Key Figure in Cartel Case Pleads Guilty

A key defendant in Operation Casablanca, the massive drug money laundering case against Mexican banks and bankers, pleaded guilty Monday in Los Angeles federal court.

Victor Manuel Alcala Navarro, a reputed money launderer for the Juarez drug cartel, entered his plea to 28 criminal counts three weeks before he was to go on trial on money laundering and conspiracy charges.

Alcala, known as El Doctor, fell prey to a sting operation by undercover U.S. Customs agents, and unwittingly helped them penetrate a network of allegedly corrupt banking officials inside Mexico.

As a result, U.S. prosecutors were able to indict three of Mexico’s most prominent banks, Bancomer, Banca Serfin and Banco Confia, along with more than a score of Mexican bankers.

Under federal sentencing guidelines, the 36-year-old Alcala could be jailed for about 30 years in the Mexican bankers case. But he also faces the possibility of a life term in a related case in which he is accused of running a continuing criminal enterprise for the Juarez cartel.

Alcala’s lawyer, Victor Sherman, said his client had rejected a plea agreement proposal by prosecutors because “the government wanted him to admit certain facts that would have exaggerated his role in the case.”

Assistant U.S. Attys. Duane Lyons and Joseph Brandolino disputed Sherman’s portrayal. They described him as a major figure among drug money launderers.

Sherman said Alcala stood a better chance by pleading guilty without a deal and counting on a fair sentence from trial Judge Lourdes G. Baird.

The defense lawyer also made it clear that Alcala has no intention of testifying against other defendants or helping the prosecution in hopes of receiving a lighter sentence.

“He’s not going to cooperate with the government--no testimony, no background, no intelligence, no nothing,” Sherman said.

When asked if Alcala might be concerned about possible retaliation against his family, who operate a mortuary in Tepatitlan, Mexico, Sherman said, “That’s possible.”

Two of Alcala’s brothers are also awaiting trial in the case. A third brother is a fugitive and a cousin previously pleaded guilty.

They were among more than 100 people indicted last May along with the three Mexican banks after a 2 1/2-year investigation that was described by U.S. authorities as the biggest drug money laundering case ever.

Only about 40 suspects were captured, however. The largest contingent, which included Alcala, was taken into custody after being lured to Las Vegas to celebrate the success of the money laundering scheme.

According to prosecutors, Alcala was a money broker for the Juarez cartel, entrusted with collecting and laundering millions of dollars in cash collected from drug deals throughout the United States.

In late 1995, a chance encounter led him to a group of undercover customs agents posing as middlemen for the Cali drug syndicate. They offered to help him launder his cash through U.S. banks.

Alcala became a frequent visitor to the agents’ offices in a Santa Fe Springs warehouse, boasting about his ties to corrupt Mexican banking officials and politicians, according to government affidavits.

With the consent of his superiors in the Juarez cartel, Alcala ultimately agreed to help his new friends launder money through Mexico.

Over the course of about 18 months, Alcala recruited officers from 12 of Mexico’s biggest banks to set up straw accounts into which nearly $64 million in narcotics proceeds were deposited.

After each deposit, the bankers would issue drafts payable in U.S. dollars and drawn on their banks’ accounts at correspondent banks in the United States.

The drafts are highly liquid and difficult to trace, excellent for any money laundering scheme. Moreover, they can be deposited in any U.S. bank in any amount without the depositor having to fill out a currency transaction report, normally required for amounts of $10,000 or more.

Alcala also was accused of setting up a business front in Tijuana to handle communications with Santa Fe Springs about wire transfers and to issue instructions to Mexican bankers in the money laundering network.

For his services, Alcala received a 3.5% to 4% cut of the laundered money, out of which he paid the cooperating Mexican bankers an average of 1%, according to government documents.

All told, the Customs Service said, he was paid more than $2.2 million in commissions.

Alcala is the fifth defendant in the Mexican bankers case to plead guilty. At least two of the banks, Bancomer and Banca Serfin, have been involved in plea negotiations with prosecutors. The bankers’ trial, the first of four, is set to begin March 29.