Finance:Operation Greenback
Operation Greenback was a Miami, Florida-based, multi-agency U.S. government task force targeting money laundering connected to drug trafficking.[1]
Formation and composition
The operation was established in response to the explosive growth of money laundering in South Florida following the increase in drug trafficking in the region.[1][2] A 1979 cash-flow study by the Federal Reserve Bank found that Florida had a $5.5 billion cash surplus at a time when the rest of the country had a cash deficit.[1][2]
The interagency task force was formed in late 1979 at the suggestion of the Treasury Department[2] and launched investigations in 1980.[3] The task force was the first interagency group set up to combat money laundering.[4]
It was composed of investigators from the Justice Department (Narcotic and Dangerous Drug Section) and the Treasury Department (Internal Revenue Service (IRS) and U.S. Customs Service).[1][2] The task force cooperated with the U.S. Attorney's Office for the Southern District of Florida and the Drug Enforcement Administration (DEA).[3]
Investigations and prosecutions
Investigators reviewed currency transaction reports (CTRs) and currency and monetary instrument reports (CMIRs)[3] to identify violations of the Bank Secrecy Act.[1][2] The operation resulted in a large number of federal seizures of cash bound for Colombian drug cartels.[2] For example, in November 1980, agents seized $1.6 million in suspected drug profits and two aircraft after intercepting alleged traffickers at the Opa-Locka Airport.[5] In October 1982, investigations raided a cocaine production laboratory in Miami, recovering $3 million and 40 pounds of cocaine, and arresting 11 people.[6] In 1983, the operation expanded to Puerto Rico.[7]
Major figures prosecuted as a result of Operation Greenback included Hernan Botero Moreno, Isaac Kattan Kassin, and Alberto Barrera Duran.[1] Kattan, a naturalized Colombian citizen based in Los Angeles , was an associate of drug barons Miguel Ángel Félix Gallardo and Juan Matta-Ballesteros.[8] Kattan was arrested in 1981 with 20 kilograms of cocaine in his car.[9] Searches of Kattan's home and four hotel rooms uncovered $40 million in cash.[10] Kattan was convicted and sentenced to 30 years in prison.[8] Barrera (nicknamed "Papa Smurf") pioneered the technique of smurfing, evading detection of suspicious deposits of cash by buying money orders and cashier's checks in amounts below $10,000, thus avoiding CTR reporting requirements.[11] The scheme was dismantled in 1984 after Barrera and 13 others were charged with conspiracy to defraud the United States.[12] About half of those charged, including Barrera, fled to Colombia, while others were arrested and sentenced to U.S. prison terms.[12]
The Great American Bank of Dade County was also indicted in 1982 as a result of the investigation.[3] The bank, which had laundered $60 million for Kattan in 1981 alone,[13] entered a guilty plea in 1984 in connection for laundering a total of $94 million.[14] The operation was generally successful at leading to prosecutions,[1][3] and fragmented the drug trade.[2] By the end of October 1982, the operation led to 125 arrests.[6] The operation also demonstrated a number of gaps in the law, which led to the enactment of the Money Laundering Control Act in 1986,[3] which (among other things) made smurfing a specific federal crime.[11]
References
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 "Operation Greenback" in Ron Chepesiuk, The War on Drugs: An International Encyclopedia (ABC-CLIO, 1999), p. 173.
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Interview: Mike McDonald, Drug Wars, Frontline, PBS.
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 Robert E. Grosse, Drugs and Money: Laundering Latin America's Cocaine Dollars (Praeger, 2001), p. 57.
- ↑ Peter Andreas & Ethan Nadelmann, Policing the Globe: Criminalization and Crime Control in International Relations (Oxford University Press, 2006), p. 135.
- ↑ Agents seize $1.6 million in suspected drug profits, United Press International (November 24, 1980).
- ↑ 6.0 6.1 Howard Kurtz, Cocaine-Production Laboratory Seized by U.S. Agents in Miami, Washington Post (October 23, 1982).
- ↑ Jesus Davila, Federal agents press investigation of money-laundering scam, United Press International (June 8, 1985).
- ↑ 8.0 8.1 Julie Marie Bunck & Michael Ross Fowler, Bribes, Bullets, and Intimidation: Drug Trafficking and the Law in Central America (Pennsylvania State University Press, 2012), p. 276.
- ↑ Jo Thomas, Suspect Held on $10 Million Bond in a Crackdown on Drugs in Miami, New York Times (February 28, 1981).
- ↑ Cheryl Hall, Meet the Dallas attorney who wrote the book on money laundering, Dallas Morning News (August 10, 2013).
- ↑ 11.0 11.1 Robert E. Grosse, Drugs and Money: Laundering Latin America's Cocaine Dollars (Praeger, 2001), pp. 72-73.
- ↑ 12.0 12.1 U.S. Arrests 6 Suspects in Florida in Nationwide Money Laundering, New York Times (June 5, 1984).
- ↑ Gugliotta & Leen (1989), p. 68.
- ↑ Bank pleads guilty in $94 million money laundering scheme, United Press International (April 17, 1984).
Further reading
- Gugliotta, Guy; Leen, Jeff (1989). Kings of Cocaine: Inside the Medellín Cartel - An Astonishing True Story of Murder, Money and International Corruption. New York: Simon and Schuster. ISBN 978-0-6716-4957-9. https://books.google.com/books?id=Y3dGino_7DoC.
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