- The Washington Times - Sunday, December 8, 2002

Federal agents have smashed an $80 million international money laundering scheme involving the diversion of illicit profits from Colombian drug dealers through life insurance companies in the United States, the isle of Man and other offshore locations.
A two-year undercover investigation, known as "Operation Capstone" and led by the U.S. Customs Service, netted nearly $30 million in cash, life insurance policies and bonds, and nine arrests in Colombia.
Panamanian authorities, who took part in the multinational probe, also froze $1.2 million in accounts based on evidence uncovered in Colombia and from federal prosecutors in Florida Friday. The Florida prosecutors announced grand jury indictments against five Colombian nationals on money laundering violations.
The probe continues, and officials expect additional arrests and seizures.
"This investigation reveals that there are no limits to which drug traffickers and their money laundering accomplices will go to hide and clean their illegal drug profits," said U.S. Customs Commissioner Robert C. Bonner. "Here, they used life insurance to invest and cleanse their dirty money.
"The life insurance industry must be ever-vigilant in preventing the use of its industry to launder the profits of criminal syndicates," he said.
Customs spokesman Jim Michie described the money-laundering scheme as a sophisticated plan in which Colombian drug cartels purchased life insurance policies through brokers in the United States, the Isle of Man and other locations, listing their associates as the beneficiaries.
The policies were funded by tens of millions of dollars in drug profits sent in checks and wire transfers to the insurance companies by third parties around the globe, he said. Once a policy was created, a policyholder could fund it beyond its face value and make early withdrawals.
Mr. Michie said investigators found that the cartels routinely liquidated their drug-financed life insurance policies after short periods of time, despite penalties for the early withdrawals. He said cartel beneficiaries would receive a check or wire transfer from the insurance company that, on its surface, appeared to be legitimate investment proceeds. The cartels could then use these "clean" funds virtually unquestioned, he said.
Authorities in the United States, the Isle of Man, Colombia and other jurisdictions linked more than 250 insurance policies to the scam.
"This case exemplifies where our anti-drug money-laundering efforts should be directed: at financial systems moving millions of dollars through the world's economy and most importantly, targeting financial professionals whose loss to the traffickers will be much greater than any loss of product," said Jimmy Gurule, the Treasury Department's undersecretary for enforcement.
"The money laundered through insurance companies in this case constituted proceeds from illegal drug operations but could have just as easily been money to finance terrorism," he said.
Operation Capstone began in October 2000, stemming from a prior long-term probe into the drug and money-laundering activities of the Colombian cartels. During that investigation, Customs agents in Miami discovered that cartels were laundering money through life insurance purchases in the United States, Europe and other offshore jurisdictions.
Mr. Michie said the probe focused on independent insurance brokers who had little or no training in anti-money-laundering issues operating internationally. He said the brokers often maintained pre-signed payment instructions for early withdrawals, allowing customers to withdraw funds with a telephone call.
He also said there was limited oversight by the insurance companies and that they had little reliable information about the customers who purchased large cash-value policies.
The five men indicted in Miami were Arturo Delgado, Jaime Eduardo Rey Albornoz, Alexander Murillo, Rodrigo Jose Murillo and Esperanza Romero. They are accused of laundering $2 million in drug proceeds through several insurance companies.

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