Family in Money-Laundering Case Leaves Trail of Betrayal

The arrest of Luis Fernando Mejia Pelaez last week in a La Jolla motel room is the latest chapter in a four-year U.S. investigation of a Colombian money-laundering family whose members surprised investigators with their cunning, aplomb and double-crossing.

From 27 volumes of court documents and interviews with government officials, a picture emerges of family members who did not hesitate to drag their mothers and elderly grandmother into a life of crime and just as quickly turn on them if it meant avoiding a prison sentence.

The reputed ringleaders were so brazen that one suspect who fled the United States waved goodby at two frustrated government agents who followed her but were helpless to stop her. Another family member who was arrested avoided deportation and a lengthy prison sentence by offering to testify against a central figure in the case, and, if need be, against his mother and grandmother.

Two years later, Mexican authorities have implicated him in a second money-laundering ring with ties to the Medellin drug cartel. The Tijuana-based ring is allegedly run by Mejia, Mexican police said.

Before his arrest, Mejia, 50, had been a fugitive since 1986, when he was named in a 194-count indictment returned by a federal grand jury in San Diego. Also indicted for currency violations with Mejia were his three sisters, his then-81-year-old mother, a brother-in-law and a nephew.

Throughout the investigation, U.S. officials expressed astonishment at the lack of family loyalty sometimes displayed by the suspects. Officials familiar with the case, who requested anonymity, called Cecilia Mejia, Luis Mejia’s sister, the brains of the operation.

Authorities said they believe that Cecilia Mejia dragged her sisters and mother into a scheme to launder Colombian drug money through several San Diego-area banks and a San Ysidro currency exchange.

After months of investigation, frustrated agents from the U.S. Customs Service and the Internal Revenue Service followed Cecilia Mejia to Miami, flying in the same plane, and watched her board a flight to Colombia. The woman, who knew she was under surveillance, waved goodby to the agents, who did not have an arrest warrant, as she boarded. She remains a fugitive.

Marguerite De Coninck, the Mejias’ mother, paid a $500,000 fine and pleaded guilty to two felony counts for her role in the laundering scheme. At one time, an affidavit filed by prosecutors claims, the Mejia sisters made De Coninck sign 36 blank checks that were later filled in and paid to Panamanian corporations owned by Colombian drug traffickers.

De Coninck, now 84, was deported to Colombia and given credit for time served at the Metropolitan Correctional Center. De Coninck was born in South Africa, and is a citizen of Belgium, but lives in Colombia.

In the latest case, investigators received cooperation from one of De Coninck’s daughters, Beatriz Mejia, and Mejia’s son. The pair testified against other members, and in affidavits implicated Cecilia Mejia.

Beatriz said she and her sister, Cecilia, used their mother to open several accounts in the name of Sefanie Denis. On several occasions, customs agents said they followed the sisters when they took their mother to Los Angeles and Orange counties, where they would meet people in parking lots and pick up grocery bags full of cash. In one transaction alone, the Mejia sisters returned with a single grocery bag stuffed with $300,000 in cash, attorney Barton Sheela III said in an interview this week. Sheela defended a suspect indicted in the case.

When they were arrested, the suspects insisted that the cash came from the sale of gold and emeralds that came from a family-owned mine in Colombia. Christian Galindo, Beatriz Mejia’s son and a defendant in the case, reminded the trial judge that Colombia is the world’s biggest producer of emeralds. Although prosecutors speculated that the money came from the sale of drugs, they were not able to prove that it was drug proceeds that the family was laundering.

U.S. District Court Judge John Rhoades, who sentenced several of the suspects on conspiracy and currency violation charges, made it clear that he did not buy the mine story. There was “a strong aroma but no proof” that the money came from drug sales, Rhoades said in sentencing one of the ring members.

Dora Mejia, a third sister who officials said played a minor role in the scheme, is also a fugitive and is also believed to be in Colombia.

Pablo Galindo Cabrere, Beatriz Mejia’s former husband, pleaded guilty to one count of conspiracy to violate currency laws and was sentenced to six months. He lives in Las Vegas.

A central figure in the conspiracy was Guillermina Watson, a former bank official who was convicted of helping the Mejia family launder $36 million. According to court statements made by Watson, 57, to investigators, she lived in Germany during World War II and claimed to have been persecuted there because of her “non-Aryan” appearance.

Watson, 57, was convicted in 1987 on 206 counts of currency violations for her role in laundering the funds through the now-closed Bank of America branch in Coronado, the California Commerce Bank in San Diego and the Blue House Financial currency exchange in San Ysidro. Watson, who is serving a five-year prison sentence, was an officer at the Bank of America branch.

The case took another twist this week when Mexican Federal Judicial Police arrested 12 people in Tijuana and charged them with working for Luis Mejia in laundering up to $70 million of drug profits a month for Colombian drug lords. Mexican authorities also charged the group with smuggling a ton of cocaine to Southern California each month.

According to Mexican investigators, the ring laundered the money through three auto dealerships in Mexico, two currency exchanges in Tijuana and banks in Miami, Tampa, Fla., New York and Panama.

One of those arrested by Mexican authorities was Christian Galindo, Mejia’s nephew. Like his mother, Beatriz Mejia, 46, Galindo cut a deal with U.S. prosecutors and testified against Watson.

Galindo served about 18 months of a two-year prison sentence for a conviction on two counts, was fined $100 and was put on three years’ probation. In exchange for his testimony, prosecutors also agreed not to push for Galindo’s deportation to Colombia. In April 1987, Beatriz Mejia pleaded guilty to two counts, paid a $250,000 fine and was put on five years:’ probation. She is out of prison and living in the San Diego area.

Galindo, 25, represents perhaps the best example of the family’s double-crossing character, authorities say. A U.S. official familiar with Galindo’s prosecution, who requested anonymity, described him as “someone who would snitch on his mother and grandmother to avoid going to prison.”

Galindo was a fugitive when he was arrested in June 1986 in Santa Ana. According to court documents, Bernard Voldhuizen, who was sharing a motel room with Galindo, hit him on the head with a bottle of Dom Perignon champagne, sending him to the hospital. Galindo gave authorities a false name, but his true identity was established and he was sent back to San Diego. Santa Ana police found $42,000 in cash during a search of Galindo’s car, a government affidavit said.

Once in San Diego, Galindo quickly cut a deal with federal prosecutors and agreed to testify against Watson. Now, he is once again charged with money laundering, this time by Mexican authorities.

“It always happens this way. The government cuts a deal with these guys, and then they go back into business,” said Sheela, Watson’s trial attorney.

The U.S. official who worked on Galindo’s case said he could be guilty of parole violation if the Mexicans convict him of money laundering and extradited to the United States.

Before his sentencing in the earlier case, Galindo pleaded for a lenient sentence from Judge Rhoades. In a letter to Rhoades, Galindo assured the judge that “I am sure that this tragedy will make me a better person. . . . I have learned my lesson, no doubt about it, the very hard way, now I am ready to re-enter society, I am willing and able to do it.”

According to a U.S. official familiar with the Mejia case, “When he offered to testify against Watson, he made it clear that he would also testify against his mother and grandmother if it would help his case.”

Meanwhile, Luis Mejia will have several court hearings before he goes to trial next year. U.S. officials remain hopeful that Cecilia and Dora Mejia will eventually face trial in San Diego.