at eight or nine banks in the Miami area. Mr. Behar also provided me with certain names to use on a random basis as payees on the cashier's checks or told me to make up any

"Latin-sounding" names to use as payees on the checks. I also used fictitious "remitter" names on cashier's checks application forms used by the various Miami banks. Initially, I was unaware of any law requiring the filing of a Currency Transaction Report by the banks I visited or that I was being used by Mr. Behar to avoid the CTR requirements. By April, 1984, I was receiving approximately $50,000 a week from Mr. Behar and purchasing cashier's checks and money orders in amounts under $10,000 at various Miami banks as instructed by Mr. Behar. I was not suspicious of this activity becuase Mr. Behar had explained to me that he did money exchanges as part of his business and I knew of nothing illegal in making these check purchases.

In May, 1984, Mr. Behar instructed me and another

individual, known to me as "Pepe", to go to California to pick up $200,000 in cash from someone named "Hecho" and exchange that money for cashier's checks in the Los Angeles area. Pepe and I traveled to Los Angeles and contacted "Hecho" using a telephone beeper number provided by Mr. Behar. Pepe and I then met with "Hecho" at a residence in Palos Verde, California where we picked up $200,000 in U.S. currency. My curiosity was particularly aroused by this money pick-up in that the palacial residence occupied by "Hecho" was furnished only with mattresses on the floor and bed sheets covering the windows. Also, "Hecho" gave us

this $200,000 without question or conversation on what was to be done with the money. Pepe and I took this money and went from bank to bank on Wilshire Boulevard in Los Angeles and purchased cashier's checks in amounts less than $10,000. We then returned to Miami and gave the checks to Mr. Behar.

Upon my return, I happened to read an article in a Miami newspaper which explained money laundering and how it was accomplished through multiple cashier's check purchases in amounts less than $10,000. I immediately knew that I had been an unknowing participant in this type of money laundering activity. That same day, I contacted agents of the Federal Bureau Investigation to inform them of this activity and thereafter met with agents of the Interal Revenue Service to detail this activity. At their request and after consultation with the United States Attorney's Office in Miami, I agreed to continue working for Mr. Behar on an undercover basis to facilitate a federal investigation. Thereafter I continued my check purchasing activity to Mr. Behar and his associates and reported my activities on a near daily basis to the federal agents.

In mid-May, 1985, Mr. Behar returned from Colombia and began to expand his money laundering business. For the next several months, I received amounts of up to $100,000 on a daily basis to convert into cashier's checks or money orders in amounts under $10,000. At some points, I began purchasing more money orders using the same multiple-bank procedures because money orders required no payee names. During this period, I became better acquainted with Mr. Behar's operation and the persons

involved in that operation.

I learned from Mr. Behar that his

money suppliers in the United States were referred to him by I also became acquainted with persons

"Alex" in Colombia. supplying money to Mr. Behar in the U.S. and personally picked up large sums of money from these persons. Ordinarily, this money was in small bill denominations ranging from five to one hundred dollars. Mr. Behar never commented on the source of this

currency other than to jokingly say that the five and ten dollar bills were "marijuana money" and the larger bills were "cocaine money". This money would be delivered in large amounts to Mr. Behar's place of business inside duffle bags and other type of containers. Typically, Mr. Behar would give me $50,000 $100,000 at a time which I would count, bundle and take to various banks to buy cashier's checks and money orders. I usually delivered these instruments to Mr. Behar in the afternoon and then assisted Mr. Behar in counting cash delivered to him that day. Mr. Behar wanted me to turn in no carbon copies or other records of the instruments I purchased. Mr. Behar had several other persons working for him in the same capacity as myself.

Throughout this period, I learned that Mr. Behar did three things with the checks and money orders we purchased. Most of these checks were picked up by courier from Mr. Behar's place of business and flown out of the United States by commercial airlines. Other checks were returned to the money suppliers in Miami and still other were deposited (with forged endorsements) into accounts at local banking institutions. I personally

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assisted in this distribution by driving couriers to the airport and by making deposits with Mr. Behar at various Miami banks.

In February, 1985, Mr. Behar and his associates were

arrested and indicted on federal charges in Miami. I understand that Mr. Behar and several of his associates subsequently plead guilty to certain of these charges.

The Honorable Fernand J. St. Germain, Chairman
Subcommittee on Financial Institutions Supervision,

On April 16, 1986, I was honored to appear before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance to respond to inquiries of certain members of your Subcommittee relating to the mechanics of money laundering in the Miami area. During the course of the hearing, I was asked to respond in writing to the following questions:

(1) Why did certain banks in the Miami area increase the maximum amount for which money orders could be purchased from $2,000 to $10,000; and

(2)

What "float" period do banks experience between the time of purchase of a cashier's check or money order and the date the bank is actually charged for these financial instruments (assuming they are purchased for international money laundering purposes)?

To answer these questions, I have consulted with Special Agent Allen B. Chase, an experienced criminal investigator with the Internal Revenue Service, who has made appropriate inquiry from banking personnel in the Miami area. Special Agent Chase has advised me that Amerifirst Federal Savings and Loan has increased the maximum amount for which a money order can be purchase to $10,000 in order to encourage the purchase of money orders over cashier's checks issued by that financial institution. Money orders are sold by Amerifirst but issued by the American Express Company which is ultimately responsible for these instruments should they be lost or stolen. By selling money orders in amounts up to $10,000, Amerifirst is able to avoid potential liability which previously required banks to experience paper work and the expense of indemnification bonds.