Chapter Seventeen

 

THE OLD THREAT

 

 

 

 

"If you fight the Mafia alone, you will lose."

 

Assassinated anti-Mafia crusader fighter Giovanni Falcone

 

 

 

 

 

 

The Yakuza, Japan's equivalent of the Italian Mafia, is said to consist of at least 165,000 members and has an annual turnover that is approaching $70 billion.

 

A centuries-old tradition made up of thousands of smaller warrior-clans whose members identify themselves with multi-colored tattoos, one of their more effective tactics has been company extortion. They approach publicly held corporations and threaten that, unless the company comes up with protection money, they'll disrupt the shareholders' next annual general meeting. This type of harassment had become so widespread that a few years ago 2000 Japanese corporations conspired among themselves to nullify the menace by holding their AGMs on the same day and at the same time.

 

Like other groups around the world, they also deal drugs. Unlike other groups around the world, they cornered the "ice" market in Hawaii, crystal methamphetamine is a staple of drug users in the islands, where cultural make their dealing easy. At least 50 major properties in Hawaii are said to be owned by Japanese criminals.

 

Having established their own battleground, the FBI scored a big win there in 1992 when they lured Mitsuo Yoshimura out of Tokyo and into a Honolulu resort hotel. He thought he was there to finalize a $5 million "ice" deal. Arrested on US soil, the 43 year old boss of the Kyokushin-kai faction became the first, and to date only, Yakuza leader to be convicted in the United States. But then according to a former Yakuza member who testified before a Senate investigations panel, Hawaii is not their only American interest. Hundreds of millions of dollars of Yakuza money has been poured into hotels and golf courses around the US. Many of the private Japanese gambling clubs that dot midtown Manhattan are also believed to be backed by Yakuza groups.

 

In the beginning, they relied almost entirely on banks to launder their money. But in the early 1970s, the Yakuza discovered stockbroking. With the help of Malaysian Chinese gangs, they opened brokerages in Malaysia and Singapore. As their business grew, they moved quickly into Hong Kong, Australia, New Zealand, Indonesia and the Philippines. It is alleged that they've now opened shop in the United States. Cash is funneled in one end, shares in legitimate companies that pay legitimate dividends come out the other. When one Yakuza stock market ring was shut down by the authorities in Malaysia, without charges ever being lodged against anyone, the gang showed up in tact in London.

 

They have also been known to wash hundreds of millions of dollars through Tokyo real estate, buying and selling the same buildings to themselves. They artificially run up prices, then back loans on those buildings with US Treasury bonds bought in Hong Kong.

 

Occasionally, they display real flair and venture into something new. In mid-1985, having generated enormous amounts of cash through their drug dealing networks, one Yakuza syndicate turned its attention to the thriving trade in French designer luxury goods.

 

The first hurdle was getting their cash to Paris. Some of it was wired in, using Asian banks that routed it via Luxembourg, Switzerland and the Channel Islands. The rest was smuggled in, using well-dressed Japanese businessmen as couriers, unlikely suspects to have their attaché cases searched and seized by French Customs.

 

Next, ring leaders rented an apartment near the Madeleine, in central Paris, took out classified ads in Asian-language newspapers and recruited some 300 Chinese, Vietnamese and Japanese "customers." Every morning, each customer reported to the apartment, was given a bankroll of 500 franc notes and directed to shops --- primarily Vuitton and Hermes but also Chanel and Lancel --- where they bought handbags and scarves by the dozen. Every afternoon, the purchases were deposited at the flat and packed for shipment. Having successfully bribed a French Customs official, the goods were exported with forged documents back to Japan where they were wholesaled by a Yakuza shell company.

 

It wasn't until the operation had been in business for six years that anyone became even slightly suspicious of it. And then, it was down to employees at Vuitton to wonder about the increasing number of shabbily dressed Asian clients all of whom paid for expensive purchases with brand-new, crisp, 500 franc notes. The management at Vuitton tipped off the police, who soon discovered that, although these goods were being shipped out of France and were therefore normally exempt from value added tax, no one had ever bothered to apply for a VAT rebate. Subsequently, the police began noticing long queues of shabbily dressed Asians waiting to get into an apartment near the Madeleine. And all of them were carrying shopping bags filled with French designer goods.

 

The authorities started making arrests in spring 1992 and quickly pulled in nearly 100 people. The stores themselves were not implicated. When the French police raided the apartment, they found $450,000 in cash and nearly $1.3 million in goods, including 2500 Vuitton and Hermes products waiting for shipment to Japan. They also found bank statements detailing $2.7 million in local accounts.

 

No one can say for sure how much the syndicate had laundered since 1985, but French Customs were able to determine that, in 1991 alone, the gang managed to wash around $73 million.

*****

 

 

The Triads are the most notorious of the Chinese mobs, a blood brotherhood dating back to the 17th century and the overthrow of the Ching Dynasty. When their rebellion ultimately failed two centuries later, many members fled to Hong Kong, Indochina and North America.

 

Independent units linked through an oath of fraternity, the gangs deal in everything from drug trafficking and money laundering to business extortion and burglary. They are the primary force behind Southeast Asia's "Golden Triangle." Spanning the mountains and valleys that cut across the borders of Laos, Thailand and Myanmar, which used to be called Burma, the region produces 60-120 tons of heroin annually. A kilo of this Triad-distributed drug wholesales at $400,000-$600,000. Cut to six percent purity, the per-kilo street value can top $6-$10 million.

 

Unquestionably, the most influential power in the world's heroin trade, Triad predominance in the marketplace has grown and thrived since Hong Kong was returned to China. Police there have reportedly identified 57 active Triad organizations with offshoots operating in Taiwan, the Philippines, Vietnam and Australia.

 

But their future lies in North America. In late 1992, the Toronto Globe and Mail reported that 17 senior Triad leaders applied to emigrate to Canada. All of them were barred, as were the 14 who applied in the first months of 1993. The seriousness of the problem is documented by a classified report of the Royal Canadian Mounted Police, which describes the Triads as "heavily involved" in drugs, gambling, extortion, smuggling, counterfeiting, armed robbery and money laundering.

 

Similarly, a top-secret evaluation by a combined task force of Australian law enforcement agencies, including the National Crime Authority, the Federal Police, Customs and various state police forces, divulged that 85-90 percent of all the heroin coming into the country was owned by Chinese groups directly linked to organized crime in Hong Kong and China. These gangs were additionally associated with groups operating out of Vietnam, the Lebanon, Italy, Turkey, Romania and New Zealand and with a network of motorcycle gangs in Australia, which they use as the backbone of their marketing operation.

 

The report, which was never intended for publication, identified hundreds of Chinese criminals operating in the country, many of them otherwise known as influential members of their local community. It warned that these people, along with their associates, had built an underground Chinese banking system to launder drug money and abet widespread extortion rackets. The report concluded that Australia was ill prepared to deal with this threat, having totally failed to understand the nature of Chinese organized crime.

 

Today, Chinese gangs are securely established in San Francisco, Los Angeles, New York, Toronto and Vancouver. The have long had a presence in London but are showing up in places where the Chinese don't have traditional ties, such as Germany. When police there raided 90 Chinese restaurants, they questioned 653 people, arrested 102, seized 24 false passports, more than $1 million in cash, large amounts of cocaine and heroin, and several weapons. They also uncovered evidence of what the police described as "Mafia-type" money laundering schemes.

 

In certain respects, organized crime throughout the world is similar. When the end of the Cold War left terrorists without any source of income, they turned to drug trafficking and money laundering. Today drugs are the principal means of financing terrorism. And except for their claim to be waging political wars, groups such as the Irish Republican Army, the Basques' ETA and the PLO are just as skilled at law-breaking as the Yakuza and the Triads.

 

Despite peace in Northern Ireland, the IRA still rides shotgun on shipments for international traffickers, runs protection rackets, deals drugs and robs banks and post offices on mainland Britain. They were once believed to be responsible for 800-2500 armed heists a year. Cash rich, they wash money through pubs and drinking clubs, taxi companies, construction firms and private security services. They've also been known to invest laundered money on the London Stock Exchange. During the early 1980s, the IRA bought shares in a quoted British company worth £200 million, then used offshore brokers to take it over. They permitted most of the company to be legitimately run but kept a corner of it to wash £30 million over an eight-year period.

 

Perhaps as much as $5 million a year is sent to the IRA from the US through NORAID. Considering the large Irish population in Massachusetts, it's hardly surprising that the Bank of Boston had been used as a sink for a cell of the Provisional IRA. As far back as the early 1970s, an ad hoc coalition formed between active members of that cell and local Mafia dons. Organized crime wanted marijuana, the Provo sympathizers became the importers. The middleman, Joe Murray, was a large ill-tempered man who ran a towing company in Charlestown. Dedicated to the British defeat in Ulster and trusted by his Italian benefactors, Murray smuggled tons of drugs into the Boston area on fishing boats. The cash he received for his efforts, laundered through the Bank of Boston, was spent on arms which those same Murray’s boats then transported to Northern Ireland.

 

That terrorists should align themselves with organized criminals is hardly surprising because the terrorists wind up being sent to the same jails as organized criminals. They bide time comparing notes. Then, when they get out, they join forces.

*****

 

 

The South American cartels are a one-product industry. By comparison, the Mafia is a multinational conglomerate with a wide array of commercial interests, ranging from extortion and prostitution to arms dealing, protection, gambling, money laundering and drugs --- both heroin and cocaine. What’s more, they bring to their businesses a great deal of expertise. Organized crime in Italy is said to control as much as 20 percent of all commercial activity, with interests ranging from drugs and murder to jeans and real estate. One study credited them with controlling half of the financial holding companies in the country, 20 percent of the construction industry and about a quarter of the food distribution business. Despite crackdowns, they reach into every aspect of national life, wielding influence in every town throughout the country. In the major cities like Rome, Milan and Naples, at least half the shops, bars and restaurants pay protection money to them. In Sicily, especially in the capital city of Palermo, all of them do.

 

Like any soundly run multi-national looking for opportunity, they have now teamed up with Russian organized crime gangs for joint ventures in Eastern Europe and the former Soviet Union. In the past they’d also teamed up with the Colombian cartels.

 

They helped their new found friends in Latin America find an ingenious way to smuggle drugs by turning cocaine into cardboard. A Mafia chemist discovered that he could mix unrefined cocaine paste with cellulose to produce boxes. A legitimate business was set up, using an Italian front company to sell the cardboard to a Colombian front company. Ordinary goods were then packed in them and shipped back from Columbia to Naples, where the cardboard was dissolved in acid, producing unrefined cocaine paste.

 

They also taught the Colombians a thing or two about money laundering. The cartel opened Universe Gold Enterprise and Symar Joyeros Mayoristas in Panama while the Mafia formed Aurea International Trading and Eurocatene in Italy. Cocaine cash was smuggled out of the States, washed through banks in Switzerland, Spain and Mexico, then sent to Italy where Aurea and Eurocatene used it to buy gold bars. They shipped the gold to Universe and Symar, who sold it on with false invoices to front companies in Cali. The gold was then sold on the open market and the now laundered proceeds were deposited against sales receipts.

 

Apparently, the DEA suspected something like this might be going on as long ago at the early 1980s, but their investigation into Symar’s operations was halted. General Noriega personally put a stop to it. When a lead to Symar was picked up again in 1994, the Italian police put the ring under surveillance. They spent three months watching Aurea and Eurocatene move a ton of gold a month to Panama, before shutting them down and arresting eight people --- five Italians, two Panamanians and Gustavo Upegui Del Gado, a man described as the Cali cartel’s gold expert. However, during 1994 the Mafia-Cali link moved over 15 tons, which is such a hyperbolic amount, that for a while they accidentally depressed the world market price of gold.

 

The Mafia also dabbles in government. Until recently, it was the single most consistent political force in Italy since 1945. Known inside the country as "La Piovra," the octopus, today’s Mafia is made up of three tightly entwined groups. There is the traditional bunch out of Sicily, there is the Camorra in Naples and there is the Ndrangheta from Calabria. Although, all three have had their problems.

 

Giovanni Falcone was a magistrate determined to put an end the Mafia’s 35 year post-war reign of terror. Around 1990, he discovered the Cassa Rurale e Artigiana di Monreale, a bank based in a small town near Palermo that laundered Mafia money for 20 years. Given time, he'd get into the bank and pry loose its secrets. But that was too close to home for Salvatore "Toto" Riina, the so-called boss of bosses. Known as "the beast," Riina had been in hiding since the mid-1970s, living with his wife and children in the hills around the village of Corleone, a name synonymous with the Mafia thanks to Mario Puzo’s novel, "The Godfather." It's obvious that he could have been found if the authorities looked hard enough. After all, when they needed to find him, they did. Toto worried that Falcone was smart enough to understand how that bank was the start of a money trail that lead to politicians and judges in Riina’s pocket. Falcone had to be stopped. And in May 1992, Falcone, his wife and three bodyguards were killed when their cars were blown up.

 

Stepping in to take Falcone’s place was his colleague Paolo Borsellino. Riina had him killed, too.

 

But Toto had seriously misjudged the nation’s patience with his gratuitous violence. Politicians on his payroll were unable to contain the national rage. Police raids across the country captured more than 4000 people and charged them with criminal activities. Soldiers were sent into Palermo to patrol the streets. The sledgehammer approach had knocked the Sicilians so far off course, that nearly 500 mobsters were suddenly willing to denounce their once cherished code of silence and exchange information for leniency.

 

A charmer named Mario Santo "Half Nose" Di Matteo turned on Riina and named him as Falcone’s killer. Special airborne units sought him out and in 1993 they arrested him, at home where he’d lived for 20 years.

 

At the same time, the magistrate who succeeded Falcone and Borsellino now went after the Cassa Rurale e Artigiana di Monreale, bringing to justice a leading Sicilian businessman and three bank executives. Just as Riina had feared, the money trail lead to certain politicians, including the former Premier Giulio Andreotti.

 

As the influence of the Sicilians was crumbling, the Camorra were faring only slightly better. A huge money laundering racket was smashed in Naples, leading to 19 arrests and contacts in Angola, Austria, Belgium, Britain, France, Iraq, Kuwait, Luxembourg, the Netherlands, Niger, South Africa, Switzerland and Zambia. Among those arrested was 72 year old Roger D'Onofrio, an American who the Italian authorities believe is a former CIA agent. Born in Italy, D’Onofrio lived most of his life in the States, returning home in 1993. During his years at the CIA, the Italians believe, he was a laundryman who set up and maintained secret bank accounts around the world --- but notably in Switzerland --- which the agency used to pay operatives.

 

That was followed by the arrest of 100 Mafia suspects in a joint Italian-Spanish operation. And the two operations were linked when the Spanish asked the Italians for permission to question D’Onofrio about his links to the Vatican Bank and money supposedly laundered by the Archbishop of Barcelona, Cardinal Ricard Maria Carles. He is alleged to have overseen the washing of $65 million through the Institute of Religious Work, reminiscent of the charges made against the now retired American Cardinal Paul Marcinkus.

 

Rushing in to fill what vacuum left by the Sicilians and the Camorra was the Ndrangheta, a collection of some 160 rural clans tied together by secret rituals that derived from a clandestine organization in rural Calabria at the end of the 19th century.

 

Bandits by profession, after World War II many of the members drifted into extortion, kidnapping and eventually drug trafficking. Thanks almost entirely to the attention the Italian police has paid to the Sicilians and the Camorra, the Ndrangheta can now boast a near monopoly on European heroin trafficking. Years ago they emigrated to other countries, in particular, Australia, where today they are estimated to number as many as 15,000. More recently they have infiltrated parts of Germany, Belgium and Austria and have an especially strong presence in the south of France.

 

It was the Sicilian branch, however, that set up the first American subsidiaries. They arrived in the United States steerage class, in the first quarter of the century, along with great waves of other Italian immigrants looking to escape war and famine. Banded together by family, village and a common dialect, the Sicilians worked their way through prohibition and into racketeering, gambling and infiltration of the labor unions. Their children went into the family business but they had enough money to see that the third generation, Don Corleone's grandchildren, got a good education. Pushed to be better than their parents they became lawyers who could protect the family interests. Or they got themselves MBAs from respectable business schools and taught the elders how to transform cash into legitimate, tax-paying concerns.

 

Referred to as La Cosa Nostra, it was back in the 1950s and the 1960s, at the height of their influence, when policing methods were much less effective than they are today, that they numbered around 7000. Now more dispersed and considerably smaller, there are still well-entrenched pockets of influence. The families who run New York have been, for at least 40 years, the single largest commercial landlords in the city.

 

Also major heroin dealers, from 1979 to 1984, a Mafia clique franchised distribution through a network of pizzerias that stretched across the industrial northeast and into the midwest. The original idea was to use the restaurants to launder money by mixing narcotics receipts with pizza sales. But heroin soon became the main item on the menu and there was simply too much money to put into the tills. They needed to find other ways to wash their profits.

 

One fellow who had a solution was fish broker Sal Amendolito. Years before he'd been involved with a financial consultancy in Milan that illegally moved currency to Switzerland for wealthy Italians. When that dried up, he imported fish into Italy. After a while, he moved to the States to export fish to Europe. Around 1980, he was contacted by his former associate in Milan, Sal Miniati, who said he was representing a Sicilian construction firm. Miniati's story was that they were building a large resort with American investors all of whom happened to run pizzerias. He explained, they had a lot of cash that needed to get to Switzerland, to pay for the shares in the investment, without attracting any attention. At the time, Miniati revealed, $9 million was waiting to be moved. For his services, Miniati offered his old friend $90,000.

 

Amendolito agreed and the first installment of $100,000 was delivered to him that July. To keep deposits under the $10,000 reporting limit, he opened accounts in a dozen banks. A few days later he bought cashier's checks for the amount on deposit, subtracted his one percent commission, then consolidated the stash in new accounts which he opened in four different banks. From there the money was wired to Switzerland where Miniati took over.

 

The scheme was rudimentary, leaving a money trail broad enough for a child to follow. But Amendolito decided it would work as long as the payments stayed relatively small, like $100,000. But at the end of July, Amendolito was handed $550,000 in small bills. And now he had a problem. It was too much money for his established banking network.

 

Through a contact at the Swiss investment house Finagest, he was told that Conti Commodity Services in the World Trade Center could accommodate him. However, when he arrived at Conti's offices carrying four small suitcases packed with cash, they said they didn't have the facilities for that much and referred him to the Chase Manhattan Bank downstairs. An officer there repeated Conti's excuse and suggested Amendolita find a bigger branch. He wound up leaving the money at Chase headquarters a few blocks away where it was credited to a Finagest account held at Credit Suisse in Lugano.

 

Deciding that had all been too haphazard, he went in search of a better way to wash large quantities of cash and settled on smuggling it out of the country to be deposited in the Bahamas. Before long, as the amounts increased with each transaction, Amendolito had worked out a deal with Miniati that some of the money would be taken by couriers directly from New York to Switzerland.

 

Miniati now mentioned that some people in Sicily were interested in using his services. Amendolito demanded on a larger percentage and settled at four percent. To handle their business, he opened an office on Madison Avenue, installed a cash-counting machine and added a bank in Bermuda to his list for cash deposits. But Amendolito had the nasty little habit of sticking his fingers into the cookie jar. When one of his new friends in Sicily discovered he was helping himself to a few extra pennies on each deal, the man wasn’t especially pleased, and politely suggested it might be healthier if Amendolito paid him back. Instead, Amendolito vanished.

 

The mob replaced Amendolito with an Italian banker, Antonio Cavalleri, who managed a Credit Suisse office in the alpine village of Bellinzona. He was instrumental in creating a company called Traex, which supposedly dealt in property and raw materials. In reality it didn't do anything except wash pizza connection money. With the help of a Swissair employee, $10 million was flown out of New York for deposit into the Traex account at Cavalleri's branch. As far as the mob knew, no one was yet on to them.

 

However, early in 1979, just as the pizza connection was really getting started, Italian Customs stumbled across a suitcase at Palermo Airport containing $497,000. Their investigation led to the discovery of five working heroin laboratories in Sicily. The FBI heard about it and wanted to know more. Thanks to information that the Italians were willing to share, the FBI identified Amendolito, followed some of his transactions and located his office on Madison Avenue. From there, it was easy to get phone records. From that, their interest broadened to a wider group of players.

 

Ironically, it was the as-yet-unsuspected Swissair employee who first started getting cold feet about all this smuggling. The mob replaced him with Franco Della Torre, a laundryman who'd worked for them in Switzerland. He came to New York as a certified representative of Traex, opened an account with stockbrokers Merrill Lynch and during the first four months of 1982 washed $5 million there. Towards the end of April, he opened a Traex account with brokers EF Hutton and, in 11 cash deposits in under ten weeks, washed $7.4 million.

 

Worrying that such an enterprise could attract attention, he opened a second EF Hutton account, this one in the name of Acacias Development Company. Over the following ten weeks, he laundered a further $8.2 million through Hutton. But his concerns were well founded. Like Amendolito, he too was leaving a broad paper trail. Merrill Lynch and Hutton both kept records of all these transactions.

 

In 1983 Amendolito resurfaced and was arrested for fraud in New Orleans. By this time, the FBI were already onto Della Torre. So a joint task force was formed to work out of the office of Rudolph Guiliani, then a brash young US Attorney for the Southern District of New York. He attacked from two sides, going after the drug dealers and separately, going after the laundrymen. Because none of his targets had yet developed strong money laundering skills, the second trail proved easier to follow.

 

Agents from the FBI, Customs, the DEA, the IRS and the Bureau of Alcohol, Tobacco and Firearms put a case together that brought grand jury indictments against 39 members of the ring for their participation in drug trafficking and money laundering. Sal Amendolito became a government witness, testified against the others and was never charged.

 

Because some of the culprits were hiding in Italy, including Della Torre, only 22 actually stood trial in New York. After 17 months of hearings, 55,000 FBI wire taps --- most of them in Italian --- plus the murder of one suspect, 21 defendants were found guilty. The judge sentenced the five Mafia ring leaders to terms of 20-45 years. He also ordered four defendants to pay $2.5 million to help fund treatments for heroin addicts.

 

The group had smuggled 750 kilos of heroin into the States, with an estimated street value of $1.6 billion. In taking them to task, some major financial institutions had also been embarrassed, namely Merrill Lynch, EF Hutton and Chemical Bank in New York, Handelsbank in Zurich and, especially, Credit Suisse in Bellinzona. One of the accounts at Credit Suisse was secretly called "Wall Street 651." The owner was Oliviero Tognoli, an well-known industrialist to whom the Mafia chieftains secretly turned for financial advice. Nearly $20 million had passed through his account. Some powerful men were locked away for a long time and the case was widely publicized as a major victory for the good guys.

 

With hindsight, it was something more. The bad guys had washed over $50 million. But this time, for the very first time in a major drugs case, the Feds had been able to follow the money. Both sides now realized that the rules of engagement had been changed forever.

*****

 

 

Italian mobsters have had a physical presence in Latin America for many years, notably through the maritally linked Cuntrera and Caruana clans, which have overseen their heroin empire from a once-secure base in Venezuela. Little by little, though, the authorities have been able to chip away at their sovereignty. In 1985, British and Canadian police seized a $300 million shipment of heroin sent from London to Montreal and convicted one of the Caruanas for it. Two years later they put a dent in the families' budgets by grabbing a monstrous hashish cargo in Newfoundland and another relative went down for that one. The following year the Venezuelans arrested more kinfolk for conspiring to traffic cocaine. That particular bust was significant because, until then, the authorities suspected, but could never prove, that the two families had ties to the Colombians. Now they understood that there was no way they could operate next door to the cartels without permission.

 

A major break came that same year when John Galatolo, a south Florida businessman, was convicted of smuggling cocaine. He told the DEA he'd personally brokered a recent deal for the Mafia to buy 600 kilos of coke from the Cali cartel. According to Galatolo, that deal firmly established the Mafia's cocaine franchise for Italy.

 

Originally, the Colombians had restricted the Mafia to their home base, hoping to distribute their own powder throughout the rest of Europe. But Europe is a long way from Latin America and although the Cali mob could function easily in Spain --- after all, they spoke the language and often hid out there --- northern Europe proved to be a more difficult market. Transactions started going wrong and shipments were seized. It finally came to a head in February 1990 when the Dutch police found three tons of cocaine hidden inside a consignment of fruit juice.

 

Pragmatists that they are, the Colombians acknowledged defeat. They needed the Mafia's established distribution networks throughout Europe and turned to the experts. Together they set up front companies to handle the drugs and bank accounts to wash the money.

 

Stopping them would take the kind of international cooperation that was, until this point, unprecedented.

 

The first hint that such an exploit might be possible came in April 1992 when the FBI arrested 14 people in Florida for trafficking and money laundering. In and of itself, the bust was just one of several that month. What made it unique was that the evidence found linked these people to the cartels in Colombia and a Calabrian Mafia cell in Toronto.

 

Five months later, on September 28, police from eight nations --- America, Great Britain, Canada, Colombia, Costa Rica, Spain, Holland and the Cayman Islands --- launched what can only be described as an all-out nuclear attack against the Mafia-cartel connection. It was code-named Green Ice and it represented the first time that an operational international task force had been formed specifically to take on the launderymen.

 

Undercover agents posed as money launderers, starting first in San Diego in 1989, then slowly building up contacts in Texas, Florida, Illinois and New York. They ran a chain of leather goods stores, subsidiaries of Trans Americas Ventures Associates, a DEA front company that imported merchandise from Colombia. Each ton of imported leather was listed as 20 tons, creating enough false invoices to wash drug profits back to the cartel's banks in Colombia and Panama.

 

Before long, the Cali bunch was so happy with the way Trans Americas ran their sink that they asked them to expand overseas, first into Canada and the Caribbean, then into Europe. The agents working the scam were only too pleased, as were the various foreign law enforcement agencies that were brought into the operation as the money laundering sting expanded.

 

After nearly three years of ground work, in one momentous, simultaneous swoop on three continents, more than 200 people were arrested worldwide. They included 112 in the States, three in Britain, four in Spain and 34 in Italy. Among the people nabbed were seven primary targets, then believed to be the top-ranking financial managers of the Cali cartel. They got Rodrigo Carlos Polania, a former inspector of Colombia's national bank, and they got Jose "Tony the Pope" Duran, described by the Italian police as the world's most important cocaine distributor. A subsequent request by Interpol for fingerprint files on him revealed dossiers in 20 different countries where he’d used 20 different names. He’d introduced Pedro Felipe Villaquiran, his chief European representative, to Mafia bosses in Rome and had met with Bettein Martens, a major Dutch money launderer. They too were arrested.

 

When the trap was snapped shut, 15 money laundering front companies were raided and $54 million in cash was seized, alongside three-quarters of a ton cocaine. Besides a pan-European animal protection society and a Sicilian wine exporter, the companies included one in Mantua, Italy run by an 80-year-old woman with no business experience who laundered tens of millions of dollars for her nephew.

 

Thousands of files were confiscated on both sides of the Atlantic. One truly outstanding prize was a wealth of computerized records found in an office belonging to the Orejuela brothers, which detailed the cartel's worldwide money laundering. Other documents pointed to several Mafia-cartel joint ventures, including drug trafficking along the French Riviera and money laundering in Germany.

 

Since Green Ice, and largely as a result of it, the Central Operational Service of the Italian police and the Internal Security Service of the Interior Ministry arrested Giuseppe Madonia, the Mafia's number two man in Sicily; Carmine Alfieri, a capo in the Camorra; three Sicilian brothers who'd come to be called the Mafia's private bankers; Antonio Sarnataro, who was the Camorra's chief laundryman; and, in May 1993, Michele "The Crazy One" Zaza, the alleged overall leader of the gang. Ten more Camorra members were arrested with Zaza on the French Riviera, where a Camorra money laundering network had invested $1.3 billion in hotels, stores and small industry. Another 40 suspects, all tied to Alfieri, Sarnataro and Zaza, were taken into custody in Italy, Belgium and Germany.

 

When the initial success of Green Ice was reported in the press, the then US Deputy Attorney General, George Terwilliger, declared the operation, "A stake through the heart of the illegal drug business."

 

At the time, a senior Cali cartel member in Colombia realistically labeled it, "A disruption."

 

 

 

*****