Mexican Laundry Mess

CobraBoy (
Thu, 11 Jun 1998 20:02:09 -0700

Mexican Laundry Mess: Small Fry Busted, Bigwigs at large

May 18 was a "a very bad day for drug dealers in this
hemisphere," boasted US Attorney General Janet Reno,
announcing an unprecedented sting on the cream of the Mexican
banking establishment. That day, a Los Angeles federal grand
jury brought charges against three top Mexican banks and 26
bankers for laundering Mexican and Colombian cartel profits.

But it was not an entirely bad day for Raul Salinas, who moved
at least $140 million in alleged dope money through his US
Citibank accounts to Switzerland in the early '90s. Though he
remains in a Mexican jail on a homicide count, Salinas was
abruptly acquitted of narco-laundering charges by a top
court only hours after Reno's announcement galvanized the
American media. His acquittal earned only a brief Reuters

"Operation Casablanca," carried out by the US Customs Service
behind the back of the Mexican government for three years,
resulted in charges against Bancomer and Banca Serfin,
Mexico's second- and third-largest banks, as well as
Mexican subsidiary, Banca Confia. A score of Mexican bank
officers, lured to the US for bogus conferences or to
attend the
opening of a Nevada casino, were ignominiously busted instead.
Money forfeitures may near $100 million.

"Operation Casablanca built a road map that tracked the
structure of the international drug cartels from the
kingpins to
the couriers and the bankers in between," claimed Reno. It
involved Customs agents introducing money-collectors of the
Juarez and Cali drug cartels to bankers at branches near
the US
border. Millions of dollars in drug money was washed between
1995 and last May, when two Juarez "kingpins"--Jose Alvarez
Tostado and Victor Alcala Navarro--were charged. No
Colombians (who sent the dope to US streets, and repeatedly
collected their net proceeds from it) were busted.

The case was remarkable for its secrecy from NAFTA partner
and "Drug War ally" Mexico. Reno and Treasury Secretary
Robert Rubin only alerted their top-level Mexican counterparts
after the indictments were handed down and the arrests made.

The subsequent hasty voiding of Salinas' money-washing charges
underlined Casablanca's failure to follow the money trail
northward through the financial arteries of NAFTA. Citibank,
which acquired control of Confia on May 11, has long been at
the center of Mexican narco-finance scandals. During
ex-President Carlos Salinas' 1988-94 term, Citibank executives
helped Raul Salinas, Carlos' brother, move fortunes in dubious
money through their New York City headquarters to secret
Swiss accounts (see HighWitness News - Citibank and Your
Drug War Dollars, Feb. '97). Citibank, which says it's
cooperating with Justice Department probes into that scandal,
now no longer faces the prospect of having to explain its
money-moving favors for Raul in Mexican court.

Chase Manhattan is also linked to one of the charged banks. In
1996, US and Mexican cops traced $15 million in Chase
accounts, controlled by accused Tijuana cartel bagman
Rigoberto Gaxiola Medina, to Banca Serfin. Gaxiola Medina is
at large.

Also named in the 1996 case was Carlos Cabal Peniche, also now
at large, whose Banco Cremi was used to prelaunder Raul
Salinas' money into his Citibank accounts. Another of Cabal
Peniche's banks, Banco Union, was seized by Mexican
authorities, who charged that Cabal had set up a secret
fund for the Salinas brothers with narco-dollars derived from
cocaine transshipments through his banana interests. Carlos
Salinas, living now in Ireland, is a close friend of
figures Adria Sada Gonzalez, chief of Banca Serfin, and
Bancomer chief Eugenio Garza Laguerra.

With President Bill Clinton under fire for the
"certification" of
Mexico as a loyal Drug War ally, from both Republicans and
Democrats, an impressive show like this was worth alienating
Mexico's political and financial elite. Tracing the network's
stateside connections is less of a priority for the

Indeed, within a week after Operation Casablanca made
screaming headlines, White House Drug Czar Gen. Barry
McCaffrey quietly apologized to the Mexican government for
the way Customs had kept them (and McCaffrey) out of the loop
during this three-year sting operation. Also frozen out of the
loop--by veteran narcotics agents suspicious of how the
Administration has repeatedly squelched investigations
aimed at
politically connected financial bigwigs in the US and
abroad--was Secretary of State Madeleine Albright, who
personally apologized for Casablanca to Mexican Foreign
Secretary Rosario Green at a private meeting in Venezuela on
June 3.

The Mexican Attorney General's office will be prosecuting the
Customs Department's courageous Mexican informants on
criminal charges of entrapment, usurpation of authority and
laundering drug money. Customs acknowledges that their
undercover agents carried out millions of dollars' worth of
laundering operations in the course of the sting, often using
accounts at Bank of America and other US banks. The money
which returned to Colombian dope producers was routinely
reinvested in bigger loads to be sold on American streets, so
more money could ultimately be forfeited by the US

- Bill Weinberg, HT Web News
Crew, filed 6/8/98


A computer lets you make more mistakes faster than any invention in human history with the possible exceptions of handguns and tequila . Mitch Ratliffe, _Technology Review_ April, 1992

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