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CONFESSIONS OF A
MONEY LAUNDERER by Kenneth Rijock
MONEY LAUNDERER by Kenneth Rijock
Financial Crime Consultant, for World-Check
Confessions of a Money Launderer - Part 54
10 February 2008
I would soon be transferred from that small-town jail, as I had achieved the goal every inmate aims for; a sentence reduction, in this case, a fifty per cent cut. As the man said, "you will not want to leave that jail, " and, strange as it sounds, he was right. The creature comforts experienced at the Gilchrist County Jail would be missed, for wherever I went in the future; the conditions of my confinement would never be that good. But we're getting ahead of ourselves. Before leaving, it is important to describe the jail's unique usefulness to law enforcement. I knew one of the trustees at the jail, for he was a former client, and he had been specially placed there by a US law enforcement agency, because he could assist that agency in ways that could not be accomplished elsewhere. What am I talking about? Read and learn about some of the more obscure tactics utilised by law enforcement to combat the money laundering of narcotics proceeds.
My client, who had not yet been sentenced, but faced a long term of imprisonment as a kingpin, was made a trustee for a good reason;
The other activity being operated by my client from the jail was a cooperative venture with a woman whose late husband, a major trafficker, had died in prison from illness. She was operating a way-station for money couriers moving drug profits from the Northeast US to Miami, for entry into the Black Market Peso Exchange. The BMPE: where the drug profits in dollars flow to a free-trade zone like Panama or Aruba, and are used to buy goods for legitimate Colombian businessmen who need hard currency. In exchange, the traffickers get the Pesos that they need to build that office building in downtown Bogota or Medellin.
The money launderers cleverly utilised college students for their anonymous profile. They carried the cash south into Florida as a dangerous means of supplementing their income.
A task force in Miami was assigned the duty of monitoring these university couriers, and frankly, confiscating their drug money from time to time in a well-thought out scheme. Here is how it worked:
This should give you a sample of the tactics used to take a "bite out of crime " in anti-money laundering law enforcement.
Next week: I move on.
- Trustees actually had what I can only describe as small open apartments in the jail, which allowed them to roam around freely, to serve as the work cadre. (See last week's Chapter, where their duties, vending food and other requested items to the inmates are described in detail).
- The most prized item was a telephone installed inside their "cell." This was a necessary accessory for their cooperative duties for law enforcement.
- Remember, in the global narcotics trade, information about criminal cases in other countries, before the age of the Internet, was very difficult to obtain. If a trafficker was arrested somewhere in the world, his suppliers, customers, and associates might not necessarily know this, especially if the criminal routinely used an alias, street name, or nickname when dealing with his contacts.
- Criminals who were arrested were likewise not real anxious that the people with whom they did business learnt about their capture, for outstanding debts, due to be paid in the "ordinary course of business" were rarely forwarded on once details of an arrest surfaced. I believe it was a combination of the still-free criminal taking advantage of his now-incarcerated business associate, and a fear that a post-arrest payment might somehow expose the sender to being identified and arrested. In either event, spreading news of one's arrest was not good for business. Also, some criminals did not want their parents or siblings, who often had normal law-abiding lives, from hearing the bad news. This provides an opportunity for an incarcerated defendant to contact former associates, pretend that he is still working and free, and transact illegal business as though nothing had changed.
- Therefore, many overseas contacts of the arrested kingpin had no idea that he was in custody, allowing him to reach out to them, under the loose supervision of a law enforcement agent, and pretend that he was still engaged in narcotics trafficking, or money laundering, or some other illicit activity. To obtain a 5K1.1 motion from the appropriate Assistant US Attorney, which allowed the judge to depart downward from the then-mandatory US Sentencing Guidelines, one needed to render "Substantial Assistance" that resulted in the arrest of additional criminals, or the acquisition of criminal profits by the government.
- What was going on in that small "suite" that my client occupied was a supervised money laundering pipeline, whereby narcotics profits were being transmitted back to Colombia, under the close watch of US law enforcement, who would thus learn exactly how the money was flowing, where, and how the assistance of financial institutions, non-bank financial institutions, and commercial businesses figured into the equation. It was the gathering of intelligence in its purest form.
- Unfortunately, there is an unhappy ending to this part of the story. At one point some senior law enforcement executive decided to shut down the pipeline whilst it was in operation, meaning that certain funds in transit were seized, and never reached their intended destination. The worst part is that my client had no advance notice of the termination of the programme.
- This resulted in the death of those individuals in Colombia who were ultimately responsible for the money reaching its ultimate recipient. Just one more example of someone not thinking through the logical consequences of his actions. Either that, or the official did not care about the probable results.
The other activity being operated by my client from the jail was a cooperative venture with a woman whose late husband, a major trafficker, had died in prison from illness. She was operating a way-station for money couriers moving drug profits from the Northeast US to Miami, for entry into the Black Market Peso Exchange. The BMPE: where the drug profits in dollars flow to a free-trade zone like Panama or Aruba, and are used to buy goods for legitimate Colombian businessmen who need hard currency. In exchange, the traffickers get the Pesos that they need to build that office building in downtown Bogota or Medellin.
The money launderers cleverly utilised college students for their anonymous profile. They carried the cash south into Florida as a dangerous means of supplementing their income.
A task force in Miami was assigned the duty of monitoring these university couriers, and frankly, confiscating their drug money from time to time in a well-thought out scheme. Here is how it worked:
- The aim was to simply confiscate the drug profits, and ignore arresting the couriers. When a seizure was made, the hapless courier was co-opted into the scheme, not arrested, but bluntly told that he was to inform the task force of all his travels and drops. In essence, the task force was running the couriers, not the traffickers.
- Every third or fourth trip, each courier's money would be confiscated, and he was instructed to advise his bosses that he had been intercepted in transit. The aim of the programme was solely to interdict a large portion of the proceeds of crime, and forfeit it to the US government.
- Perhaps the most interesting part of this story was the compensation paid to the law enforcement agent who ran one of its operations. His incentive was a fee of ten per cent of the seizures. After he earned $900,000 the first year, an anxious government cancelled the incentive phase. The agent retired not long after that, to work in the private sector, in the compliance field.
This should give you a sample of the tactics used to take a "bite out of crime " in anti-money laundering law enforcement.
Next week: I move on.
The facts and opinions stated in this article are those of the author and not those of World-Check. World-Check does not warrant the accuracy of any facts and opinions stated in this article, does not endorse them, and accepts no responsibility for them.
Read more in this exciting series
11 April 2010
8 March 2010
8 February 2010
24 January 2010
6 December 2009
27 September 2009
9 August 2009
3 August 2009
30 March 2009
9 March 2009
2 March 2009
22 February 2009
18 February 2009
26 January 2009
18 January 2009
11 January 2009
5 January 2009
29 November 2008
24 November 2008
17 November 2008
8 November 2008
3 November 2008
27 October 2008
20 October 2008
13 October 2008
4 October 2008
28 September 2008
20 September 2008
15 September 2008
15 June 2008
8 June 2008
1 June 2008
26 May 2008
19 May 2008
12 May 2008
4 May 2008
27 April 2008
20 April 2008
13 April 2008
31 March 2008
18 March 2008
4 March 2008
25 February 2008
16 February 2008
10 February 2008
3 February 2008
27 January 2008
20 January 2008
14 January 2008
6 January 2008
16 December 2007
9 December 2007
1 December 2007
25 November 2007
18 November 2007
11 November 2007
3 November 2007
27 October 2007
21 October 2007
14 October 2007
7 October 2007
1 October 2007
23 September 2007
16 September 2007
3 June 2007
27 May 2007
21 May 2007
6 May 2007
30 April 2007
22 April 2007
15 April 2007
8 April 2007
2 April 2007
24 March 2007
19 March 2007
12 March 2007
5 March 2007
25 February 2007
19 February 2007
12 February 2007
4 February 2007
28 January 2007
22 January 2007
15 January 2007
7 January 2007
2 January 2007
16 December 2006
10 December 2006
3 December 2006
27 November 2006
19 November 2006
11 November 2006
5 November 2006
29 October 2006
22 October 2006
16 October 2006
9 October 2006
2 October 2006
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