Operation Utah Powder

Money Launderers Take a "Powder"
International Investigation Targets Colombian Drug Traffickers' Ill-Gotten Gains

03/24/04

It started out as a local loan fraud investigation of one man.

But by the time it was over, it had turned into "Operation Utah Powder," a huge international money laundering case involving an impressive array of characters—Colombian drug traffickers, Colombian terrorist groups, and over $5 million in proceeds laundered through American banks. To date, four Utah residents have pled guilty to money laundering charges, thanks to the partnership efforts of international and domestic law enforcement, with special thanks to the Salt Lake City Police Department's Financial Crimes Unit.

Where was the dirty money laundered? In this case, in banks and credit unions in Utah, Nevada, California, Texas, Ohio, New York, Georgia, Florida, and Columbia, along with Panama, Cayman Islands, Mexico, Italy, Spain, the United Kingdom, and Latvia. With the cooperation of several of the defendants, the FBI's investigation is continuing in other jurisdictions, nationally and internationally.

How did the scheme work? The foursome traveled to cities outside of Utah to pick up cash-stuffed suitcases at pre-arranged meetings with anonymous couriers. They then moved the money to Utah and other places using a variety of techniques to launder it--and that's when things got complicated.

Money laundering 101: Here—in a nutshell—is what they did:

1) They put the "dirty" cash into the United States' legitimate financial system (e.g., opening accounts at different banks with deposits of less than $10,000 each so as to not trigger federal bank reporting requirements);

2) They layered the money through a bunch of transactions that hid where it came from, then gave it back to the drug traffickers (e.g., falsifying business invoices and purchasing cashier's checks and money orders, then wiring funds to a bunch of different banks and credit unions before it was ultimately sent to the accounts of the traffickers located in places like Miami and Panama).

And here's what the drug traffickers did: They put the "clean" funds back into their pockets (e.g., using the Colombian Black Market Peso Exchange, an elaborate mechanism that enables traffickers to repatriate the proceeds from their drug sales in the U.S.).

And what did our money launderers in this case get for their trouble? A percentage of the profits—a mighty hefty sum considering they helped launder more than $3.7 million.

Possible terrorism connection? During the investigation, the FBI also learned that for each kilo of cocaine exported from Colombia and sold in the U.S., a fee was paid to the Revolutionary Armed Forces of Colombia (FARC), the military wing of the Colombian Communist Party, which the U.S. has designated a terrorist organization. Protection money for the cocaine shipments was also provided to the United Self-Defense Forces of Colombia (AUC), a right wing terrorist organization.

Bottom line: Once again, international law enforcement partnerships shut down international criminal operations.