- The Washington Times - Thursday, January 17, 2002

U.S. Customs Service agents yesterday derailed an international money-laundering operation that serviced Colombian drug traffickers, arresting 37 persons and seizing more than $8 million in cash.
The undercover investigation, known as Operation Wire Cutter, began in September 1999 and involved agents from the Customs Service, the Drug Enforcement Administration and Colombian law enforcement officials.
Twenty-nine persons were taken into custody during raids by U.S. agents in New York, Chicago, Miami and San Juan, Puerto Rico.
Colombian authorities arrested eight suspected money brokers in Bogota, believed to have used a sophisticated scheme called the "black market peso exchange" to launder money for Colombian drug organizations.
During the arrests, agents also seized large quantities of cocaine, marijuana and heroin, Customs Service officials said.
"Operation Wire Cutter was unprecedented in that it combined the best investigative techniques of U.S. and Colombian law enforcement to bring down major players in the world of drug money laundering," said Customs Commissioner Robert Bonner.
The officials said the black market peso exchange, which involves purchases of U.S. products notably home appliances, consumer electronics and cigarettes for export to Colombia, is the biggest, most efficient money-laundering system in the Western Hemisphere.
They said Colombian peso brokers, who act as middlemen, give Colombian importers IOUs in exchange for pesos.
The pesos are then used to buy U.S. dollars from drug organizations, providing the cartels with clean, usable currency.
Then, the brokers use the dollars to buy U.S. goods and smuggle them into Colombia on behalf of the importers, who avoid high government tariffs and taxes on foreign currency exchanges.
Customs Service officials described the eight arrested money brokers as key players in the dismantled network.
They said "each of these money brokers headed distinct organizations that provided money-laundering services to the cartels on a contract basis."
Each of the suspected brokers has been charged with federal money-laundering violations in the Southern District of New York.

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