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112 Nabbed On Drug Money Rap

Federal law enforcement officials arrested 112 people and seized $35 million, concluding a three-year money-laundering investigation involving Mexican banks and two drug-smuggling cartels, the Clinton administration said Monday.
Dan Rather's Commetary On The Money - Laundering Case
The Treasury Department, in a statement, called it "the culmination of the largest, most comprehensive drug money-laundering case in the history of U.S. law enforcement."

In addition to money, officials seized more than 2 tons of cocaine and 4 tons of marijuana.

"Today is a very bad day for drug dealers in this hemisphere," Attorney General Janet Reno said.

The undercover operation, disclosed in indictments unsealed today in U.S. District Court in Los Angeles, was led by the Customs Service and known as "Operation Casablanca."

It was announced at a news conference by Reno and Treasury Secretary Robert Rubin..

"By infiltrating the highest levels of ... international drug trafficking ... Customs was able to crack the elaborate financial schemes the drug traffickers developed to launder the tremendous volumes of cash acquired as proceeds from their deadly trade," Rubin said.

One of the indictments charges 26 Mexican bank officials and three Mexican banks: Confia, Bancomer and Banca Serfin.

The indictment alleges that officials from 12 of Mexico's 19 largest banking institutions were involved in money laundering. Bankers were implicated in meetings with undercover law enforcement officials, the Treasury Department said.

A second and third indictment cover alleged money launderers linked to the Cali drug cartel of Colombia and the Juarez cartel of Mexico.

The Treasury Department said the case represents the first time Mexican banks and bank officials have been directly linked to laundering profits for the cartels.

"Today, we have hurt the drug cartels where it hurts most in their pocketbooks," Rubin said.

Since Saturday, Customs Service agents and other law officers have arrested 14 Mexican banking officials as well as 16 members of the Cali and Juarez cartels.

Operation Casablanca was launched in November 1995 when the Customs Service's Los Angeles office learned that cartel members were laundering proceeds of drug sales through branches of Mexican banks along the U.S. border.

During the investigation, undercover agents posed as middlemen for cartel brokers and bankers who agreed to launder their funds. The investigation found that nearly 100 U.S. bank accounts were used.

But "no evidence to date has been foud that officials from those U.S. banks were aware of the source of the money," the Treasury Department said.

Separately, the Federal Reserve said it had issued "cease and desist" orders naming five foreign banks Banca Serfin, Bancomer, Banamex and Bital of Mexico and Banco Santander of Spain. Each operates offices in the United States.

The order requires the banks to implement new anti-money laundering procedures.

Written by Dave Skidmore
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