Bank Records Sought in Drug Chase : 173 Institutions Told to Provide Data on Medellin Accounts

The Bush Administration announced today that 173 banks have been ordered to produce records of more than 750 bank accounts into which nearly $400 million in illegal Colombian drug profits were deposited.

Atty. Gen. Dick Thornburgh and Treasury Secretary Nicholas F. Brady said more than three-quarters of the accounts have been frozen while the government starts legal proceedings to seize the money deposited.

“Money is the drug traffickers’ lifeblood. If we can seize it or disrupt its flow, we can strangle their operations,” Thornburgh said in a statement announcing the action involving banks across the country.

U.S. officials said the action is designed to penetrate the secrecy surrounding the financial network of Colombia’s Medellin cartel, which is believed to be responsible for most of the cocaine imported into the United States.

Records were demanded from some of the biggest and best-known banks in the country. The majority of the banks are in Florida and New York City.

Among the better-known banks listed are Bank of America, Wells Fargo Bank, Chase Bank International, Citibank International, First National Bank of Chicago, Marine Midland, Chemical Bank and Bankers Trust Co.

“These bank records will allow us to continue the hunt for more laundered drug money through further tracing of these accounts,” said Brady, who called it one of the most significant law-enforcement undertakings involving bank account seizures.

“For the first time we have been able to trace cash proceeds directly from cocaine and crack sales on the streets of American cities to foreign bank accounts owned by the Medellin cartel,” he said.

Through a complicated set of wire transfers involving banks in eight foreign countries, $400 million ended up in the banks from which the records are being sought, officials said. Other money was invested in foreign countries or was used to buy supplies and equipment for cocaine production, officials said.

Last January, after the ouster of Gen. Manuel A. Noriega, who was wanted on U.S. drug-trafficking charges, federal agents went to Panama and obtained the records of bank records linked to cartel money launderers, Justice Department officials said.

Justice Department trial attorney Peter G. Djinis said investigators traced the money “dollar for dollar” through banks in Colombia, Panama, Uruguay, Luxembourg, Switzerland, Britain, Canada and Austria.

Officials said they do not know how much of the $400 million remains in the accounts. But Djinis said the records are expected to help investigators continue their pursuit of the international money trail left by the cocaine dealers.

The move represented the fourth phase in Operation Polar Cap, which became public a year ago and involved the breakup of the largest laundering operation of drug money.

There was no evidence the banks in which the accounts were kept were “anything other than unwitting service providers,” said David Runkel, the department’s chief spokesman.

But Djinis said a review of the bank records may lead investigators to a different conclusion. “We are not ruling out anything,” he said.