$29 Million in Suspected Drug Money Seized by U.S.

The U.S. Customs Service, concluding its most successful crackdown ever on currency smuggling, has seized $29.4 million in cash believed to be the proceeds of illegal drug sales, federal authorities said Monday. All of the money was headed out of the country, they said.

Code-named “Operation Buck Stop,” the stepped-up surveillance and inspection program resulted in 38 arrests and 81 cash seizures ranging in amounts from $15,000 to $4.2 million, according to U.S. Customs Commissioner William von Raab. Before Buck Stop, such seizures were rarely more than $100,000, he said.

The smuggling crackdown began in October in Miami. And since February, when it was expanded nationwide, customs officials working out of Los Angeles International Airport alone have confiscated about $10 million in cash.

“It corroborates the fact that Los Angeles is the major distribution and consumption center (for cocaine) . . . west of the Mississippi,” said Alan D. Walls, customs agent in charge in Los Angeles.

Illicit drug transactions are generating so much cash, authorities said, that those involved have had trouble transporting the money back to “narcotic-source countries.” As a result, a money-smuggling industry has grown up in the United States.

Buck Stop was launched after customs officials noticed that large sums of cash were being smuggled in cargo, as well as by the more conventional means of concealing money--on passengers and in carry-on luggage.

At the airport here, $2.3 million was discovered stuffed into air conditioners being shipped out of the country, $1.9 million was hidden inside a tool box and a battery charger, $816,384 was concealed in an air compressor and $298,000 was carried by two flight attendants, a man and a woman, on a Colombian airline, Walls said. All of the money is believed to stem from cocaine sales.

In Washington, Von Raab termed Buck Stop “an unqualified success” and said it will become a “permanent enforcement tool . . . in the war against illegal drugs.”

Authorities believe that seizing cash hurts drug smugglers more than seizing drugs. Cash represents a smuggler’s investment as well as profit, whereas unsold narcotics may represent a substantially smaller amount of money, they said.

The Currency and Foreign Transactions Reporting Act defines as a felony failure to report the import or export of more than $10,000. Penalties range up to five years in prison and a $500,000 fine, Walls said.

Seventeen of the arrests were made by Los Angeles-based customs authorities, Walls said. But in many of the cases involving the larger sums of money, no arrests were made, he said.

One such case was the seizure of about $104,000 in small bills from a Colombian living in Inglewood who declared the money as she was about to board a commercial airliner, Walls said.

“She said she heard a noise on the roof and went out to her backyard and found a cardboard box with $104,000 and decided she would visit her relatives in Bogota,” Walls said.

The cash was seized under a federal statute that allows authorities to confiscate suspected proceeds of illegal drug sales. In that and other cases, Walls said, authorities began asset-seizure proceedings in federal court. Rarely, he said, does anyone contest such proceedings. The woman has not contested the proceeding.

Obstacle for Smugglers

Law enforcement sources say the large volumes of cash generated by illicit drug sales--particularly cocaine from Colombia--present a significant obstacle for smugglers.

“It’s a very large problem they have in getting the money out undetected,” Walls said. “If they want to get the money out . . . with some record of it, they can do it by simply going to a bank and wiring it out. It’s not illegal to wire or physically take any amount of money out of the country. That gives enforcement agencies . . . a record of who it is that is bringing large amounts into the banks and who it is who brings large amounts out of the country. It gives us an audit trail.”

Walls said the drug smugglers want their cash “outside the United States before they do any real laundering. The operation here . . . is more of a collection situation than it is a laundering.”

Consequently, a cash-smuggling industry has sprung up to meet the need.

Sometimes the money is being collected by one outfit that does nothing but move money on behalf of several drug-selling organizations, Walls said. Money smugglers are “employed to do nothing more than collect dope proceeds and to move it . . . as quickly as they can for a piece of the action.”

In some cases, the fee for smuggling cash ranges from 2% to 3% of the proceeds; in other cases, a flat amount of about $5,000 is paid, Walls said.

“Some organizations we’re seeing easily do $12 million a month,” he said.

“The people they are employing to do it are not the top people in the drug organizations,” Walls said. U.S. citizens have been involved but they usually have family ties to drug smugglers in another country, he said.

“More often we find illegal aliens and more often they are Colombian or South American.”