Chapter Twenty

 

HANGING OUT THE WASH

 

 

"Money laundering is the crime of the '90s."

 

Business Week

 

 

 

 

In the summer of 1969, Richard Nixon pledged to formulate a new national policy in the fight against drugs. He might even have elevated that fight to a full-blown war had it not been for America's on going "police action" in Southeast Asia.

 

Colombian cartel cocaine was just beginning to infiltrate American culture. Nixon, naively unaware of how complex the problem was, arrived at the conclusion that marijuana and cocaine were equally dangerous. Needing a culprit, he settled on Mexico. Accordingly, he stepped up surveillance of America's southern border and coerced the Mexican government into herbiciding marijuana fields. He succeeded in putting amateur smugglers, kids who dealt home-grown marijuana, out of business. But he left the field wide open for professionals, grown-ups flogging cocaine. Because coke is a powder, it's easier to smuggle than bales of marijuana and is therefore less risky. It is also a higher-profit product. So Nixon's new national policy did little more than to create a huge competitive advantage for the deadlier drug.

 

By the time Jimmy Carter moved into the White House, things were getting out of hand. Dozens of American cities were being transformed from wholesale marijuana markets to major cocaine trading centers. It was party time for street pushers, pimps, pilots, speedboat captains, and any federal agent who could be bought.

 

For the laundrymen, it was the Second Coming.

 

When the television program "60 Minutes" brought the depth of the problem into the nation's livingrooms, exposing how otherwise respectable businessmen were jumping on this profit bandwagon, Carter approved an inter-agency task force that called itself "Operation Greenback." Customs officers and IRS agents identified and approached individuals who'd banked large amounts of cash. Their question was, where did you get the money? If the suspect answered, it was US-generated income, then the IRS would mention the words, "tax evasion." If the suspect answered, it was imported, then Customs would define the word "smuggling." If he wouldn’t answer, or couldn’t answer without admitting it was drug money, then he was slapped with charges of drug trafficking, conspiracy and money laundering. The success of Operation Greenback --- 215 indictments, the seizure of $38.8 million in currency and $14.6 million in property plus $120 million in fines --- formed the model for other multi-agency joint ventures, including the creation in 1984 of Organized Crime Drug Enforcement Task Forces.

 

Ronald Reagan appointed Vice President George Bush to vanguard the nation's combat against drugs but he never displayed much of a stomach for severe financial prosecution. Within a year, he downgraded Operation Greenback from an inter-agency effort directed out of Washington to a small unit working out of the US Attorney's Office in Miami.

 

One gauge of Bush's failure to grasp the problem was reflected in the cash surplus figures, money that wouldn't be found in a particular area under normal banking conditions. After de-emphasizing Operation Greenback, surplus cash in Jacksonville and Miami shot up by $5.2 billion. Like Nixon targeting the Mexican border, the moment Washington concentrated its forces in south Florida the laundrymen headed for healthier climates. In this case they went to southern California where the cash surplus quickly topped $3 billion.

 

Despite of evidence to the contrary, the Reagan administration seemed convinced that money launderers didn't bother with cash any more. They even went on record saying that professional criminal financial managers did their banking electronically. As for the cash-filled garbage bags shown on the evening news with every drug bust, they shrugged, all entrepreneurs keep petty cash on hand.

 

While Reagan and Bush weren't looking, along came crack. A crystallized form of cocaine, cheaper than heroin or coke, it can be smoked like hashish. With the North American coke market saturated and prices falling, the cartels saw crack as a financial godsend. One ounce of cocaine could become 300-400 crack vials and their profits would soar. By the mid-80s, both of Colombia’s main cartels were shipping crack by the ton. Nickel and dime bags, $5 and $10 worth, widened the market by attracting middle class white consumers who gave it social status. Because this business didn't require more than a few dollars start-up money, it also brought a new category of seller onto the street, black teenagers.

 

There was a time when sports offered the main hope for any black kid who wanted to escape from the inner-city. If he could play baseball or football or, even better, if he could play great basketball, there were people who’d back him through high school and college. Only a tiny percentage of those kids ever got to the pros but at least sports held out hope. And, in some cases, hope was enough. Crack changed that.

 

When Bush 41 moved into the Oval Office, Customs and DEA officials tried to persuade him that a full-scale attempt to eradicate the production of illicit drugs around the world would be costly and futile. In some countries, government officials were openly cooperating with drug producers. A top-secret State Department document noted that the narcotics trade in Laos had become such an integral part of the local economy that supporting it was "de facto government policy."

 

The President was also advised of the direct involvement by Syria in the growing, refining and trafficking of drugs. The CIA repeatedly told Bush that Damascus was earning up to $1 billion a year, about 20 percent of its national income, by subsidizing the opium and hashish industry in the Bekka Valley of Lebanon. The main market was then, and is still, the United States. Named as the main culprits by the CIA were the Syrian President's brother, the Defense Minister and the commander of Syrian military intelligence. But Bush needed the Syrians during Operation Desert Storm and later to stay at the tables during the Middle Eastern peace talks. So, at least in the short term, it suited American foreign policy to turn a blind eye to international heroin trafficking.

 

Those officials who understood what the war on drugs was really all about urged Bush to put his resources into the battle on the financial front. The President's response was two-pronged: he planned to wipe out street dealers by discouraging demand through education; and to send US troops into the mountains of Colombia to make massive waves of arrests.

 

Education failed. And the massive wave was, at best, a brief high tide. Between 1989 and 1991, only 26 cartel members were captured and sent to the United States. The Colombians then made extradition unconstitutional and Saddam Hussein invaded Kuwait. Bush’s attention turned back to foreign policy. His Gulf War was still to be fought. His drug war had already been lost.

 

Next, Bill Clinton didn’t have to inhale to understand something his immediate predecessors did not. That 90 percent of all crime is financially motivated and therefore the most effective way to fight criminals is to go after their money. He put money laundering on the agenda at the celebrations for the 50th anniversary of the United Nations by warning drug traffickers, terrorists and the world’s organized criminals, "Your dirty laundry is no longer welcome."

 

Congress mandated a certification process which required the President to assess foreign cooperation in counter-narcotics efforts on a yearly basis. Consequently, the State Department named 11 nations that were seen to be aiding and abetting the laundrymen. However, six of them --- Bolivia, Colombia, Lebanon, Pakistan, Paraguay and Peru --- were considered vital enough to US national interests to justify continued support from Washington. The remaining five are Afghanistan, Burma, Iran, Nigeria and Syria. An additional State Department roster, not publicly released, added to the usual suspects Antigua, the Cayman Islands, Venezuela, Thailand, Austria and Cyprus.

 

The certification process was a report card where the grades were pass, fail and still thinking about it. Countries who cared about passing started doing something about money laundering whereas countries that couldn’t care less about failing had sufficient income from drug dealing that only the most severe economic sanctions could grab their attention. To make sanctions effective required a global effort and it was clear from the way embargoes were violated in Iraq and Bosnia that many offending countries couldn’t care less about the rest of the globe. It was equally clear that most of the globe didn’t care a hell of a lot about America’s drug problem.

 

If the list had been compiled under the same criteria by another country, the United States would be cited as the worlds biggest per capita user of illegal drugs, and therefore wouldn't pass. That brings the argument straight back to the Third World contention, before you tell us how to live, clean up your own streets.

 

Clinton plainly hoped to do just that by putting more policemen on the beat. But that negates the fact that once drugs reach the streets it’s probably too late. What’s more, arresting, convicting and imprisoning traffickers does not always prevent them from running their cartels. And then, for every trafficker taken out of circulation, a dozen more seem willing to take his place.

 

For the first time, the money laundering statutes were used to prosecute a trafficker for a drug deal conducted outside the United States. A Pakistani man, Asif Ali Khan, was indicted in 1995 in Louisiana after purportedly smuggling 10 tons of the hashish between Australia and Pakistan. The Justice Department claimed jurisdiction because $300,000 worth of the $67 million deal was washed through the Pioneer Bank and Trust Co. of Shreveport, Louisiana.

 

By concentrating on the laundrymen, following the money trail, the government could drive up the cost of doing business. Traffickers were suddenly paying anywhere between 5-25 percent to get money collected, washed and into his pocket. The downside was that added expenses were reflected in street prices, and there is a direct correlation between increased street prices and increased street crime.

 

From the middle of the 1980s to the middle of the 1990s, the war on drugs cost more than $100 billion. It's fair to ask, what did America get for its money? The answer is, probably not a lot. Doing nothing would have created anarchy but in that same ten year period drug related deaths have doubled and drug-related murders have tripled. $100 billion later, the problem has gotten so very drastic that perhaps only very drastic solutions can even attempt to solve it.

 

One idea might to recognize, officially, that there is a difference between the professional, international drug trafficker and people who deal in small amounts simply to support their own drug taking. When someone buys three grams of coke and sells two to make the money that one would have cost, technically that’s dealing. And in some states, a few ounces moved like that can put you away for a very long time. But when drug addiction is seen as an illness --- much the way alcoholism is generally recognized as a disease --- then this sort of "amateur dealing" could rightfully be considered a symptom of that illness. The idea is not to decriminalize drug dealing at any level, but to treat "amateur" dealing more humanely than many states currently do, while legislating that global trafficking must become a capital offense.

 

Establishing that difference could make a difference.

 

The thing that men like Escobar and the Orejuela brothers always feared the most was extradition to the United States. But simply indicting traffickers and demanding that they be handed over --- even with the possibility of the death penalty hanging over the heads --- probably wouldn’t put them all out of business. However, by placing severe economic sanctions on any country giving them harbor; by sending special CIA-DEA-FBI "commandos" into a country to kidnap traffickers and drag them back to the States; and by putting millions of dollars on their heads, wanted dead or alive, it’s a good bet that at least some of them would give up drug dealing in favor of full-time survival.

 

Hand in hand with that, anyone who has any professional dealings whatsoever with these indicted traffickers, would also be subject to charges of global trafficking.

 

After all, in order to deal drugs the way they do, the global traffickers have set up huge corporate structures, taken several pages out of the best management books, and constructed their multi-national organizations accordingly. They deliberately separate the marketing and financial sides of their business, keeping the two as far apart as possible, in order to create that all important situation where the drug dealers never know about money laundering and the laundrymen --- those white collar professionals whose business it is to handle money --- never see drugs.

 

By tossing street dealers, smugglers, marketing people, bankers, accountants, front-company people and lawyers into the same boat, the laundrymen would be forced to come face to face with the drugs and their "plausible denial" would fall on deaf ears. Their only way out would be the clause that American citizens would have one chance to work a plea-bargain. In exchange for all of the global traffickers assets, other accomplices and "other invaluable information," they could trade the electric chair for a term of life imprisonment. It is Draconian, to say the least. But while the capital crime of global trafficking might not put an end to America’s drug problems, it would brutally focus the attention of America’s laundrymen.

*****

 

 

Because the underground economy functions almost exclusively with dollars, the Reagan administration radically proposed a way to render the traffickers’ dollar mountains useless. They were going to change the color of money. In those days, the United States was the only country in the world whose currency was both the same size and the same color in all denominations. Reagan's idea was to announce on a Monday morning that within seven days green $20, $50 and $100 bills would no longer be considered legal tender. Instead the government would be issuing newly designed banknotes, perhaps bigger, perhaps smaller, perhaps yellow, red or blue. All anyone would have had to do was walk into a bank and exchange the old notes for the new notes. But any cash transaction over $1000 would be recorded and the information would be passed on to the IRS and the DEA. For the average person it wouldn’t have been anything more than a nuisance. Even if someone always carried a few thousand dollars in his pocket, making the switch would take only a few minutes. But it could cripple a drug dealer with several million in cash hidden under his mattress. Swapping thousands of old $20s, $50s and $100s for the new money in such a short period of time, even using an army of smurfs, would be out of the question. And once the week was up, his cash mountain would be worthless.

 

The DEA even suggested that government might print two types of currency. One would be legal tender exclusively inside the country, the other would be legal tender exclusively outside the country. The only place the two would be interchangeable would be at specially controlled financial institutions. At least in theory, that should put an end to dollar smuggling.

 

Going one better, there have since been calls to do away with all paper money, to turn the American economy into one that functions solely with checks and plastic. Although there might have to be some coins left in circulation, if for no other reason than to keep the vending machine industry happy, by relegating folding money to history the government would be delivering a fatal blow to drug dealers. It would also be a positive step towards putting loan-sharks, tax evaders, protection racketeers and kidnappers out of business.

 

There are new bills in circulation that are different from the old ones. But the idea of a sudden and total change never got very far. Legislators wrote it off as unrealistic. They claimed that such a stunt would be too disruptive and cause too much of an inconvenience for tens of millions of Americans. The truth is probably closer to the fact that tampering with the currency to knock out the laundrymen is too abstruse an issue to win re-election votes.

*****

 

 

In 1989, the heads of state of the seven leading industrial nations, known as the G-7, officially recognized for the first time that money laundering was a runaway global problem. Acting in unison, they formed the Financial Action Task Force (FATF) to coordinate a multinational approach to dealing with this crisis. Membership was promptly opened beyond the G-7 nations and now consists of all the OECD countries, plus Hong Kong, Singapore, the Gulf Cooperation Council and the European Commission. Every member has loudly endorsed a proposed blueprint consisting of 40 specific measures intended to deal a lethal blow to the laundrymen, but to date not one single member has incorporated the entire blueprint into law.

 

Since then, however, all sorts of special interest groups have put money laundering on the top of their annual general meeting agenda. Their intentions are good and most of the time the delegates’ hearts are in the right place. In one recent twelve month period: experts from 40 nations met in France to recommended measures to halt money laundering in Russia and Eastern Europe; representatives from 140 governments met in Italy to plot a strategy against the world's criminal organizations; delegates from 180 governments convened in Egypt to mount a global front against organized crime; American lawyers met in Washington to discuss their responsibilities vis-à-vis money laundering; ministers from 25 nations met in Argentina, committing their administrations to fight money laundering; and 600 international law enforcement professionals assembled in England to call for the easing of banking secrecy laws.

 

A fine idea on paper, most of those money laundering conferences are little more than an excuse for certain people to enjoy "working visits" to the Far East and Europe. Conclusions are published and generally disregarded. Although, it must be said that conferences do bring together people who might not have otherwise met and allow them to network. In between banquets and cocktail parties, experts from member states working in various fields --- customs, drug enforcement, banking and financial supervision --- can exchange phone numbers. The bad guys know the other bad guys, so if nothing else, now the good guys are getting to know the other good guys.

*****

 

 

Even if every member of FATF complied fully with the organizations 40 directives, they still wouldn't work.

 

Money is at the root of the problem and money is also at the root of the solution but wherever such huge sums are bandied about, common sense is often given a back seat ride.

 

Start with the genius who wrote the manual for administrative budgeting. Government accountants set annual budgets with two factors in mind: How much is needed next year; how much was spent this year. If an agency was handed $10 billion last year and only spent $9 billion this year, it risks getting only $9 billion next year. So bureaucrats rush around in the final month of the fiscal year to make certain that all of their allocated money is used up. Then, to justify an increase for their next budget, they naturally inflate the threat they're battling to defeat. They may know that $250 billion a year is being laundered but they find an expert to swear it’s $350 billion and warn that if they don't get increased funding they'll never be able to do their job. Given more than they previously got, they now have to spend it all or they'll lose it the following year. So waste is factored into the equation and annually re-creates itself. So are egos. Like the company chairman who brags that he heads a $10 billion organization, in government too there's a tendency to confuse real importance with allocated revenue.

 

No where is that more visible than in asset-sharing programs which offer law enforcement agencies a portion of the bounty they confiscate. Battle lines are drawn for the right to claim a goal and not just to be credited with an assist. Law enforcement agencies pull together but only up to a point. Then it’s a free-for-all to grab the prize. Customs, the DEA, the FBI and the IRS run operations together and often with great success, but each agency fights for control of the task force because being chief pays better than being just another Indian.

 

With cash dangled like an apple on a stick to motivate a mule, some agencies go after cases that produce big cash rewards instead of pursuing more difficult and often more important cases where the prize is nothing but a conviction.

 

Human temptation also gets in the way.

 

Four federal agents in south Florida, three from the FBI and one from Customs, were caught by undercover officers in a sting operation and charged with stealing a total of $200,000 from drug dealers. One of the four happened to have a girlfriend who managed a Great Western Savings Bank branch in suburban Miami and she washed their cash. No sooner had that case broken, when another Customs agent in Florida was arrested on charges of trafficking and money laundering in a separate case. This man was approached to help launder cash derived from the sale of counterfeit goods. The agent, who held down a second job at a financial investment firm, had no trouble laundering his money there in his spare time.

 

The headlines are never short of similar stories. Three sheriff's deputies in LA were convicted of stealing $750,000 in confiscated drug money and laundering it through a gun store. A Tampa police "Officer of the Year" pleaded guilty to five federal drug-related charges. And Rene De La Cova, the DEA agent who personally served Manuel Noriega with his arrest warrant, admitted stealing $700,000 while working on an unrelated money-laundering sting.

 

It's naive to expect that there won't always be rotten apples. Fortunately, the overwhelming majority of law enforcement officers involved with this sort of work do it because they sincerely believe it's a job that needs to be done. And the various sacrifices they're called upon to make in order to accomplish that mission are made unselfishly, honorably and with justifiable pride.

*****

 

 

It's taken a long time but money laundering is finally being seen as both a crime and a symptom of other crimes. Accepting that the best way to combat drug trafficking must be to include methods which deprive criminals of their profits, one logical conclusion is: The day the drug problem is defeated, the money laundering problem will also be defeated.

 

Alongside comes the argument: If you really want to conquer drug trafficking, you have to eradicate the demand for drugs.

 

Yet, if the Ayatollah Khomeini couldn't keep drugs out of Iran, and if Fidel Castro can't keep drugs out of Cuba, and if Saddam Hussein can't keep drugs out of Iraq, how in God's name can anyone seriously expect democratically elected leaders to keep drugs out of the west?

 

In reality, a drug-free America is a pipe dream.

 

One recent survey suggested that, even if law enforcement agencies throughout North America and Europe were able to increase their seizures by 40 percent, the availability of drugs on the streets of New York, Boston, Philadelphia, Miami, Houston, Chicago, Detroit, Los Angeles, San Francisco, Toronto, Vancouver and Montreal would be virtually unchanged.

 

Confiscation is viewed by the traffickers as little more than a tax imposed on them for the right to do business. Either they write off the cargo entirely, or in some places, especially around the Caribbean, simply buy their cargo back for a handful of cash.

 

What's more, there are literally dozens of nations in this world where the government's revenue is less than the profits made by the drug cartels. Wherever this occurs, the peril is that those nations are ripe for picking. The traffickers move in and the country becomes a laundryman's playground. Imagine trying to enforce justice and protect citizens in a country where organized crime is wealthier and better armed than the government. Speaking to Time Magazine several years before his capture, Cali cartel boss Gilberto Orejuela wondered out loud, "Why are countries such as Germany free to export materials used to refine cocaine? Why do countries like Switzerland, Panama and even the US protect money whose origin is dubious?"

 

The question clearly reflected his deep understanding of the narco-economy, that it could not possibly survive if otherwise honest men and otherwise legitimate businesses were not prepared to facilitate the laundrymen. He and others like him went on to prove that the devastation drug trafficking has wreaked throughout the world is monstrous. And the price is paid for nightly on the streets of North American cities.

 

How ironic that the very groups which could have the most immediate effect on the war against the laundrymen --- bankers, attorneys, company formation agents, politicians and countries where financial secrecy is a growth industry --- have the least incentive to take on the fight.

 

The game they play is one of plausible denial. As long as otherwise honest businessmen have half a thread on which to hang their belief that what they’re doing is legitimate, they will continue doing it. They will ask, am I supposed to be a policeman? They may acknowledge that drugs equals money equals drugs but never in the context of their own money. They will insist, if I had to ask where my clients’ money came from every time I got a new client, I wouldn’t have any new clients.

 

As long as otherwise honest men can plausibly deny that they are as guilty of drug trafficking as the dealers they are serving, it will be business as usual.

 

And that business is usually death.

 

The North Vietnamese and the Viet Cong effectively used drugs as a weapon in the guerrilla war against the United States. The Mujaheddin rebels in Afghanistan took a leaf out of their book and made heroin easily available to the invading Soviets. They hooked the Red Army so badly that many soldiers were turning over their weapons in exchange for drugs. Mikhail Gorbachev pulled the soldiers out, not because the Afghans had rocket launchers but because his army had been soundly defeated by hypodermic needles and white powder.

 

Legalization of drugs, or at the very least decriminalization of some of them, are widely touted solutions. There is no disputing that both would help to keep some kids out of jail. But there is no evidence whatsoever that either would keep drugs out of those kids.

 

In jurisdictions where they've tried to negate the obvious consequences of prohibition, the experiment has failed repeatedly. It has created massive health problems, spread drug consumption across wider sections of the population and fueled other crimes. In the Netherlands, for instance, decriminalized drugs are the predominant ingredient feeding a growing and terribly violent white slave trade.

 

Legitimizing drugs also means legitimizing the traffickers and the money launderers. Turning the Treasury into a pusher so that it can tax drugs won’t pay for the damage that drugs do, any more than it will put organized criminals out of business. So until someone can come up with a workable solution --- and there are some people who have arrived at the tragic conclusion that the problem has now become unsolvable --- the advantage remains clearly on the side of the laundrymen.

 

And modern technology is about to render the fight against them useless. Rechargeable cashcards will allow criminals to bypass the banking system altogether and launder profits via the Internet. Computer chips weigh the same if they are carrying $10 or $10 million and unlike credit cards, there’ll be no record of transactions.

 

In its simplest form digital cash already exists. Phone cards carry a certain amount of credit. Deductions are made from the chip with each call. The next step will be cards carrying say $100 worth of credit which you’ll use to buy gum, a ride on a subway, food in a restaurant or a new baseball mitt. Instead of handing the sales person a piece of plastic which sends the transaction to a central computer for billing later, or plastic which simultaneously debits your bank account and credits the sellers, you’ll put your card into a machine and the proper sum will be moved off your computer chip and onto the seller’s.

 

It will work the same way for drug deals.

 

Around the corner are smart cards embedded with enough memory to hold all sorts of data. Once encrypted software is developed to assure privacy, you’ll download money from the cards onto your home computer --- turning your hard disk into your virtual bank account --- access the Internet with your modem and move assets from one jurisdiction to another instantaneously and invisibly.

 

Mastercard and Visa are both developing smart card systems, although theirs will deliberately generate an audit trail because that’s the business their in. Other companies however, including many banks, are developing smart cards that won’t leave an audit trail because that’s where huge profits will be in digital currency technology.

 

There is no doubt that it will change the way we spend our money and therefore change the way we live. Eventually electronic money should replace cash. Consumer habits die hard and there is always great resistance to great change but once upon a time there were people who refused to believe that someday everyone would carry plastic.

 

Nor is there any doubt that cybercash risks undermining both the world’s banking system and the administration of justice. The problem is compounded by lawmakers who, like generals, are always fighting yesterday’s battles. By definition, cyberspace transcends governments and national boundaries. Unless Congress comes to grips with it in time, those people who stand to profit most from the future --- and the most obvious two are banks and organized criminals --- will have long ago worked out how to make the system Congress proof.

 

In the meantime, the bad guys can bide their time, find helpful banks and buy crooked lawyers. They only need to find one country or one bank willing to do their laundry and it doesn’t really matter if that country is half way around the world or that bank is just across the border. The legitimate financial system will always be the neck of a bottle through which dirty money flows and as long as one country or one bank is willing to cheat on behalf of the laundrymen, there is nothing the others can do.

 

The good guys are hampered by a lack of human resources, limited by financial constraints and denied the tools they need by legislatures that must balance judicial concerns with the free flow of honest business.

 

The good guys are seriously outgunned.

 

And since 9/11, the good guys are seriously misdirected. One of the major catastrophes of the George W. Bush years, was the restructuring of law enforcement and the creation of Department of Homeland Security.

 

A misguided effort to focus attention on terrorism, it basically took law enforcement's eyes off the drug money trail. US Customs, which had once been so forceful in the fight against the laundrymen, was no directed to watch the border. Drug trafficking and money laundering, they were told by Bush officials, would be the domain of the FBI and the DEA. Except the DEA was undermanned to do it, and the FBI was totally focused on terrorism, to the detriment of most other crimes. So, effectively, since 9/11, almost nothing has been done about drug money laundering --- at least nothing on the scale that US had once worked this territory.

 

It has gotten so bad that, US law enforcement officers now admit, because they don’t have the manpower to do both, when they're given the option of investigating something that might just somehow relate to terrorist activity or a sure-thing $50 million money laundering scheme, the dirty money case is put on the back burner.

 

As a result, thanks to George Bush's failure to understand this problem, illicit drugs and dirty money are moving more freely now than at any time in our nation's history.

 

*****

 

 

 

 

ACKNOWLEDGEMENTS

 

 

 

 

This book began with John Hurley, who was until the end of 1992, Customs Attaché at the US Embassy in London. First he fired my enthusiasm then he proceeded to open countless doors for me, doors that quite clearly would never have opened without him. I shamelessly dropped his name at every turn because the response always was, if you're a friend of John's, that's all right with me. I hope he and his wife Eileen know the extent of the esteem in which he is held by people who have worked with him, and the extent of the admiration in which they are both regarded by my wife and me.

 

I am also grateful to the many men and women who so kindly assisted me on this project: in the United States, at the Department of Justice, US Customs, the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the Criminal Investigation Division of the Internal Revenue Service (IRS), the office of the District Attorney for New York County and the offices of the United States Attorneys in Boston, Newark, New York, Atlanta, Miami, Houston, San Diego, Los Angeles, San Francisco and Seattle; in Great Britain, at HM Customs, the National Criminal Intelligence Service (NCIS) and the Metropolitan Police; in Canada, at the Office of the Solicitor General, the Royal Canadian Mounted Police (RCMP) and the Canadian High Commission in London; in Australia, at the Office of the Attorney General and the National Crimes Authority (NCA); and throughout the rest of Europe, in various law enforcement and financial regulation authorities.

 

For their time, encouragement and support, I would particularly like to thank Peter Nunez, former Assistant Secretary of the Treasury - Enforcement; Roger Urbanski, Armando Ramirez and Bob Gerber of US Customs; Fran Dyer of the Criminal Investigation Division of the IRS; United States’ Attorneys Alan Bersin, Kendall Coffey, Faith Hochberg, Eric Holder, Gaynelle Griffin Jones, Donald Stern, Mary Jo White and Joe Whitley; Assistant United States’ Attorneys Mark Bartlett, Cyndi Bashant, Joseph Guerra III, Linda McNamara, Wilmer Parker III and Robert Stahl; and various staff members at the offices of the United States Attorneys, including Susan Snook in Miami and Marvin Smilon in the Southern District of New York; Brian Bruh and Anna Fotias of the Financial Crimes Enforcement Network (FINCEN); Special Agent Albert "Skip" Latson of the DEA; Tom Cash, formerly of the DEA and now with the Kroll Agency; Dianne Carr of the American Bar Association; attorneys Gerald Lefcourt and John Zwerling.

 

In Canada, SSgt. Yvon Gagnon and Sgt. Yvon Poirier, both of the RCMP. In Britain, Charles Hill, Graham Saltmarsh, Terry Burke and Tim Wren at NCIS; Billy Miller and Tony Curtis of the Metropolitan Police; Tony Brightwell of Bishops International; Dr. Barry A. K. Rider, Executive Director, Centre for International Documentation on Organized and Economic Crime, Jesus College, Cambridge; Rowan Bosworth-Davies of Richards Butler; Bob Denmark, Graham White and Trevor Taylor of the Royal Lancashire Constabulary; Lucy Lloyd and Henry Stewart Conference Studies for documentation on their money laundering conferences; Michael Hyland, head of Midland Group Security; John Drage of the Bank of England; Eric and Lynn Ellen of the International Maritime Bureau; plus Michael Ashe, attorney at law. In Switzerland, Ticino State Prosecutor Dick Marty and journalist Pascal Auschlain; In the Netherlands, Jan Van Doorn of the Dutch Centrale Recherche Informatiedienst (CRI); On the Isle of Man, Mark Solly; and in France, Rene Wack, chief of the Central Office For the Repression of Major Financial Crimes and attorney-at-law Ron Sokol in France. I also wish to thank the some 50 bankers around the world who gave me their time, many of them speaking frankly enough about specific practices and case studies to jeopardize their own positions. Those bankers are a perfect example of how research for a book like this is often done on the understanding that certain sources never be identified. It means that there are some I cannot thank openly. As matter of fact there are several, not including the aforementioned bankers, to whom I owe a very special debt. Spread out around the world, doing whatever it is they do, they were an invaluable reservoir of information. Needless to say, a few weren't necessarily pleased that I'd managed to locate them and agreed to speak with me only on the clear understanding that I would not help anyone else find them. Others, who might have been easier to come across, spoke with me only after I agreed that no one would ever know who they were or what they'd said. Without wishing to make this sound especially dramatic, it's an easy condition to accept when you understand that my divulging any information about these sources could quite easily turn out to be hazardous to their health. I wholly respect their wishes. But I do have a touch of regret that I cannot thank them individually by name. After all, I am not just indebted to them for their confidences, I genuinely respect their trust.

 

Finally, many thanks to my old pal Gerald Chappell, attorney at law, for his consistently sound advice; Nick Webb at Simon and Schuster in London, Tim Bent at Arcade in New York, and of course, La Benayoun.

 

JR/New York 1996