casablanca

Known as Operation Casablanca, the investigation began in 1995 and initially targeted Cali Cartel brokers. Eventually, undercover agents also began to work within the Juarez Cartel, since like the Cali Cartel, they collected drug profits in the U.S. that they needed moved out of the country without a trace. Head of the operation was special agent for the U.S. Customs Service John E. Hensley who later explained in a interview that Operation Casablanca ended up targeting banks and bankers, because agents kept stumbling upon many banks and bankers in Mexico offering their services to drug cartels for a four to five percent fee. The banks and bankers established fake accounts and used bank drafts to avoid money-laundering regulations. To the banks, “as long as they didn’t touch the drugs themselves, they didn’t care. It was all about the money.”

Undercover agents within the cartels picked up money through couriers, helped facilitate the laundering of over $100 million through Mexican banks, and maintained undercover footage of banks and bankers knowingly planning and participating in the drug money-laundering scheme. The operation finally came to an end when undercover agents successfully lured suspected Mexican bankers to the U.S. where they were arrested. Some of the Mexican bankers had flown into San Diego believing that they were going to attend a banking conference on money laundering. Others had been invited to a casino opening in Mesquite, Nevada where they were told they could spend their drug money without scrutiny. By the end of the day, over 130 people were arrested.

Only the Tip of the Iceberg

As former Attorney General Janet Reno explained, “Operation Casablanca built a road map that tracked the structure of international drug cartels from the kingpins to the couriers and the bankers in between.” Operation Casablanca revealed how big banks played a role in cartel money laundering, but it didn’t cripple the drug cartel or bring an end to their money-laundering practices.

  • Last year, federal officials raided 75 L.A. locations and businesses linked to trade-based money laundering of drug profits. They seized $90 million ($70 million in cash) including $35 million stuffed in banker boxes in one condo and $10 million in duffel bags inside a mansion in Bel-Air.
  • A recent report by NPR explains how Mexican drug trafficking organizations like the Sinaloa Cartel continue to rely on the global banking system to launder their estimated profit of $19 to $29 billion a year.
  • The head of the United Nations Office on Drug and Crime claimed that during the 2008 financial crisis, illegal money kept the banking system afloat. The $352 billion of drug profits was absorbed into the global financial and economic system since the illegal money was often the only capital available to banks on the brink of collapse.

Receive updates:      
You can always unsubscribe by clicking on the link at the bottom of each e-mail.

  • Wiki leaks

    i want Venezuelan money laundering company, Venezuelan moneylaundering bankers kindly contact me
    info.goodwillexports@gmail.com

    WhatsApp
    +919626668555

  • Wiki leaks

    i want USA moneylaundering company, USA moneylaundering bankers