Pubdate: Thu, 22 Nov 2001 Source: Chicago Tribune (IL) Copyright: 2001 Chicago Tribune Company Contact: http://www.chicagotribune.com/ Details: http://www.mapinc.org/media/82 Author: Patrice M. Jones MONEY LAUNDERING UNDER ATTACK Latin Nations Put New Emphasis On Fighting Operations RIO DE JANEIRO -- When Brazil and Bolivia announced recently that they had cracked a $260 million money laundering operation, the investigation was hailed as proof of a new commitment to stop an often-ignored crime that has flourished in a region where drug lords and corrupt politicians still hold considerable sway. Watchdog groups say that while money laundering remains a relatively unchallenged practice in Latin America, a wave of high-profile investigations like the Brazil-Bolivia cooperation, new regulations and tighter enforcement indicate that recent international scrutiny is forcing governments to take money laundering more seriously. Contraband Capital Even Paraguay, called South America's contraband capital because of its brisk trade in everything from black market compact discs to arms and drugs, is now pursuing violators with a new money laundering law. After joining the international Financial Action Task Force in 2000, Brazil, Argentina and Mexico have stepped up new probes, and traditional Caribbean havens such as the Cayman Islands and the Bahamas are enforcing a raft of new regulations. "It is money laundering that facilitates drug trafficking and any illegal activity, so I suspect this is why the focus has shifted particularly in Latin America to include money laundering in the fight against drug trafficking and terrorism," Donnie Marshall, a former head of the U.S. Drug Enforcement Administration, said recently. Multibillion Dollar Business There are few reliable regional statistics, but Brazilian officials estimate that money laundering from drug trafficking in Brazil alone reaches about $15 billion a year. To discuss the region's progress and the deadly money-drug-terrorism connection, Paraguay is to host a regional meeting of defense leaders, finance experts and other officials from five Latin American countries and the United States in December. While investigations and meetings are laudable, criminal convictions in such cases traditionally have been scarce in Latin America, critics say. "The big problem that impedes progress against money laundering in Latin America is corruption--there is tons of it," said Charles Intriago, a former Florida federal prosecutor who publishes a Miami- based newsletter called Money Laundering Alert. "We have totally corrupt public officials or quasi public officials selling out to drug traffickers and the terrorists," he said. One of the most embarrassing cases, according to regional investigators, probably was that of Vladimiro Montesinos, Peru's former intelligence chief. Montesinos fled Peru last year as investigators were beginning to uncover a trail of clandestine accounts totaling more than $100 million that littered the financial systems of several countries, including the United States. Awaiting trial in Peru on allegations of crimes ranging from embezzlement and money laundering to drug trafficking and murder, Montesinos was tracked down through an emissary he allegedly sent to Miami to withdraw $38 million from U.S. banks, investigators say. Other investigations--from Brazil's convicted ex-president of the Sao Paulo Labor Court, Judge Nicolau dos Santos Neto, who had his riches tucked away in Miami and Switzerland, to Brazil's top drug dealer who had ties with Colombia's guerrillas--reveal that many of the region's most powerful figures have been well-acquainted with money laundering. But government officials and finance experts say there has been significant progress, arguing that the current barrage of investigations is proof that things are changing. "Today, we are able to know things that would have been impossible before because we are no longer blocked by bank secrecy laws and now governments are working together and exchanging information," said Adrienne Senna, president of Brazil's Council of Financial Activity Control, an agency set up to fight money laundering. In the past year, Senna's agency has been juggling several investigations, including dos Santos', in relation to allegations of money siphoned from a botched Sao Paulo construction project. A Swiss Connection Dos Santos' assets were frozen after investigators found he had hidden $4 million in a Swiss account and also owned a Miami apartment valued at $1 million, Senna said. Two weeks ago, the most recent sting was announced. Its target was a money laundering operation that funneled cash from Brazil to Bolivia to the United States to Lebanon via several operatives, including a travel agent identified by investigators as a courier for Luiz Fernando da Costa, a Brazilian drug lord with connections to the Revolutionary Armed Forces of Colombia. He is suspected of trading cash and guns for cocaine with leftist guerrillas. He was arrested in Colombia earlier this year. - --- MAP posted-by: Beth