Feared for Her Life, Says Drug Money Defendant

A 28-year-old stockbroker from Mexico City testified Wednesday that she was tricked into joining a scheme to launder money for the Cali drug cartel and feared she would be killed if she backed out.

“When I heard they were Cali cartel, I knew I had no way out. I had to do what they said,” Katy Kissel Belfer told jurors in her Los Angeles federal court trial.

Kissel took the stand in her own defense after federal prosecutors rested their case against her and five other Mexican nationals on trial in connection with Operation Casablanca, the Customs Service’s two-year probe of international drug money laundering.

Kissel, a broker at CBI International Securities in Mexico City, told of being invited to Los Angeles on March 6, 1998, to present an investment plan to a group of Mexican businessmen.

As she was being driven to the meeting at Emerald Empire Corp. in Santa Fe Springs, she said, her driver told her that the businessmen were actually members of the Cali cartel.

She said she was shocked and asked to go back to the airport, but yielded to the driver’s insistence that she attend the prearranged meeting.

In fact, the men at the meeting were undercover Customs Service agents carrying out a sting operation against Mexican banks and financial institutions.

Federal prosecutors have built their case around secretly videotaped meetings like the one Kissel attended at which recruits to the money-laundering scheme were told they were being asked to handle Cali cartel proceeds.

But Kissel’s attorney, Michael Pancer, maintains that the undercover agents’ so-called Cali speech served to intimidate his client, causing her to fear for her and her family’s lives. He has outlined a defense of illegal entrapment and duress.

On the stand Wednesday, Kissel traced her involvement in the scheme to a chance encounter at a Jewish community social event in Mexico City. A man with whom she struck up a conversation called her months later, offering to introduce her to a representative of a group of wealthy Mexican investors living in the United States, she said.

“I was very excited because I thought it was going to be a big account for me,” she said.

A few days later, she said, she met with the representative, Rafael Gonzalez, who helped her prepare an investment plan for the businessmen. It called for putting up to $30 million in liquid short-term accounts under a variety of corporate names.

She said the plan was intended to circumvent notoriously corrupt Mexican tax auditors.

“If you have a large amount of money, for sure you’re going to have an auditor looking at your account,” she told the jury. “And for sure, he’s going to find something wrong, even if everything is right. And then he’s going to ask for money to make it go away,” meaning a bribe.

With plan in hand, Kissel flew to Los Angeles a few days later. She was met at the airport by Ernesto Martin De La Torre, a driver sent by her hosts.

Once they were on the freeway, she said, Martin told her about the Cali cartel connection.

“I told him I just wanted to go back,” she testified, but she said Gonzalez insisted she meet with the businessmen first, since they had paid for trip to Los Angeles.

“I was in the car with a strange person. It was late at night. There was no way for me not to go to the meeting,” she testified.

Asked by Pancer how she felt when she came face-to-face with her hosts at the Santa Fe Springs meeting, Kissel said, “I felt scared and intimidated, sir.”

After giving her the Cali cartel speech, undercover operative Fred Mendoza tried to reassure Kissel, saying, “We are not bullies, we are financiers,” according to a transcript of the videotaped meeting.

But under questioning by Pancer, Kissel said she was not reassured. “I thought he wanted to let me know in an easy way that he was very dangerous,” she said.

If she had walked out of the meeting, she said, she was convinced “they would have killed me.”

Three days after her trip to Los Angeles, Kissel arranged an urgent meeting with a Mexico City lawyer who has represented her family in business matters.

Testifying before Kissel took the stand, attorney Jose Salvador Rocha Rodriquez said she was “very upset” when she came to his office on March 9, 1998. Because of rules against hearsay, he was not allowed to divulge what Kissel told him. But he said he told her she had two alternatives, one of which involved “taking care of her own safety and her family’s.”

Kissel was arrested last May 16 with scores of other defendants who were lured back to the United States on a ruse. She has been in custody since then, accused of laundering $1 million in drug proceeds.