$11.6 Million Seized as Ring Handling Drug Cash Is Cracked

Capping a five-month undercover investigation, federal authorities disclosed Monday the seizure of $11.6 million in cash and 225 pounds of cocaine in the breakup of a nationwide ring that laundered millions of dollars for South American drug traffickers.

U.S. Atty. Robert C. Bonner in Los Angeles described the money seizure as the largest ever in a single coordinated drug case. The cocaine, estimated to be worth $15 million to $20 million on the street, and $4.5 million in cash were seized at various locations in the Los Angeles area during the past week. The rest of the money was seized in Miami.

Criminal complaints were filed against five individuals, charging them with conspiracy to aid others in the possession and distribution of cocaine and conspriacy to defraud the United States with a nationwide money-laundering operation.

In effect, authorities said, the ring provided dope dealers with an illicit financial service for a fee.

Seized in Miami

The five defendants were identified as Carlos Sarmiento-Arechederra, Roberto del Pino Sousa, Enrique Fernandez and Oswaldo Vera, all Venezuelan nationals, and Luis Morales of Uruguay. Sarmiento-Arechederra, Vera and Pino Sousa were arrested Friday in Miami. Fernandez, a Seal Beach resident, was arrested in Los Angeles and Morales in New York.

Operating from Venezuela and Colombia, an affidavit said, Sarmiento-Arechederra and Pino Sousa would arrange for cocaine dealers with millions of dollars derived from drug sales that needed to be laundered to contact Fernandez in Los Angeles and Vera in Miami.

The sums were large. On one such occasion last October, investigators said Vera accepted $1,050,560 in drug funds and received an $18,435 commission. Fernandez is accused of receiving $809,395 on Dec. 3 and and taking $16,520 in commission.

After accepting the money, investigators said, members of the alleged ring would deposit the illict funds in financial institutions, then have the drug profits sent to banks in New York and Florida and outside the United States, for example, Panama.

Undercover Operatives

In explaining the investigation, the government said the defendants thought they were employing individuals who, for a fee, could insure that the the currency transaction reports required by federal law for sums in excess of $10,000 would not be filed with the Internal Revenue Service. In fact, they were dealing with federal undercover operatives.

Ultimately, financial institutions that cooperated with the government did file currency reports.

Assistant U.S. Atty. Brian Sun confirmed that Security Pacific National Bank was one of the financial institutions that cooperated, but he declined to name the other institutions.

During a five-month period from September to February, the government said the Sarmiento-Arechederra organization made 23 transactions at cooperating financial institutions in Southern California.

The laundered millions were to have been returned to South American drug syndicates by cashier’s checks, wire transfers or by smuggling of cash out of the country to continue the cycle of pouring drugs into the United States and receiving millions of dollars in return.

In this case, however, federal undercover agents seized the drug money.

Bonner described money-laundering as a “tremendous problem” in Southern California, because the region is a major market for selling cocaine.

Bonner said the undercover surveillance, dubbed Operation Greenback, was composed of special agents from the Internal Revenue Service, U.S. Customs Service, prosecutors from the U.S. attorney’s office and local law enforcement officials from Los Angeles and Orange counties. The coordination of the several agencies involved in the operation was made possible through the President’s Organized-Crime Drug Enforcement Task Force, Bonner said.