Lapas attēli
PDF
ePub

Mr. WASSENAAR. I strongly suspect that most wire transfers are in excess of $10,000 or $20,000. I also believe that the volume involved in wire transfers on any given day is probably bigger than any IRS computer can currently handle.

Chairman ST GERMAIN. Are you saying there is no way to have a handle on wire transfers?

Mr. WASSENAAR. I think there is. I think in terms of the amount of wire transfers on any given day, I heard at one time it was roughly $2 billion. I have to assume that most of that is for very legitimate purposes.

Within the past year, Treasury has issued new regulations which will now enable us to have financial institutions provide to us records relating to their wire transfer activity over a given period, which I think will be very helpful. That way, we will not force all financial institutions to provide wire transfer information to us, but we may be in a position to ask suspicious entities to provide wire transfer information to us.

I think that regulation, which just went into effect in the past few months, will indeed be very helpful to us.

Chairman ST GERMAIN. Do you know how big Pan American Bank is?

Mr. WASSENAAR. No. I'm sorry. I don't know the assets of that bank. I did hear Mr. Friedberg mention this morning that he was using Pan American Bank.

Chairman ST GERMAIN. Yes, that he utilized as his personal bank. If that is the case, how did you catch up with Botero? What brought him to your attention?

Mr. WASSENAAR. I'm not certain how we got started, with several hundred investigations going on at any given point in time.

Chairman ST GERMAIN. Could you submit for the record information as to how you came upon the Botero situation?

Mr. WASSENAAR. Yes. I will also add to that the source in the Markowitz case. [Information to be furnished follows:)

SOURCE OF BOTERO CASE The Botero case was referred to the IRS by the FBI, which was conducting an embezzlement case and found a number of unfiled CTRs. The Markowitz case was initiated on the basis of information received from a confidential source. As a result of this information, we placed an undercover agent in the Markowitz organization.

Mr. WASSENAAR. I will submit that in the Markowitz case, we were able to bring that case to a successful conclusion primarily be cause one of our agents posed as a narcotics trafficker who had lots of money which he wanted Mr. Markowitz to launder. Indeed, he did launder a substantial amount of our undercover agent's money. With that operation, we were able to gather not only the evidence on Mr. Markowitz himself, but on the three bank officers who were associated with the Garfield Bank, and two of Mr. Markowitz' associates.

In that particular case, we convicted the three bank officers. We convicted the three associates of Mr. Markowitz. Shortly after Mr. Markowitz' indictment, he was assassinated in the parking lot in Los Angeles. Also in that case, the Garfield Bank was fined a total of $309,000, which was equivalent to their entire income for the

year 1980.

Chairman ST GERMAIN. Do you know how much money the bank tellers were paid?

Mr. WASSENAAR. Yes, they were extracting a somewhat higher fee than the bankers in the Botero case were provided.

I would now, with your permission, like to show you some slides that were taken during an actual money laundering investigation or investigations. The first five slides involve a case that we call the Sonal case, where roughly $200 million was laundered by the Sonal organization over a period of 15 months in Florida.

Sonal was primarily a currency exchange type of an operation. The proprietors of this business had arrangements with the bank to receive up to $1 million a day that could be deposited in the bank account. And as a result, they had a lot of narcotics traffickers bring in their currency to the Sonal organization.

Chairman ST GERMAIN. What type of business was it?
Mr. WASSENAAR. Currency exchange.

This is a picture of two individuals removing from their trunk cardboard boxes full of currency, about to be delivered to this Sonal organization.

Chairman ST GERMAIN. Excuse me, delivered to the Sonal? That looked like a financial institution that they were parked in front of.

Mr. WASSENAAR. Well, in this particular case, the Sonal Co. had an office right within a bank.

Chairman ST GERMAIN. What bank was that?

Mr. WASSENAAR. I do not have the name of the bank but I could

Chairman ST GERMAIN. Could we flip back to the first slide? No, the other way.

Isn't that the Chasenhook Federal something? Is that Chasenhook?

Mr. WASSENAAR. No, this was in Florida. Chairman ST GERMAIN. Do you have some worthy assistant here who might help you with that question?

Mr. WASSENAAR. Yes, he said it was the Capital Bank.
Chairman ST GERMAIN. Capital Bank?

Mr. WASSENAAR. They had an office right within the Capital Bank in Florida.

Chairman ST GERMAIN. The Capital Bank is spelled c-h-a-s?

Mr. WASSENAAR. Well, this was in a parking lot. The Capital Bank, or at least the branch, was some doors down from this particular-

Chairman ST GERMAIN. Oh, they have a lot of banks in this parking lot?

Mr. WASSENAAR. Yes, it must be similar to Wilshire Boulevard.

Chairman ST GERMAIN. Would you, for the record, submit the exact name of the bank, in case you might be mistaken? Mr. WASSENAAR. I certainly will.

EXACT NAME OF THE BANK IN A SLIDE The name of the bank that received the Sonal, Inc., deposits was the Capital Bank. The picture of a bank in the slide was next door to the Capital Bank building

But anyway, this is a picture of individuals removing cardboard boxes full of currency from their trunk and it is currently being delivered to the Sonal organization.

And this is a picture of what was contained in one of those cardboard boxes, bundles of 20's.

Now bear in mind, again, the Sonal organization could only deposit to its bank $1 million a day. That is all the bank was willing to take from this Sonal organization.

This is another package of a smaller amount of currency that was delivered to the Sonal organization.

And this is yet another means of delivering money to the Sonal organization, in just a brown paper bag. One of the significant aspects of this particular slide is that, if you look closely, on the bag itself is a red delta sign.

Chairman ST GERMAIN. What is in it?

Mr. WASSENAAR. This same red delta sign subsequently showed up in another case where there was a substantial seizure of cocaine. And that cocaine contained that same label, or what we think is a trademark by whatever organization.

Now since Sonal could only deposit $1 million in currency into their bank, and oftentimes they would receive in excess of $1 million in a given day in their organization, they had-at any given time-a substantial surplus within their business. And so on the day that we decided, along with the Customs Service, to execute a search warrant on the Sonal business, we were fortunate to find that they had such a surplus on hand.

And this is a picture taken of the currency that was seized by Customs and the Internal Revenue Service on the Sonal organization. On the table in front of you is roughly $3.2 million in currenсу.

Chairman ST GERMAIN. He was running a handsome surplus.
Mr. WASSENAAR. Indeed it was.

In addition to seizing the $3.2 million in currency, we also seized a cashier's check for approximately $4 million. So the one seizure, on 1 day, in this particular organization involved $7.2 million.

Chairman ST GERMAIN. Of course, you have returned that money; have you not?

Mr. WASSENAAR. I hope we did not. I think in this particular case, because we were able to show that it indeed came from narcotics, the Government would prevail in a forfeiture case.

But again, if the Government were not able to prove that it came from narcotics, theoretically, we may have to return money of that nature. And that, again, I think is the real benefit of Congressman Pickle's bill.

Now we switch over to southern California. This case involved a heroin organization known as the Araujo family. In this picture, if you look real closely, you see two individuals carrying a large cardboard box into that Mexican-American National Bank, which is right across the border.

In this particular case, currency transaction reports were indeed filed by these financial institutions. And the banks involved in this particular case were not knowledgable of it-they were not involved in the criminal act.

The bad guys here were providing false or fictitious information to the bank which caused them to file a false currency transaction report.

Chairman ST GERMAIN. Could we go back to Sonal a minute? You said the bank was taking $1 million a day from Sonal. Was that because it was a money exchange operation?

Mr. WASSENAAR. Right.

Chairman ST GERMAIN. Did Sonal have an exception? Were they on the exempt list for reporting?

Mr. WASSENAAR. I am really not certain. I doubt if they were. I do not think that a currency exchange can be granted an exemption to the filing.

Chairman ST GERMAIN. Could you look that up and reply to that in writing? Mr. WASSENAAR. Sure.

STATUS OF SONAL, INC.
Sonal, Inc., was not on the exempt list at the Capital Bank.

Mr. WASSENAAR. This particular case involved, again, a massive heroin distributing organization primarily throughout southern California and this was one of the means by which they were transporting the currency into a bank. But again, in this particular case, the bank did file a currency transaction report. However, it was a false report.

Next slide.

Here are some of the same individuals, who were involved in that case, physically removing from their automobile more currency. If you can focus that a little bit better, the individual that is removing the paper sack from near the driver's door, if you look real closely you can see the currency sticking out of the top of the bag. And of course, they are also removing-

Chairman ST GERMAIN. Things are tough, they could not afford the right size bag.

Mr. WASSENAAR. That is right. There is also some currency in the trunk of the automobile. In the trunk of the automobile, you have small boxes and it looks like another bag full of currency.

When we decided to move in on this case, this was some of the currency that was seized in this particular case. While we were working this particular case, we were aware—from a very early point in time—that we, indeed, were working on a narcotics organization. The Araujo family was involved not only in the distribution of the narcotics itself, they were also involved in the laundering of the money.

The key here is that this whole investigation was started with a single CTR that we received. It was analyzed and we determined we do not have a taxpayer who files a return by this name. That little bit of suspicion led us on to this massive organization.

We also had enough time in this particular case to, in addition to charging them with money laundering, we also charged them with income tax evasion. We were able to show that in the 3 years that this organization was operating in southern California, they had received $27 million in income and filed no income tax return.

Mr. WYLIE. This was a currency exchange operation, was it not? This was not a bank?

Mr. WASSENAAR. No, these were individuals who were actually selling narcotics and laundering their own funds.

Mr. WYLIE. Oh, they were using their own funds?

Mr. WASSENAAR. Right. In this particular case, we obtained arrest warrants on, I think, 17 individuals and were successful in arresting 12 or 13. The rest fled to Mexico. We were able to seize, out of domestic banks, roughly $12 to $13 million in currency plus the income tax charge showing unreported income of some $27 million over a 3-year period of time, all started with a single CTR that was received by the Internal Revenue Service.

Thank God for the Bank Secrecy Act.

Going back to some charts or posters which perhaps will summarize the testimony we heard earlier this morning from Mr. Friedberg. The chart on the left shows the money obtained from narcotics trafficking, and then it is parceled out to the Smurfs. Those individuals up there are Smurfs. They then run, scurry about from bank to bank converting it into a pile of cashiers checks.

Cashiers checks then can be brought to any one of a number of different banks throughout the country because the deposits of cashiers checks do not generate a CTR form. So once this conversion is made from currency to cashiers checks, the cashiers checks are then deposited into a domestic bank account. No trail of a CTR. No CTR is filed whatsoever.

Of course, once the money is deposited into any one of these banks, like in San Francisco, Los Angeles, Denver, or Omaha, it can then be wire transferred down to Miami, and then from Miami it can be wire transferred to Panama, to Colombia, to Switzerland or a variety of different countries throughout the world.

I think we fairly well covered Smurfing this morning. This is to give, I guess, more of a graphic portrayal of how this Smurfing operation works.

One of the keys in most of these money laundering operations, however, is the use of a foreign bank, a foreign financial institution. You find a good part of the money eventually ending up in a foreign bank, in large part those financial institutions located in one of the tax haven countries, countries primarily in the Caribbean, Panama, Grand Caymans, Bahamas, et cetera.

Now, the use of tax havens, however, is not limited to just money launderers. What we are finding with an increase in activity is the use of foreign tax havens to also assist in the fraud generated by illegal tax shelters, and with your permission, I would like to spend just a little bit of time in that area.

At the present time, we have over 400 investigations in process involving illegal tax shelters. In over 50 percent of those investigations, we have tax shelters which have some connection, some transaction involving a tax haven bank—we think intentionally structured in that manner so that it makes it more difficult for us to get behind the true nature of the alleged transaction.

Let me give you an example. We currently have an investigation that, although it is current, I think I can make some reference to because there have been a number of public records brought on it as a result of search warrants executed some time ago. This tax shelter organization is called the USTPS, U.S. Tax Planning Service, headquartered primarily out of the Grand Caymans, structured

« iepriekšējāTurpināt »