13 Held in Huge Money-Laundering Case : Drugs: Mexican authorities describe the arrests as a major blow to Colombia’s Medellin organization.

A Colombian who allegedly led a ring that laundered as much as $70 million in drug proceeds and shipped a ton of cocaine to Southern California each month is in U.S. custody, while 12 people identified as accomplices are being held in Tijuana, Mexican authorities said Wednesday.

Luis Fernando Mejia Pelaez, 50, was arrested at a San Diego area motel last Thursday and is charged with 174 counts of making false statements and failure to file currency transaction reports, Assistant U.S. Atty. L. J. O’Neale said Wednesday. Mejia has been a fugitive since 1986, when he was indicted by a federal grand jury in San Diego, along with eight other people, on money laundering charges, O’Neale added.

According to Mexican Federal Judicial Police, Mejia headed an organization that laundered $60 million to $70 million a month. The ring allegedly used three Tijuana auto dealerships and two currency exchange houses in Mexico to launder money for Colombian drug lords. Mexican officials said the ring also used banks in Miami, Tampa, Fla., New York and Panama to launder drug proceeds.

The Mexican authorities described the arrests, which they said resulted from a joint investigation by U.S. and Mexican police, as a major blow to the Medellin drug cartel. Although the Mexicans alleged that the ring was shipping cocaine to San Diego and Los Angeles, the U.S. indictment against Mejia does not include drug charges.

The 12 people arrested in Tijuana include three women and three Colombian men. In making the arrests, Mexican authorities also seized 42 cars from the auto lots and an undetermined amount of cash.

On Wednesday, Mexican federal judicial police issued a written statement that police are continuing the investigation and expect to make more arrests.

O’Neale said that Mejia, who was a fugitive for three years, had $50,000 in cash when he was arrested by U.S. Customs agents. He is being held in San Diego without bail at the Metropolitan Correctional Center and has a court appearance scheduled for today.

“The government requested that he be held without bail because he is a flight risk. He is in control of extensive assets outside of the United States,” O’Neale said.

When arrested, Mejia was carrying a Mexican driver’s license with a Tijuana address and a Colombian passport, O’Neale said. In addition, Mejia had U.S. tourist and business visas that were issued to him in Bogota, Colombia.

“The application and issuance of the visas to Mr. Mejia are being investigated by the State Department,” O’Neale said.

He added that Guillermina Watson was named in the same indictment with Mejia and was convicted in 1987 on 206 counts of currency violations. Watson, who was an officer at the now-closed Bank of America branch in Coronado, was sentenced to five years in federal prison and is the only person named in the indictment who has gone to trial. Watson was engaged in illegal activities without the bank’s knowledge, O’Neale said.

The U.S. indictment alleged that Watson and Mejia were involved in a scheme to launder $36 million that Watson testified came from a Colombian family which inherited a gold mine. Watson, 57, was convicted of using a San Ysidro currency exchange and area banks to launder the money in 1985 and 1986.

When sentencing Watson, U.S. District Judge John Rhoades noted that the charges against Watson did not allege that the laundered money came from drug profits. Rhoades said there was “a strong aroma but no proof” that the money came from drug sales.