An international bank, nine of its officers and 75 others have been indicted on charges of laundering more than $32 million in cocaine proceeds for the infamous drug cartel based in Medellin, Colombia, federal authorities announced Tuesday.
The government also said that it had subpoenaed records from about 40 U.S. banks in what could become a broad expansion of the investigation.
“This is the most important money laundering case in U.S. Customs history,” Customs Commissioner William von Raab said. The indictments culminated a two-year sting operation that included the arrest Saturday night of nine key suspects lured to a fake wedding in Tampa, Fla.
Offices in 72 Countries
The Bank of Credit and Commerce International, headquartered in Luxembourg with offices in 72 countries, was indicted on charges that it had helped launder about $14 million through an elaborate system of money transfers involving branches in the United States, France, England, Panama, Uruguay, the Bahamas and Luxembourg.
“It is the first time an entire international financial institution and its top managers have been indicted,” Von Raab said at a news conference with Justice Department officials in Tampa.
David Rowe, an attorney for the bank in Miami, said that “we haven’t had a chance to absorb the contents of the indictments. But the bank has indicated to us that it has always attempted to abide by the laws, rules and regulations of the United States.”
Saudi Arabian Owners
The bank, owned principally by Saudi Arabians, is the world’s seventh-largest privately held financial institution, according to the trade journal American Banker. Most major banks are publicly held. The institution ranks No. 326 in deposits and No. 378 in assets among all the world’s banks, according to American Banker.
Indictments returned by a federal grand jury in Tampa named high-level managers of the bank in Los Angeles, Miami, London, Paris, Nassau and Panama City.
Also indicted were 75 alleged drug traffickers and money launderers who the government said had worked unwittingly with undercover agents to funnel cocaine proceeds to Medellin drug lords through the Bank of Credit and Commerce and other entities. Forty of the 84 indicted have been arrested.
Roberto Baez-Alcaino, 51, a Los Angeles jewelry store owner, was accused of heading a Medellin-affiliated group that smuggled cocaine into California, New York and Europe. He was arrested in Philadelphia last month on charges of secreting 2,500 pounds of the drug in anchovy cans. His wife also has been indicted.
On Tuesday, the government seized Alcaino’s Pasadena home and furnishings worth more than $2 million, his jewelry business inventory worth more than $400,000, two Rolls Royce and two Mercedes cars, a $750,000 apartment building, a pay phone business and a fight promotion business and bank accounts in Miami.
Will Seek Forfeiture
If Alcaino is convicted, the government will seek forfeiture of those assets.
Gonzalo Mora Jr., 33, of Colombia, was charged with running a Medellin-based organization that laundered narcotics proceeds from California, Florida, New York, Houston, Chicago, Detroit and Philadelphia.
Mora, three Alcaino associates and five officers of the Bank of Credit and Commerce were invited to Tampa for the “wedding” of two undercover Customs agents last weekend and wound up being arrested on the way to a preliminary “bachelor party” for the “groom.”
Taken to Fake Party
Customs spokesman Michael Sheehan said that the suspects were put up at a resort hotel, taken to the fake party in limousines and then nabbed as they stepped off elevators.
According to Sheehan, one of the startled suspects exclaimed: “This is like something out of a movie. I didn’t think you guys did this sort of stuff.”
According to the indictment, the sting began in July, 1986, when undercover agents represented themselves as professional money launderers and penetrated the Mora organization.
Agents Tape Meetings
In December, 1987, officials at the Bank of Credit and Commerce in Panama allegedly proposed using the bank’s branches for a worldwide laundering operation. Undercover agents taped meetings in Miami, Paris and London, establishing that “bank officials knew that the money they would be laundering was drug-related,” the government charged.
Under the alleged principal scheme, bank officials placed drug money in a certificate of deposit at one of several branches abroad; next they created a loan at another branch and permitted the drug traffickers to withdraw the funds; then the bank repaid the loan with money in the certificate of deposit.
The government froze all the bank’s domestic assets while federal and foreign agents searched bank offices in the United States, Paris and London.
A federal judge late Tuesday lifted an order issued against the bank that restrained it from conducting all but routine business without clearance from U.S. Marshals. The bank was allowed to resume normal business after putting into escrow $14 million, the amount the government alleged it had laundered.
sh Reports on Lance, Carter
Georgia banker Bert Lance, who served as budget director under former President Jimmy Carter, confirmed a published report that he and Carter were close to the bank’s Pakistani president, Agha Hasan Abedi. But Lance said that he knew none of the indicted officers and had no knowledge of money laundering. He also denied a June 13 Forbes magazine report that he was a compromise candidate of the bank’s feuding Saudi and Pakistani shareholders to manage the bank.