U.S. Says Sting Pierced Cali Operations

Federal law enforcement authorities Friday took the cover off a nearly three-year money-laundering investigation that set up a Caribbean offshore bank to penetrate the Colombian Cali drug cartel and damaged a link between the cartel and a rising Italian organized crime group.

In addition to producing 88 arrests and the seizure of about 9 tons of cocaine and $52 million in cash and property, Operation Dinero took possession of three paintings purportedly by Rubens, Reynolds and Picasso. In addition, Italian authorities seized an arms-smuggling ship.

“The United States government and the international law enforcement community have made great strides in undermining and disrupting the Cali cartel’s financial operations--the lifeblood of their organization,” said Thomas A. Constantine, chief of the Drug Enforcement Administration, at a press conference announcing the operation.

The elaborate undercover operation, which eventually involved law enforcement officials in five countries and four federal investigative agencies, began in Atlanta in early 1992 when undercover DEA agents were commissioned by Cali operatives to set up money pickups in the United States and Europe.

Related DEA, FBI and Internal Revenue Service investigations, in which undercover operatives won the confidence of Cali representatives, also took place in Los Angeles, New York and Houston. In all, these operations laundered $39,549,209 in illicit drug funds, all of which was returned to the Cali cartel’s custody and control, DEA and IRS officials said.

With the cooperation of British authorities, Operation Dinero set up a private bank in Anguilla, British West Indies, which laundered an additional $8.9 million in non-cash, wire transactions for the Cali organization, beginning last July.

*

This led to identifying hidden accounts and assets of cartel figures, DEA and IRS officials said.

“This is the first time we’ve ever gotten to the level of operating a secret offshore bank that they felt very comfortable with,” Constantine said.

Signaling a new priority on disrupting drug trafficking operations through undercover money laundering, IRS Commissioner Margaret Milner Richardson said that the operation should force launderers to ask themselves before their next transaction whether they are dealing with a genuine bank or the IRS.

“If it’s the IRS, the terms we are offering are 20 years--and with no interest,” Richardson told the press conference at DEA headquarters.

Constantine did not appear entirely comfortable with the concept of laundering more than $48 million for the cartel, even though it produced what he and other DEA officials described as invaluable intelligence that investigators will be pursuing for months as the inquiry continues.

He described it as “a difficult decision” but noted that the cocaine traffickers would have been able to launder the funds elsewhere with impunity.

Robert E. Bender, special agent in charge of the DEA’s Los Angeles office, said:

“Probably the most significant thing (was that) the DEA was instrumental in interrupting the flow of money back to the Colombian (cartel). . . . That’s their heart and soul. . . . They can justify losing a load of cocaine but when they lose their money, that hurts them.”

In addition to the bank, several undercover corporations were set up in different locations to serve as “front” businesses in supplying loans, cashier’s checks, peso exchanges and wire transfers and to create holding companies or shell corporations for the trafficking groups, DEA officials said.

Operation Dinero established a direct link between the Cali cartel and an Italian organized crime group headed by Pasquale C. Locatelli, which had operations in France, Romania, Croatia, Spain, Greece, Italy and Canada, according to the DEA.

Locatelli had been serving a drug distribution sentence in a French prison when he escaped by helicopter in 1989. Last September, he was arrested in Spain as a result of the operation, along with alleged accomplices in Italy and Spain.

The Locatelli group, not considered one of the traditional, long established Italian organized crime organizations, used ships off the Colombian coast to pick up drugs and carry them to North Africa, where they were transferred to smaller craft from Southern Europe, the DEA said.

Recently, North Atlantic Treaty Organization forces intercepted one of the Locatelli group’s vessels, suspecting that it was smuggling arms in violation of a United Nations embargo. A search of the ship at an Italian port turned up small arms and ammunition in two of 81 containers and the Italian military is currently holding the ship and containers.

In Los Angeles, 17 arrests were reported--three of them Thursday--along with the seizure of 25 kilograms of cocaine and $2.5 million in cash.

Most of those arrested were identified as part of a local money-laundering “cell” that funneled $5 million through a Los Angeles-based DEA agent who was one of those going undercover as part of the sting.

According to an affidavit filed by the DEA in U.S. District Court in Los Angeles, Ramona Sanchez, a Spanish-speaking agent, was hooked up last spring with the Cali Cartel’s secretive Southern California money-laundering ring with the help of a “confidential informant” who gained the confidence of a top “broker” for the drug cartel.

The cartel’s representative had indicated that the Colombian drug operation wished to launder “up to $1 million in such proceeds per week,” according to the affidavit.

*

Contacted through codes punched up on her phone beeper--usually instructing her to call pay phones--Sanchez then met the money couriers in such locations as the parking lots of a Toys ‘R’ Us store in Rosemead, a Fuddruckers restaurant in Pasadena and outside a Robinsons-May department store at the Montebello Town Center. There she was given duffel bags or suitcases containing up to $872,000 by the drug couriers, most of whom were Colombian women later found to be living modestly in apartments in the area.

As with other undercover operatives in the nationwide sting, Sanchez posed as someone who had contacts with crooked bankers supposedly willing to process such large amounts without alerting authorities.

*

Ostrow reported from Washington and Lieberman reported from Los Angeles.