Woman Cites U.S. Trickery in Drug Case

A 26-year-old Mexican investment counselor says she was tricked into becoming involved in the biggest drug money laundering sting in U.S. history, and then threatened with physical harm when she tried to back out of the deal.

Katy Kissel Belfer, who is charged with laundering $1 million in drug cartel money, contends that federal agents failed to prevent threats and other misconduct by undercover operatives employed in the probe.

In documents filed last week in Los Angeles federal court, Kissel asked a judge to dismiss her indictment or, failing that, to sever her trial from that of other defendants in the case.

She also charged that U.S. authorities violated Mexican sovereignty and treaty obligations by conducting the cross-border probe without Mexico’s consent.

It was the first of what promises to be many defense attacks on Operation Casablanca, the nearly three-year-long U.S. Customs investigation that resulted in the indictment in May of more than 100 people, including more than 25 bankers from Mexico and Venezuela.

Assistant U.S. Atty. Joseph A. Brandolino said the prosecution will file a response to Kissel’s claims. “At that time we will set out the real facts in this case,” he said, “and we will demonstrate that the motion is without merit.”

In his court papers, defense attorney Michael Pancer of San Diego said that Kissel, who worked for CBI Casa de Bolsa in Mexico City, was conned into believing she was getting involved in a legitimate investment deal.

While attending a social event, he said, a business acquaintance told her of a man named Rafael who represented some wealthy investors looking to place large amounts of money.

A meeting was arranged with Rafael--he was not further identified by the defense--after which Kissel went to Los Angeles to meet the purported investors.

Not until she arrived in Los Angeles, Pancer said in his court papers, was Kissel told by undercover customs agents that the “investors” were high-ranking members of the Cali drug cartel who wanted her to launder a large amount of money from drug transactions.

Kissel said in the court documents that she feigned willingness to go along with the deal because she was reminded that the Cali cartel had a substantial presence in Mexico and was not reluctant to use violence.

When she returned to Mexico, however, she said she told Rafael she wanted to drop out, but he warned her that doing so could result in physical harm to her and her family.

“These threats appeared genuine,” the court documents said, “especially in light of the fact that ‘Rafael’ made it clear that he and the cartel had knowledge of intimate details of her day-to-day activities, of which he made her aware.”

Although the prosecution maintains that Rafael was not a government agent, Pancer said the mysterious intermediary worked directly or indirectly at the instructions of the government informant in the case.

Kissel was arrested several weeks after she laundered the $1 million while attending a Las Vegas party hosted by the same government informant cited by Pancer.

That informant apparently was given no instructions to limit his recruitment efforts to those in the Mexican financial community who showed a predisposition to launder money, the defense attorney said.

“I believe that the government enlisted the assistance of an informant whose job it was to entice as many members of the financial community in Mexico as possible to become involved in a scheme to invest money for persons they would eventually be told were members of the Cali cartel,” he wrote.

By casting the largest net possible, he added, it was inevitable that the sting would draw in innocent people.

Pancer also argued that the charges should be thrown out because U.S. authorities violated Mexico’s sovereignty as well as the U.S.-Mexican extradition and mutual legal assistance treaties.

Although U.S. authorities denied it, Mexican President Ernesto Zedillo and Foreign Minister Rosario Green protested that officials there were kept in the dark during Operation Casablanca, a violation of treaty obligations. The Clinton administration later apologized.

Pancer has asked for a Sept. 9 hearing on his motions.