- The Washington Times - Tuesday, June 14, 2005

Drug agents have arrested 36 persons in the United States, Colombia and Puerto Rico in a massive undercover investigation that targeted Colombian-based money brokers suspected of funneling $12 million in illicit drug profits through the Colombian Black Market Peso Exchange.

The 27-month investigation, known as Operation Mallorca, also resulted in the seizure of $7.2 million in cash, 947 kilograms of cocaine, 7 kilograms of heroin and more than 21,000 pounds of marijuana, said U.S. Drug Enforcement Administration (DEA) chief Karen P. Tandy yesterday. A kilogram is 2.2 pounds.

“In Operation Mallorca, we followed the money around the globe and into the hands of major Colombian drug traffickers,” said Mrs. Tandy. “We’ve shown the Black Market Peso Exchange for what it is — the largest known drug-money laundering mechanism in the Western Hemisphere.”

Suspected Colombian money brokers Gabriel Martinez, Farid Chain and Edgar De Castro were the probe’s main targets, DEA officials said, noting that Mr. Chain was arrested with associates in Barranquilla, Colombia. Mr. Martinez and Mr. De Castro have been declared fugitives, although law enforcement authorities in Colombia believe Mr. Martinez was recently killed.

Others were taken into custody in New York, Florida, Puerto Rico and California. Indictments also were returned against four businesses — Fabrica Colchitex in Barranquilla, Colombia, and Mavex Corp., Daybreak Corp. and Inversiones Nolett, all in Miami.

DEA officials said the Colombian brokers were capable of handling $200 million in illicit profits annually, dealing with cocaine shipments of between 2,000 and 3,000 kilograms a month.

The Black Market Peso Exchange is a system where drug traffickers sell U.S. drug proceeds to brokers for pesos. The brokers then sell the drug proceeds to Colombian importers, who purchase goods in the United States and elsewhere. By purchasing the U.S. dollars on the Black Market Exchange and not through Colombia’s regulated exchange system, the importers avoid Colombian taxes and tariffs, gaining significant profit and a competitive edge over those who import legally.

“DEA showed today that traffickers can move their money around the world, but we will track it down,” Mrs. Tandy said, noting that DEA denied drug traffickers over $500 million in profits last year — a 40 percent increase over the previous year.

DEA officials said the undercover investigation documented 68 transfers of drug money totaling $12 million directed by Mr. Martinez, Mr. Chain and Mr. De Castro in Puerto Rico, New York and Florida. Monies were laundered through 300 wire transfers to 200 bank accounts, involving 170 separate account holders in 16 U.S. cities and 13 foreign countries, they said.

The first prosecutions in the lengthy probe began in June 2004 when a federal grand jury in Puerto Rico indicted money broker Carlos Medina and six associates, all of whom have been arrested. In April, a federal grand jury in Puerto Rico indicted Mr. Martinez, Mr. De Castro and 16 associates for money laundering and drug trafficking.

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