Broker in Drug Money Sting Gets Hard Grilling

A Mexico City stockbroker who says she feared she might be killed if she refused to join an international drug money-laundering network came under intense cross-examination Thursday from a federal prosecutor who portrayed her as a willing and eager conspirator.

Katy Kissel Belfer, 28, was pressed to explain why she joked and laughed and gave warm hugs to two purported members of the Cali drug cartel whom she said she feared.

Kissel said she was simply “over-acting.”

The episode was recorded on a hidden video camera in a Santa Fe Springs warehouse used by Customs Service investigators to carry out a two-year sting operation against Mexican and Venezuelan financial institutions.

Kissel is on trial along with five other Mexican nationals in the first of four trials stemming from the probe, known as Operation Casablanca. More than 100 people and three Mexican banks were indicted last May.

Taking the stand in her own defense, Kissel testified that she thought she had been invited to Los Angeles to present a legitimate investment plan to a group of wealthy businessmen.

She testified that only after her arrival was she told about the Cali cartel connection, and, fearing for her life, agreed to take part in the scheme.

But Assistant U.S. Atty. Duane R. Lyons tried to persuade the jury Thursday that Kissel’s professed fears were faked and that she was eager to enrich herself by laundering money for the drug cartel.

Reading from a transcript of the March 6, 1998, recruitment meeting in Santa Fe Springs, Lyons said it showed that Kissel tried to finesse her hosts into buying commission-generating Eurobonds and certificates of deposit, instead of running their proceeds through highly liquid money market funds for which no commissions are charged.

Kissel had testified earlier that the cartel wanted to funnel up to $30 million through the brokerage where she worked, CBI, in Mexico City. Ultimately, Kissel laundered $1 million through a money market fund, she acknowledged,

Lyons also questioned why Kissel asked at the end of the meeting about payment for her work, inasmuch as her hosts had indicated a preference for money market funds. The prosecutor called it an unlikely comment from someone who feared for her life.

Kissel said she thought at that time that the group still might invest in Eurobonds or CDs, which carry a 2% brokerage fee.

The prosecutor also tried to undercut Kissel’s testimony that she intended to pull out of the scheme when she flew to Las Vegas May 16, 1996, to attend a party arranged by undercover operative Fred Mendoza, who passed himself off as the leader of the money-laundering network. The event was a ruse to lure Mexican suspects back to the United States, where they were arrested.

Lyons noted that Kissel packed a swimsuit, indicating she was planning to enjoy herself in the vacation spot. “I like to swim,” she answered.