Panama Bank Gets Fine of $5 Million in Cocaine Case

A Panamanian bank has pleaded guilty to money-laundering charges in a major case involving drug proceeds for Colombia’s Medellin cartel and has been ordered to pay a record $5-million penalty, the U.S. attorney in Atlanta announced Monday.

The pleas stemmed from a massive investigation code-named Polar Cap, which also led to indictments in Los Angeles, Houston, Miami and New York. Trials in the Los Angeles case are scheduled for January, 1990, and May, 1990.

U.S. District Judge William C. O’Kelley in Atlanta sentenced Banco de Occidente of Panama to forfeit $5 million to the United States after accepting the bank’s guilty plea. “This sentence not only is the largest sentence ever imposed by a federal court against a bank for drug money laundering, but also marks the greatest single forfeiture of substitute assets to the U.S.,” said Robert L. Barr Jr., U.S. attorney for the Northern District of Georgia.

Barr said the judge’s action was based on provisions of the 1986 Anti-Drug Abuse Act, which provides that defendants may be ordered to forfeit “substitute” property if the actual drug proceeds cannot be seized. In this case, Barr said, the government’s investigation found that the drug money had been removed from the United States after it passed through the bank in Atlanta.

“The ability of the government to seize the bank’s assets unquestionably brought the bank to the negotiating table,” Barr said.

The plea agreement called for the government to dismiss its case against Banco de Occidente’s (Panama) parent bank, Banco de Occidente (S.A.), headquartered in Cali, Colombia. Barr said the Colombian bank has guaranteed the United States the full payment of the Panamanian bank’s forfeiture.

Largest Investigation Ever

Prosecution of the banks was part of the Polar Cap probe, which was the largest narcotic money-laundering investigation ever by U.S. law enforcement agencies.

On March 8, federal prosecutors in Los Angeles announced that a grand jury here indicted 33 wholesale jewelers and associates in the downtown jewelry district on charges of running a $1-billion cocaine money-laundering ring. Prosecutors said they also had filed civil complaints aimed at seizing $80 million in property owned by the defendants, including a 10-story building in the heart of the jewelry district.

Mark J. Werksman, an assistant U.S. attorney in Los Angeles who is one of the prosecutors in the jewelry mart cases, said Monday’s guilty pleas in Atlanta will have a positive effect on the Los Angeles cases but declined to elaborate. A federal prosecutor in Atlanta said he did not know if any Banco Occidente officials would testify in the Los Angeles cases but said evidence gathered in the case might be used here.

But Stanley I. Greenberg, a lawyer for one of the major defendants in the cases here, said that Banco Occidente was not a defendant in Los Angeles and had not been mentioned in any papers he had seen in the case.