Mr. FRIEDBERG. I can sympathize with the situation, Mr. Annunzio. Having lived it, I understand it. Mr. ANNUNZIO. You can sympathize with a Member of the committee. How do you write legislation? You have lawyers on malpractice with doctors. You have lawyers on malpractice with lawyers. You have liability insurance. If you sneeze with some people, they are in court with a civil rights suit. It is a tough problem. My time is up. Thank you, Mr. Chairman. Chairman ST GERMAIN. Mr. Friedberg, the picture to the left with the piles of money, does that look familiar to you? Mr. FRIEDBERG. It looks like Mr. Behar's warehouse on a Monday afternoon. Chairman ST GERMAIN. Would you describe that to us? I think we need more testimony from you and Mr. Bandstra in order to help the Members. Mr. FRIEDBERG. Yes, sir. Mr. Behar started out on a small scale. He had one or two people that he was handling their cash for. He was dealing with a Colombian by the name of Alex and Alex was making contacts here in Miami and sending these people to Mr. Behar. After Mr. Behar's May visit to Colombia, his business increased tremendously and he picked up a number of other clients. Money would come in to Mr. Behar's warehouse at 2 or 3 o'clock in the afternoon in duffel bags, suitcases and that is a typical picture. This money would be placed in one of the back offices and Mr. Behar and his employees and his wife would sit and count this money and put it in $10,000 packets so it would make it easier to count. On an average afternoon, you would have in excess of $400,000 to $500,000. When Mr. Pickle mentioned that $90 billion figure and $50 billion, I was not surprised. On an average day while working for the Government, it was not inconceivable for me to handle $100,000 per day in laundering and that is a half a million dollars and I was just one little guy in Miami just doing that. Chairman ST GERMAIN. Tell me. In this warehouse, he was an export/importer? Mr. FRIEDBERG. Yes, sir. Chairman ST GERMAIN. Did you have any duffel bags of coffee coming in? Mr. FRIEDBERG. Nothing, sir. Chairman ST GERMAIN. No coffee. Mr. FRIEDBERG. Nothing. Chairman ST GERMAIN. No Colombian coffee? Mr. FRIEDBERG. No. Chairman ST GERMAIN. Juan wasn't there? Mr. FRIEDBERG. No, none at all. In fact, not seeing the denominations we would get money in various denominations and when we would get a load in of small bills, 5's or 10's, it would be referred to as marijuana money and the 20's and 50's and 100's was called cocaine money. Chairman ST GERMAIN. Was that before or after your trip to California? Mr. FRIEDBERG. After. This was after Mr. Behar made his contacts in Colombia in June. I started working for the Government in June. Chairman ST GERMAIN. Just a quick question to Mr. Bandstra, and then we will go to Mr. Wylie. We have met Mr. Friedberg and thanks to your cooperation, he is able to speak to us today, even though he has other cases he may be testifying in. How many Mr. Friedberg's were working with Mr. Behar? Mr. BANDSTRA. Mr. Chairman, Mr. Friedberg was one of approximately 6 to 8 persons that we have identified, persons which subsequently were indicted, some of those cases have been completed and others are still pending. But Mr. Behar had approximately 6 to 8 persons doing exactly what Mr. Friedberg was doing on a daily basis. Chairman ST GERMAIN. So Mr. Friedberg was doing about $100,000 per day; correct? Mr. FRIEDBERG. Yes, sir. Chairman ST GERMAIN. Were these other people handling that amount of money, approximately the same amount of money? Mr. BANDSTRA. To the best of my understanding, it is. Mr. Friedberg, of course, was with them. He met them and he dealt with them. I believe that is correct. Chairman ST GERMAIN. Mr. Friedberg. Mr. FRIEDBERG. Yes, sir. Chairman ST GERMAIN. So that if there are six of you working on any given day, we are talking about $600,000? Mr. FRIEDBERG. It is entirely possible, sir. Mr. BANDSTRA. Mr. Chairman, I think it might be helpful also for the committee to know what was done with the checks once they were purchased if Mr. Friedberg could address that question. Chairman ST GERMAIN. Oh, great. Mr. FRIEDBERG. We were always to bring the checks back after the close of banks on that day. For example, if I took $125,000 and I laundered $100,000 I would turn in $100,000 to Mr. Behar and he would tally out, so-to-speak, and he would collect all these checks and they would fit into a regular legal size envelope. On many occasions he had people coming to his office who were leaving for Colombia or Panama that afternoon and on a number of occasions, I personally drove them to the airport or they would be turned over to any of Mr. Behar's employees, myself included, for deposit in bank accounts in the Miami area the following day when we would continue with laundering of money on the next day. Then Mr. Behar would keep certain checks and turn them over to individuals who gave them to him. I recall Mr. Behar sitting at his desk and endorsing these checks, looking at the name on the front and then forging the name on the back, Mr. Gonzalez or Mr. Gomez or whatever, and then putting them in an envelope. It got to a point where one of the very large banking institutions in Miami was selling money orders up to $10,000 and we were buying $9,000 money orders and they loved these because there were no dates on them and you did not need a remitter's name or a purchaser's name. Chairman ST GERMAIN. Are you telling us that the bank increased the amount of the money order that you could purchase? Mr. FRIEDBERG. Yes, sir. Originally, I remember that they were $2,000. They went to $5,000 and AmeriFirst banks of Miami now sell money orders up to $10,000. Chairman ST GERMAIN. What bank was that? Chairman ST GERMAIN. They must like this laundering business. Mr. FRIEDBERG. The turnaround time from what I gather when some of these checks were subpoenaed, the turnaround time could be as high as 60 to 90 days and they get $5 for purchasing the money order and then 60 or 90 days turnaround time from the time they sell it until the time they have to pay on it. Chairman ST GERMAIN. Mr. Wylie. Mr. WYLIE. Let me say, Mr. Friedberg, that you are a very unusual witness. It looks like you are in the position to help us get some information that this committee needs. Mr. Bandstra, is Mr. Friedberg giving us good information? Mr. BANDSTRA. Yes, Mr. Wylie. Everything that Mr. Friedberg is telling you has been corroborated by agents of both the Internal Revenue Service and the Customs Service. As Mr. Friedberg said, at one point he came to Federal agencies-first the FBI and then the Customs Service and reported back-after that point reported back to Federal agencies on a daily basis. The copies of many of the cashier's checks and money orders which were purchased were turned in and are now evidence and have been evidence in cases that have been presented already in the southern district of Florida. I would only like to clarify one thing, and that is that Mr. Friedberg said he began working for the United States laundering money. I think it is clear to the committee that he was not laundering money for the U.S. Government. Mr. WYLIE. I would hope not. [Laughter.] Mr. WYLIE. You were employed by Mr. Behar? Mr. FRIEDBERG. Yes, sir. Mr. WYLIE. How were you paid? Mr. FRIEDBERG. Mr. Behar, starting in June-just at the same time I started working for the Government-started to pay 1 percent commission. It was my understanding Mr. Behar was collecting 4 percent on the money and paying 1 percent. Mr. WYLIE. So if you-how much money could you launder in a day? Mr. FRIEDBERG. $100,000 a day. Mr. WYLIE. $100,000. Mr. FRIEDBERG. Yes, sir. Mr. WYLIE. And you got 1 percent of that as your fee? Mr. FRIEDBERG. That is correct. Less expenses, of course. Mr. WYLIE. Less expenses. You had to take care of them out of your own pocket? Mr. FRIEDBERG. Correct. Mr. WYLIE. Where is Mr. Behar now? Mr. FRIEDBERG. It is my understanding that Mr. Behar has been sentenced. I do not know if Mr. Behar is presently- Mr. BANDSTRA. Mr. Wylie, Mr. Behar was indicted in four separate indictments in the southern district of Florida because he was involved in four separate conspiracies. He has plead guilty in each of those cases and has now been sentenced by all four Federal district court judges. And it was my understanding that he either was to report to the Federal Bureau of Prisons this week or next week. Mr. WYLIE. What was he charged with? Mr. BANDSTRA. He was charged with conspiracy to defraud an agency of the United States, the Internal Revenue Service. Mr. WYLIE. Tax evasion? Mr. BANDSTRA. It was not tax evasion. He has a problem with the Internal Revenue Service that has not yet been worked out. But he was actually charged with a violation of title 18, conspiracy to defraud an agency of the United States. Mr. WYLIE. Is it usual for a Smurf to take the money and run or are Smurfs part of an organized crime effort? Just how does the Smurf get into this kind of operation? I understand how you got into it. Mr. FRIEDBERG. First, I found it was very unusual for an American to be involved in it. Again, my only contact in the Miami area, most of them were Latin, Colombians. And to let an American handle their money was unheard of. Most of the Colombians I had come in contact with, through working, nobody ever ran. They could probably make more money on a Smurfing basis than just taking whatever they were given. Also, I was given larger sums of money than the average Smurf would take in a day, I would imagine. Except for Mr. Behar's close associates, most of them that I have met will tell you they get $50,000 or $60,000 a day. And that's 5 days work or 2 weeks work, I would say. They would be better off keeping Smurfing than run with the $50,000 or $60,000. Mr. WYLIE. So they are usually a part of an organized crime effort, Mr. Bandstra? Mr. BANDSTRA. In the sense that this is very much an organization. I think it is also clear, from Mr Friedberg's testimony, they were talking about individuals who are at various levels in a money laundering organization. There is a person at the top, who in this case was identified as "Alex," who was in Colombia and who presumably has contacts in Columbia with persons who are either directly supplying cocaine into the United States or is somehow involved with the supply of that cocaine into the United States. Then there are persons in the United States, such as Mr. Behar, who might be considered as money exchangers for a drug smuggler in Colombia. Mr. Behar was one of the persons that Mr. Friedberg worked for. He also had contacts with other such money exchangers who were also indicted in the southern district. On the bottom level of this three-tiered money laundering scheme would be the Smurf, the person who is referred to as a Smurf, and those are the persons actually running to the banks to do these deliveries. The whole purpose, of course, is to get the money usually outside the United States. There are times when money is deposited in the United States, or investments are made in the United States, but ordinarily this money is taken in the form of these negotiable instruments outside the United States. Mr. WYLIE. Did these institutions ever ask you for any identification? Mr. FRIEDBERG. In Miami, yes, sir. In California, no, sir. Mr. FRIEDBERG. Not at all, sir. Mr. WYLIE. Did they ever ask where you got that much money? Mr. FRIEDBERG. No, sir; the only problem I ran into in California was this was 1984. It was in May 1984, just prior to the Olympics, and the only concern one bank showed was that there was possibly counterfeit money there. So the entire $9,000 was put through a counterfeit checking machine. That was the only problem we ran into. It slowed me down for about 25 minutes. Mr. WYLIE. Thank you, Mr. Friedberg. Chairman ST GERMAIN. Laundering $100,000 a day, you must have had to run. Mr. FRIEDBERG. I gained weight since I stopped, sir. Mr. Barnard is quite a runner. If you have noticed, he is nice and slim. He runs every day. Mr. BARNARD. I never made that much money running, though, Mr. Friedberg. Mr. Friedberg, were your instructions very general, that you just were supposed to go to banks, or did you have-were you instructed to take advantage of money exchanges or any other type of operation? Mr. FRIEDBERG. No, sir; strictly banks. Mr. BARNARD. Strictly banks. Did any of your transactions take the form of buying travelers checks? Mr. FRIEDBERG. No, sir. Mr. BARNARD. Only cashier's checks? Mr. FRIEDBERG. Cashier's checks or money orders. Mr. BARNARD. I see. And as you said, as you listed the various banks in California with only Florida identification, you never confronted any question about your purchasing of cashier's checks? Mr. FRIEDBERG. None whatsoever. The entire $200,000 was accomplished in a day and a half. Just for the record, neither one of us-Mr. Yuribi, who was with me, and whose command of the english language is very poor-we had no idea where we were. Part of the story, I think, is very interesting. We landed at the airport and we leased a car and it was at night. We were pulling out of the airport and at the car leasing agency, we asked where are there a lot of banks. He said, "What do you mean?" I said what neighborhood, a nice neighborhood where there are just banks. So he said, "Why do you not try Wilshire Boulevard." Now you have to remember we have no idea where we are. We are two Floridians, this is about 9 or 10 at night. We are in a strange town on the other side of the country, and we drove to Wilshire Boulevard. We found a motel. This was on a Saturday. We checked into the motel. Chairman ST GERMAIN. What name did you use on the car or the motel? Mr. FRIEDBERG. Our name, sir. |