Money-Launder Probe Cracks Top Drug Rings

A massive undercover money-laundering investigation has led to the arrest of three of Colombia’s top cocaine traffickers in an operation that for the first time penetrated the highest levels of Latin America’s elusive narcotics networks, U.S. Atty. Gen. Edwin Meese III announced Wednesday.

Joined by Panama Atty. Gen. Augusto Vallalez at a news conference in Los Angeles, Meese said the investigation, undertaken with the help of Panamanian authorities, led to the breakup of two major drug trafficking rings and the seizure of more than nine tons of cocaine valued at $270 million.

“This is the largest and most successful undercover investigation in federal drug enforcement history. The results are unprecedented,” Meese said of the three-year probe code-named “Operation Pisces.”

A series of 17 federal indictments and 30 criminal complaints unsealed Wednesday name 115 members of two coast-to-coast drug rings and a variety of money-laundering organizations uncovered by law enforcement agents during the probe. Nearly 50 narcotics suspects were taken into custody Wednesday, bringing total arrests to nearly 400, Meese said.

Agents Laundered Drug Money

The operation, in which undercover agents laundered drug money through a variety of Panamanian bank accounts, provided the first major test of Panama’s strict new drug trafficking laws, which provide government officials with access to bank records of suspected drug traffickers and impose tough penalties for laundering drug profits.

“Panama is willing to cooperate, due to its new legislation, with any organization that wishes to fight drug trafficking,” Vallalez said. “Operation Pisces is proof of what we’ve been doing. In Panama, we don’t talk, we do. We act.”

Federal authorities said the operation was unusual because it allowed U.S. drug agents to set up their own international money laundering network, through which they could do business with top financial officers of the drug underworld in a way never before attempted.

“This is the first time we’ve ever been at this level in Drug Enforcement Administration history. We’ve never been able to penetrate this far,” said Tony Ricevuto, the agent who headed the operation.

Undercover agents in Los Angeles, New York and Miami became key contacts for a variety of narcotics traffickers seeking to launder drug profits through a series of government-run bank accounts in Panama. Business grew at a surprising rate as existence of the money-laundering operation spread by word-of-mouth through cocaine-trafficking circles.

Highly Publicized Seizures

Using information provided by the undercover operation, local police departments across the country over the past several months made a series of highly publicized seizures of cash and drugs--including a record 1,900 pounds seized by the Los Angeles Police Department in March.

“Here in L.A. alone we (seized) over $19 million” of the money secretly laundered by federal agents, Ricevuto said.

Among about 50 narcotics suspects arrested Wednesday were three Colombian nationals described as major financial links in the Colombian cocaine network who provided U.S. undercover agents contacts with major cocaine distributors.

Jose Auli Lopez-Chacon, 37, Anibal Zapata, 41, and Jacobo Wasserman, 46, were arrested in Miami as they arrived on flights from Colombia at the request of undercover agents.

“We just asked them to come to the United States, and they did. Believe it or not,” Ricevuto said.

The operation also resulted in the seizure of more than $49 million in assets from drug distributors, including an $800,000 helicopter and 15 airplanes.

“This point is especially worth noting. A drug cartel might survive the indictment and conviction of its leaders, but it cannot survive a substantial loss in its assets,” Meese said.

Much of the proceeds of the operation will be distributed to local law enforcement agencies that participated in the probe.

The Los Angeles Police Department, which assigned 70 agents to the probe, received a check Wednesday for $96,223. The Torrance Police Department received $83,205.

“This is clearly the most remarkable large-scale operation in the history of the U.S. in terms of dealing with drugs,” said Los Angeles County Dist. Atty. Ira Reiner, who was joined by the leaders of 10 Southland agencies that participated in the operation.

They were the Los Angeles Police Department, the state Department of Justice’s Bureau of Narcotics Enforcement, the Orange County Sheriff’s Department and police departments in West Covina, Simi Valley, Torrance, Anaheim, Santa Ana, Newport Beach and Pasadena.