Warrants Target $17.6 Million in Accounts Linked to Drugs

from Associated Press

Federal drug agents served warrants to confiscate $17.6 million in South Florida financial institutions as a nationwide drug money laundering crackdown focuses on suspicious accounts, a spokesman said Saturday.

Federal officials froze $400 million in more than 750 accounts nationally three weeks ago as part of the long-running Operation Polar Cap. Investigators have been working to pin down the origin of the funds, said Drug Enforcement Administration spokesman John Fernandes.

The seizure warrants served Friday in South Florida, covering $17.6 million, were for accounts in which investigators have concluded that there was “probable cause” to believe the money was drug proceeds, Fernandes said Saturday. He said he did not have any details on what seizure orders might have been issued in other parts of the country.

The warrants were served on bank officers for 72 accounts at 20 South Florida banks--a legal step in the process of transfering the suspected drug cartel money to federal coffers. In all, accounts had been frozen in 78 Miami banks.


The government also could prosecute bankers and the account holders after tracing the money, Fernandes said.

“If we show complicity on the part of a bank or bank official or some representative of a corporation or a front corporation or what have you, that would be a separate part of the civil action,” the DEA spokesman said.

Meanwhile, the account holders are preparing to fight the freezing or loss of funds, with some arguing they were involved in “flight capital"--sending of assets from troubled foreign countries to the United States--and not money laundering.

“It’s the only way people in Colombia can have dollars in the United States to avoid inflation and other problems with the Colombian economy,” said Fred Schwartz, an attorney for a Colombian industrialist with $600,000 in frozen accounts.

Schwartz and other attorneys say their clients bought dollars in Latin America on the black market --a huge pot of money swelled by the cocaine trade--without knowing the cash was drug-tainted.

The money then was transferred to U.S. accounts, often in violation of currency laws abroad, as a cushion against the vagaries of Latin American economics and politics.

The Justice Department obtained a court order April 16 in Atlanta to freeze accounts in 173 banks in 22 states after investigators estimated Colombia’s Medellin cartel amassed $1.2 billion from cocaine sales from 1987 to early 1989.

Federal officials believe $400 million was returned to the United States to support drug trafficking.