U.S. BANKS FINANCING MEXICO DRUG GANGS
ADMITTED IN WELLS FARGO DEAL
by Michael Smith
June 29 2010
|
To contact the reporter on
this story:
Michael Smith in Santiago, Chile
at mssmith@bloomberg.net
Last Updated: June 29, 2010 00:00 EDT |
June 29 (Bloomberg) - Just before sunset on
April 10, 2006, a DC-9 jet landed at the international airport in the
port city of Ciudad del Carmen, 500 miles east of Mexico City. As
soldiers on the ground approached the plane, the crew tried to shoo them
away, saying there was a dangerous oil leak. So the troops grew
suspicious and searched the jet.
They found 128 black suitcases, packed with 5.7 tons of cocaine, valued
at $100 million. The stash was supposed to have been delivered from
Caracas to drug traffickers in Toluca, near Mexico City, Mexican
prosecutors later found. Law enforcement officials also discovered
something else.
The smugglers had bought the DC-9 with laundered funds they transferred
through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of
America Corp., Bloomberg Markets magazine reports in its August 2010
issue.
This was no isolated incident. Wachovia, it turns out, had made a habit
of helping move money for Mexican drug smugglers. Wells Fargo & Co.,
which bought Wachovia in 2008, has admitted in court that its unit
failed to monitor and report suspected money laundering by narcotics
traffickers - including the cash used to buy four planes that shipped a
total of 22 tons of cocaine.
The admission came in an agreement that Charlotte, North Carolina-based
Wachovia struck with federal prosecutors in March, and it sheds light on
the largely undocumented role of U.S. banks in contributing to the
violent drug trade that has convulsed Mexico for the past four years.
BLATANT DISREGARD FOR THE
RULE OF LAW AND BASIC MORALITY
Wachovia admitted it didn't do enough to spot illicit funds in handling
$378.4 billion for Mexican-currency-exchange houses from 2004 to 2007.
That's the largest violation of the Bank
Secrecy Act, an anti-money-laundering law, in U.S. history - a sum equal
to one-third of Mexico's current gross domestic product.
"Wachovia's blatant disregard for our
banking laws gave international cocaine cartels a virtual carte
blanche to finance their operations", says Jeffrey Sloman, the
Federal Prosecutor who handled the case.
Since 2006, more than 22,000 people have
been killed in drug-related battles that have raged mostly along the
2,000-mile (3,200-kilometer) border that Mexico shares with the U.S. In
the Mexican city of Ciudad Juarez, just across the border from El Paso,
Texas, 700 people had been murdered this year as of mid- June. Six
Juarez police officers were slaughtered by automatic weapons fire in a
midday ambush in April.
Rodolfo Torre, the leading candidate for governor in the Mexican
border state of Tamaulipas, was gunned down yesterday, less than a week
before elections in which violence related to drug trafficking was a
central issue.
45000 MEXICAN
TROOPS DEPLOYED AGAINST THE CARTELS
Mexican President Felipe Calderon vowed to crush the drug cartels
when he took office in December 2006, and he's since deployed 45,000
troops to fight the cartels.
They've had little success.
Among the dead are police, soldiers, journalists and ordinary citizens.
The United States has 'pledged' Mexico $1.1 billion in the past two
years to aid in the fight against narcotics cartels.
[EDITOR'S INSERT:
This is absurd. Under the standard double-mindedness, dialectical
non-ethic that characterizes the criminalist behavior of elements of the
US Government, law enforcement and the Drug Enforcement Administration
battle valiantly against the proliferation of Mexican drug gangs, which
now operate in every corner of the United States. Meanwhile, the drug
offensive was organized and orchestrated by CIA operatives in Latin
America in the 1970s and 1980s, aided by Israeli 'Black' intelligence
headed by David Kimche (who died of brain cancer on 8th March 2010) and
Michael Harari. Their involvement is proven by the Cutolo Affidavit
dated 11th March 1980.
The military officer (Cutolo) was subsequently murdered, along with 'Bo'
Baker and others because of their knowledge inter alia of this criminal
activity. The barrels of precursor chemicals found in the forests of
Colombia and elsewhere did not materialize from nowhere. The
'Anglo-Saxons' and their nefarious Israeli cutouts took over and
organized the disparate competing Latin American gangs, establishing a
self-perpetuating scourge run by peasant criminals: a perfect cut-out.
Incidentally, after David Kimche died, The Daily Telegraph boobed by
publishing a photograph in which he was shown (engaged in negotiations
with the Lebanese in 1972) but wrongly attributed. We have published a
recent issue of Arab-Asian Affairs (which title we bought unknowingly
from Kimche's brother, Jon Kimche, in 1975). Jon Kimche used to come to
our office, as he continued for a time as Editor (until he doubled his
price, whereupon we fired him). We are therefore familiar with the
facial characteristics of the Kimche brothers. Investigations by this
service revealed that ALL picture representations of David Kimche
published in The Jerusalem Post, Haaretz, The Daily Telegraph, The Times
and US newspapers have been FRAUDULENT all along.
They have all identified several individuals wrongly as David Kimche and
continue to do so after his death. Why? To protect ongoing and past,
highly incriminating and sensitive drug operations].
In May, President Barack Obama said he'd send 1,200 National Guard
troops, adding to the 17,400 agents on the U.S. side of the border to
help stem drug traffic and illegal immigration.
Behind the carnage in Mexico is an industry that supplies hundreds of
tons of cocaine, heroin, marijuana and methamphetamines to Americans.
The cartels have built a network of dealers in 231 U.S. cities, taking
in about $39 billion in sales annually, according to the Justice
Department.
ITS THE
CRIMINAL BANKS THAT SHOULD BE PROSECUTED AND MADE TO SUFFER
Twenty million people in the U.S. regularly use illegal drugs, spurring
street crime and wrecking families.
Narcotics cost the U.S. economy $215 billion
a year - enough to cover health care for 30.9 million Americans - in
overburdened courts, prisons and hospitals and lost productivity.
"It's the banks laundering money for the
cartels that finances the tragedy", says Martin Woods, Director of
Wachovia's anti-money-laundering unit in London from 2006 to 2009.
Woods says he quit the bank in disgust after
executives ignored his documentation that drug dealers were funneling
money through Wachovia's branch network.
"If you don't see the correlation
between the money laundering by banks and the 22,000 people killed
in Mexico, you're missing the point", Woods says.
WACHOVIA ONE
OF MANY U.S. AND EUROPEAN BANKS HANDLING DRUG MONEY
Wachovia is just one of the U.S. and European banks that have been used
for drug money laundering. For the past two decades, Latin American drug
traffickers have gone to U.S. banks to cleanse their dirty cash, says
Paul Campo, head of the U.S. Drug Enforcement Administration's financial
crimes unit.
Miami-based American Express Bank International paid fines in both 1994
and 2007 after admitting that it had failed to spot and report drug
dealers laundering money through its accounts. Drug traffickers used
accounts at Bank of America in Oklahoma City to buy three planes that
carried 10 tons of cocaine, according to Mexican court filings.
Federal agents caught people who work for Mexican cartels depositing
illicit funds in Bank of America accounts in Atlanta, Chicago and
Brownsville, Texas, from 2002 to 2009.
Mexican drug dealers used shell companies to
open accounts at London-based HSBC Holdings Plc, Europe's biggest bank
by assets, an investigation by the Mexican Finance Ministry found.
CRIMINAL
ENTERPRISE BANKS HIDE BEHIND RHETORIC AND CLIENT CONFIDENTIALITY
Those two banks weren't accused of wrongdoing. Bank of America
spokeswoman Shirley Norton and HSBC spokesman Roy Caple say laws bar
them from discussing specific clients. They say their banks strictly
follow the government rules.
"Bank of America takes its
anti-money-laundering responsibilities very seriously" Norton says.
[EDITOR: Translation: This is a
deliberately vacuous, meaningless and empty statement].
A Mexican judge on January 22 accused the
owners of six centros cambiarios, or money changers, in Culiacan
and Tijuana of laundering drug funds through their accounts at the
Mexican units of Banco Santander SA, Citigroup Inc. and HSBC, according
to court documents filed in the case.
The money changers are in jail while being tried. Citigroup, HSBC and
Santander, which is the largest Spanish bank by assets, weren't accused
of any wrongdoing.
The three banks say Mexican law bars them from commenting on the case,
adding that they each carefully enforce anti-money-laundering programs.
HSBC has stopped accepting dollar deposits in Mexico, and Citigroup no
longer allows non-customers to change dollars there. Citigroup detected
suspicious activity in the Tijuana accounts, reported it to regulators
and closed the accounts, spokesman Paulo Carreno says.
[EDITOR: Yeah, after the event and after
the temperature got too hot].
FOCUS IS ON
THE CARTELS - BUT THEY CAN'T OPERATE WITHOUT CRIMINAL BANKS
On June 15, the Mexican Finance Ministry announced it would set limits
for banks on cash deposits in dollars. Mexico's drug cartels have become
multinational criminal enterprises.
Some of the gangs have delved into other illegal activities such as
gunrunning, kidnapping and smuggling people across the border, as well
as into seemingly legitimate areas such as trucking, travel services and
air cargo transport, according to the us Justice Department's National
Drug Intelligence Center.
These criminal empires have no choice but to use the global banking
system to finance their businesses, Mexican Senator Felipe Gonzalez
says.
"With so much cash, the only way to move
this money is through the banks", says Gonzalez, who represents a
central Mexican state and chairs the senate public safety committee.
[EDITOR: In January 2009,
Sr. Maria Antonio Costa, head of the Vienna-based UNDOC, told the
Austrian journal Profil in an interview that the only liquidity in the
interbank sector during the second half of 2008 was drug money.
Actually, he meant from the discontinuity that took place on 10-12
September, after which the Editor received three gunshots on our
voicemail: see passim].
Gonzalez, a member of Calderon's National Action Party, carries a .38
revolver for protection.
"I know this won't stop the narcos when
they come through that door with machine guns". he says, pointing to
the entrance to his office. "But at least I'll take one with me".
NO BANK MORE
CLOSELY LINKED TO MEXICAN DRUG LAUNDERING THAN WACHOVIA
No bank has been more closely connected with Mexican money laundering
than Wachovia. Founded in 1879, Wachovia became the largest bank by
assets in the southeastern U.S. by 1900.
After the Great Depression, some savvy
people in North Carolina called the bank "Walk-Over-Ya" because it had
foreclosed on farms in the region.
By 2008, Wachovia was the sixth-largest American lender, and it faced
$26 billion in losses from subprime mortgage loans. That cost Wachovia
Chief Executive Officer Kennedy Thompson his job in June 2008.
Six months later, San Francisco-based Wells Fargo, which dates from
1852, bought Wachovia for $12.7 billion, creating the largest network of
bank branches in the U.S. Thompson, who now works for private-equity
firm Aquiline Capital Partners LLC in New York, declined to comment.
As Wachovia's balance sheet was bleeding, its legal woes were mounting.
In the three years leading up to Wachovia's agreement with the Justice
Department, grand juries served the bank with 6,700 subpoenas requesting
information.
WACHOVIA
REACTED LETHARGICALLY TO THIS GRAND JURY ONSLAUGHT
The bank didn't react quickly enough to the prosecutors' requests and
failed to hire enough investigators, the U.S. Treasury Department said
in March. After a 22-month investigation, the Justice Department on
March 12 charged Wachovia with violating the Bank Secrecy Act by failing
to run an effective anti-money-laundering program.
Five days later, Wells Fargo promised in a Miami federal courtroom to
revamp its detection systems. Wachovia's new owner paid $160 million in
fines and penalties, less than 2 percent of its $12.3 billion profit in
2009.
If Wells Fargo keeps its pledge, the U.S. government will, according to
the agreement, drop all charges against the bank in March 2011.
[EDITOR: WHAT A SCANDAL].
Wells Fargo regrets that some of Wachovia's former anti-money-laundering
efforts fell short, spokeswoman Mary Eshet says.
Wells Fargo has invested $42 million in the
past three years to improve its anti-money-laundering program and has
been working with regulators, she says.
'AFTER THE
HORSES HAVE BOLTED' WHINING
"We have substantially increased the
caliber and number of staff in our international investigations
group, and we also significantly upgraded the monitoring software",
Eshet says.
The agreement bars the bank from contesting
or contradicting the facts in its admission.
The bank declined to answer specific questions, including how much it
made by handling $378.4 billion - including $4 billion of cash-from
Mexican exchange companies.
[EDITOR: PROTECTED]
The 1970 Bank Secrecy Act requires banks to report all cash transactions
above $10,000 to regulators and to tell the Government about other
suspected money-laundering activity.
Big banks employ hundreds of investigators and spend millions of dollars
on software programs to scour accounts.
[EDITOR: GREAT. BUT HASN'T ADDRESSED THE BANKS' CRIMINALITY]
No big U.S. bank - Wells Fargo included - has ever been indicted for
violating the Bank Secrecy Act or any other Federal law.
Instead, the Justice Department settles
criminal charges by using deferred-prosecution agreements, in which a
bank pays a fine and promises do it again.
BANKS PROTECTED BY
FEARS THAT A BANK COLLAPSE WOULD IMPLODE THE SYSTEM
Large banks are protected from indictments by a variant of the
too-big-to-fail theory.
Indicting a big bank could trigger a mad dash by investors to dump
shares and cause panic in financial markets, says Jack Blum, a U.S.
Senate investigator for 14 years and a consultant to international banks
and brokerage firms on money laundering.
The theory is like a get-out-of-jail-free card for big banks, Blum says.
[EDITOR: Jack Blum is a highly respected investigator, a man of the
highest integrity and calibre].
"There's no capacity to regulate or
punish them because they're too big to be threatened with failure",
Blum says. "They seem to be willing to do anything that improves
their bottom line, until they're caught".
[EDITOR: ACCURATE, ACCURATE,
ACCURATE, ACCURATE]
Wachovia's run-in with Federal prosecutors
hasn't troubled investors. Wells Fargo's stock traded at $30.86 on March
24, up 1 percent in the week after the March 17 agreement was announced.
Moving money is central to the drug trade - from the cash that people
tape to their bodies as they cross the U.S.-Mexican border, to the
$100,000 wire transfers they send from Mexican exchange houses to big
U.S. banks.
BORDER FENCE
DOESN'T STOP ANYONE - A HUGE WALL IS NECESSARY
In Tijuana, 15 miles south of San Diego, Gustavo Rojas has lived for a
quarter of a century in a shack in the shadow of the 10-foot-high
(3-meter-high) steel border fence that separates the U.S. and Mexico
there.
He points to holes burrowed under the
barrier.
"They go across with drugs and come back
with cash," Rojas, 75, says.
"This fence doesn't stop anyone".
Drug money moves back and forth across the
border in an endless cycle. In the U.S., couriers take the cash from
drug sales to Mexico - as much as $29 billion a year, according to U.S.
Immigration and Customs Enforcement. That would be about 319 tons of
$100 bills. [EDITOR: NO. $45
BILLION]
They hide it in cars and trucks to smuggle into Mexico. There, cartels
pay people to deposit some of the cash into Mexican banks and branches
of international banks.
The narcos launder much of what's left
through money changers.
DRUG MONEY
LAUNDERED THROUGH STREET MONEY TRADERS
Anyone who has been to Mexico is familiar with these street-corner money
changers; Mexican regulators say there are at least 3,000 of them from
Tijuana to Cancun, usually displaying large signs advertising the day's
dollar-peso exchange rate.
Mexican banks are regulated by the National Banking and Securities
Commission, which has an anti-money-laundering unit; the money changers
are supposedly policed by Mexico's Tax Service Administration, which has
no such unit.
By law, the money changers have to demand identification from anyone
exchanging more than $500. They also have to report transactions higher
than $5,000 to regulators.
The cartels get around these requirements by employing legions of
individuals - including relatives, maids and gardeners - to convert
small amounts of dollars into pesos or to make deposits in local banks.
After that, cartels wire the money to a multinational bank.
SMALL MONEY
EXCHANGES ARE CALLED SMURFS
The people making the small money exchanges are known as Smurfs, after
the cartoon characters.
"They can use an army of people like
Smurfs and go through $1 million before lunchtime", says Jerry
Robinette, who oversees U.S. Immigration and Customs Enforcement
operations along the border in east Texas.
The U.S. Treasury has been warning banks
about big Mexican- currency-exchange firms laundering drug money since
1996. By 2004, many U.S. banks had closed their accounts with these
companies, which are known as casas de cambio.
Wachovia ignored warnings by regulators and police, per the
deferred-prosecution agreement.
"As early as 2004, Wachovia understood
the risk", the bank admitted in court. "Despite these warnings,
Wachovia remained in the business".
One customer that Wachovia took on in 2004
was Casa de Cambio Puebla SA, a Puebla, Mexico-based currency-exchange
company.
Pedro Alatorre, who ran a Puebla
branch in Mexico City, had created front companies for cartels,
according to a pending Mexican criminal case against him.
FEDERAL INDICTMENT
IN MIAMI
A Federal Grand Jury in Miami indicted Puebla, Alatorre and three other
executives in February 2008 for drug trafficking and money laundering.
In May 2008, the Justice Department sought extradition of the suspects,
saying they used shell firms to launder $720 million through U.S. banks.
Alatorre has been in a Mexican jail for 2 1/2 years. He denies any
wrongdoing, his lawyer Mauricio Moreno says. Alatorre has made no
court-filed responses in the U.S.
During the period in which Wachovia admitted to moving money out of
Mexico for Puebla, couriers carrying clear plastic bags stuffed with
cash went to the branch Alatorre operated at the Mexico City airport,
according to surveillance reports by Mexican police.
Alatorre opened accounts at HSBC on behalf of front companies, Mexican
investigators found.
Puebla executives used the stolen identities of 74 people to launder
money through Wachovia accounts, Mexican prosecutors say in court-filed
reports.
WACHOVIA NEVER
REPORTED ANY TRANSACTIONS AS SUSPICIOUS
"Wachovia handled all the transfers, and
they never reported any as suspicious", says Jose Luis Marmolejo,
former head of the Mexican Attorney General's financial crimes, now
in private practice.
In November 2005 and January 2006, Wachovia
transferred a total of $300,000 from Puebla to a Bank of America account
in Oklahoma City, according to information in the Alatorre cases in the
United States and Mexico.
Drug smugglers used the funds to buy the DC-9 through Oklahoma City
aircraft broker U.S. Aircraft Titles Inc., according to financial
records cited in the Mexican criminal case. U.S. Aircraft Titles
President Sue White declined to comment.
On April 5, 2006, a pilot flew the plane from St. Petersburg, Florida,
to Caracas to pick up the cocaine, according to the DEA. Five days
later, troops seized the plane in Ciudad del Carmen and burned the drugs
at a nearby army base.
WACHOVIA KNEW
PERFECTLY WELL WHAT WAS GOING ON
"I am sure Wachovia knew what was going
on", says jJose Marmolejo, who oversaw the criminal investigation
into Wachovia's customers.
"It went on too long and they made too much money not to have
known".
At Wachovia's anti-money-laundering unit in
London, Woods and his colleague Jim DeFazio, in Charlotte, say
they suspected that drug dealers were using the bank to move funds.
Woods, a former Scotland Yard investigator, spotted illegible signatures
and other suspicious markings on traveler's checks from Mexican exchange
companies, he said in a September 2008 letter to the U.K. Financial
Services Authority. He sent copies of the letter to the DEA and Treasury
Department in the United States.
Woods, 45, says his bosses instructed him to keep quiet and tried to
have him fired, according to his letter to the FSA. In one meeting, a
bank official insisted Woods shouldn't have filed suspicious activity
reports to the Government, as both US and UK laws require.
LONDON WACHOVIA
BOSSES TRIES TO SILENCE WHISTLEBLOWER WHO THEN LEFT BANK
"I was shocked by the content and
outcome of the meeting, genuinely traumatized", Woods wrote.
In the U.S., DeFazio, a Federal Bureau of
Investigation agent for 21 years, says he told bank executives in 2005
that the DEA was probing the transfers through Wachovia to buy the
planes.
Bank executives spurned recommendations to close suspicious accounts,
DeFazio, 63, says.
"I think they looked at the money and
said, 'The hell with it. We're going to bring it in, and look at all
the money we'll make'", DeFazio says.
"I didn't want anything from them", he says. "I just wanted to get
out".
Woods, who resigned from Wachovia in May
2009, now advises banks on how to combat money laundering. He declined
to discuss details of Wachovia's actions.
U.S. Comptroller of the Currency John Dugan told Woods in a March
19 2010 letter that his efforts had helped the United States build its
case against Wachovia.
He wrote:
"You demonstrated great courage and
integrity by speaking up when you saw problems".
It was the Puebla investigation that led
U.S. authorities to the broader probe of Wachovia. On May 16, 2007, DEA
agents conducted a raid of Wachovia's international banking offices in
Miami. They had a court order to seize Puebla's accounts.
U.S. prosecutors and investigators then scrutinized the bank's dealings
with Mexican-currency-exchange firms. That led to the March
deferred-prosecution agreement.
With Puebla's Wachovia accounts seized, Alatorre and his partners
shifted their laundering scheme to HSBC, according to financial
documents cited in the Mexican criminal case against Alatorre.
In the three weeks after the DEA raided Wachovia, two of Alatorre's
front companies, Grupo ETPB SA and Grupo Rahero SC, made 12 cash
deposits totaling $1 million at an HSBC Mexican branch, Mexican
investigators found.
DRUG MONEY
NOW LAUNDERED THROUGH HSBC TO BUY ANOTHER PLANE
The funds financed a Beechcraft King Air 200 plane that police seized on
December 29, 2007, in Cuernavaca, 50 miles south of Mexico City,
according to information in the case against Alatorre.
For years, Federal authorities watched as the wife and daughter of
Oscar Oropeza, a drug smuggler working for the Matamoros-based Gulf
Cartel, deposited stacks of cash at a Bank of America branch on Boca
Chica Boulevard in Brownsville, Texas, less than 3 miles from the
border.
Investigator Robinette sits in his pickup truck across the street
from that branch. It's a one-story, tan stucco building next to a
Kentucky Fried Chicken outlet.
Robinette discusses the Oropeza case with
Tom Salazar, an agent who investigated the family.
"Everybody in there knew who they were -
the tellers, everyone", Salazar says.
"The bank never came to us, though".
[EDITOR: COURSE NOT. IT'S A CIA
CRIMINAL ENTERPRISE]
MICRO-MONEY LAUNDERING
TECHNIQUE
The Oropeza case gives a new, literal meaning to the term money
laundering. Oropeza's wife, Tina Marie, and daughter Paulina Marie,
deposited stashes of $20 bills several times a day into Bank of America
accounts, Salazar says.
Bank employees knew the Oropezas by smelling
their money.
"I asked the tellers what they were
talking about, and they said the money had this sweet smell like
Bounce, those sheets you throw into the dryer", Salazar says. "They
told me that when they opened the vault, the smell of Bounce just
poured out".
Oropeza, 48, was arrested 820 miles from
Brownsville, Texas.
On May 31, 2007, police in Saraland,
Alabama, stopped him on a traffic violation. Checking his record, they
learned of the investigation in Texas. They searched the van and
discovered 84 kilograms (185 pounds) of cocaine hidden under a false
floor. That allowed Federal agents to freeze Oropeza's bank accounts and
search his marble-floored home in Brownsville, Robinette says.
Inside, investigators found a supply of Bounce alongside the clothes
dryer.
All three Oropezas pleaded guilty in U.S. District Court in Brownsville,
TX, to drug and money-laundering charges in March and April 2008. Oscar
Oropeza was sentenced to 15 years in prison; his wife was ordered to
serve 10 months and his daughter got 6 months.
Bank of America's Norton says:
"We not only fulfilled our regulatory
obligation, but we proactively worked with law enforcement on these
matters".
[EDITOR: NEFARIOUS HUMBUG]
Prosecutors have tried to halt money
laundering at American Express Bank International twice.
In 1994, the bank, then a subsidiary of New
York-based American Express Co., pledged not to allow money laundering
again after two employees were convicted in a criminal case involving
drug trafficker Juan Garcia Abrego.
In 1994, the bank paid $14 million to settle. Five years later, drug
money again flowed through American Express Bank. Between 1999 and 2004,
the bank failed to stop clients from laundering $55 million of narcotics
funds, the bank admitted in a deferred-prosecution accord in August
2007.
It paid $65 million to the United States and promised not to break the
law again. The government dismissed the criminal charge a year later.
American Express sold the bank to the
London-based Standard Chartered PLC in February 2008 for $823
million.
WESTERN UNION
TURNED A BLIND EYE TO DRUG-MONEY LAUNDERING
Banks aren't the only financial institutions that have turned a blind
eye to drug cartels in moving illicit funds. Western Union Co., the
world's largest money transfer firm, agreed to pay $94 million in
February 2010 to settle civil and criminal investigations by the Arizona
Attorney General's office.
Undercover state police posing as drug dealers bribed Western Union
employees to illegally transfer money, says Cameron Holmes, an assistant
Attorney General.
"Their allegiance was to the smugglers",
Holmes says. "What they thought about during work was 'How may I
please my highest- spending customers the most?'"
Workers in more than 20 Western Union
offices allowed the customers to use multiple names, pass fictitious
identifications and smudge their fingerprints on documents, court
records say.
"In all the time we did undercover
operations, we never once had a bribe turned down", says Holmes,
citing court affidavits.
Western Union has made significant
improvements, it complies with anti-money-laundering laws and works
closely with regulators and police, spokesman Tom Fitzgerald
says.
For four years, Mexican authorities have been fighting a losing battle
against the cartels. The police are often two steps behind the
criminals. Near the southeastern corner of Texas, in Matamoros, more
than 50 combat troops surround a police station.
US officers take two suspected drug traffickers inside for questioning.
Nearby, two young men wearing white T-shirts and baggy pants watch and
whisper into radios.
These are los halcones (the falcons),
whose job is to let the cartel bosses know what the police are doing.
BILLIONS MOVED
ACROSS BORDERS ROUTINELY - THERE IS NO CHANGE
While the police are outmaneuvered and outgunned, ordinary Mexicans live
in fear. Rojas, the man who lives in the Tijuana slum near the border
fence, recalls cowering in his home as smugglers shot it out with the
police.
"The only way to survive is to stay out
of the way and hope the violence, the bullets, don't come for you,"
Rojas says.
To make their criminal enterprises work, the
drug cartels of Mexico need to move billions of dollars across borders.
That's how they finance the purchase of drugs, planes, weapons and safe
houses, Senator Gonzalez says.
"They are multinational businesses,
after all", says Gonzalez, as he slowly loads his revolver at his
desk in his Mexico City office. "And they cannot work without a
bank."
