And guess what language you hear out at the swimming pool? Mr. FRIEDBERG. Absolutely.

Mr. MCKINNEY. OK. You are walking on dangerous territory, but Florida is the land of cash, and I don't know how you guys are going to do it but somehow or other, we have to do something about no-name instruments-cashier's checks and cash. It sounds ridiculous to say you are going to be hard put to use the Nation's currency, but that is really what we are talking about, because cars are paid for in cash, condominiums are paid for in cash, and then they turn around and sell those things. It is a go-go market. You can sell for 5 or 10 percent more than you even paid.

Let me ask you a question. This is a very personal question. You are in Los Angeles and a guy hands you $200,000. Now, where I come from that is a heck of a lot of money.

Did you ever get the urge to just take a walk?

Mr. FRIEDBERG. If the thought came to my mind, it didn't linger there too long.

Mr. MCKINNEY. OK. Now, in other words, you sort of feel something might happen to you if you did take a walk. What did you think would happen to you? Did you think Mr. Bandstra and the Feds, or the locals would come after you, or did you think someone on a dark night might just end it all?

Mr. FRIEDBERG. Well, here again having a family who lived in Miami, and it is someone else's money, whether I considered him a gangster or racketeer, I would have to feel that he would be a little upset if I walked away with $200,000 of his money.

So, therefore, the thought never lingered that long.

Mr. MCKINNEY. Yeah, but I mean gee, what a temptation. Two hundred thousand cash, and nobody is going to follow you like the Feds would try to follow you to Argentina or any of those places. I mean, you can just take a walk. I suppose, Mr. Chairman, if you steal the money, you really don't care that much.

Chairman ST GERMAIN. Yeah, but he probably has a wife and children and so forth. Leave them behind?

Mr. MCKINNEY. That is what I wanted to really get across was, you know, this is a lot of cash, and people are just sort

Mr. FRIEDBERG. If I didn't like my wife it would have been a great opportunity.

Mr. MCKINNEY. You know, nobody knows better than Mr. Friedberg or Mr. Bandstra, that all one has to do is read the Miami News on a daily basis, and a lot of people bite the dust for a lot of reasons, including, unfortunately, our poor FBI agents recently.

You know, it is a real problem, but it is the heart of the drug business. Without money laundering, the drug business isn't worth the time, the effort, or the danger, but with money laundering it is worth so much that the people don't give a darn any more.

If you lose $1 million Hatteras yacht, so what? You made $6 million on the sale. You launder it. I really appreciate your testimony, and I appreciate your forthcoming responses.

Let me ask you another inner question. When you look in the mirror in the morning, and you looked at that, and you knew how many people were working in your little outfit with no guards at the door, with cash lying all over the place, wasn't there a lot of that going on in your mind?

Mr. FRIEDBERG. I could not believe myself how much was going on. Once you get into the inner workings of it, one of the exercises, you would be going into a bank and you would be waiting in line, and you see familiar faces, and you think it is somebody you know, and then you realize it is the same Smurf that you have seen in the previous bank.

Mr. MCKINNEY. He was laundering $9,000 too?

Mr. FRIEDBERG. You are running a route. That is what it amounts to. I think you might enjoy how it was done. I would take home $100,000, and when I would get home I would put it out on my dining room table and break it down into $9,000 packages.

Mr. MCKINNEY. You mean your wife could sit still and watch $100,000.

Mr. FRIEDBERG. No. My wife cried.

Mr. MCKINNEY. My wife would go certifiably insane, instantaneously.

Mr. WYLIE. Would the gentleman yield?

Mr. MCKINNEY. Yes.

Mr. WYLIE. You have a lot of income for a short period of time here, and now don't have it. Where are you employed now?

Mr. FRIEDBERG. I am not, sir.

Mr. WYLIE. You are out of work?

Mr. FRIEDBERG. Yes, sir.

Mr. WYLIE. And you are not earning a livelihood?

Mr. FRIEDBERG. No, sir.

Mr. WYLIE. OK, thank you.

Mr. MCKINNEY. My time has expired, but if you want to keep up. You just took the money home and threw it on the dining room table.

Mr. FRIEDBERG. We broke it down into $9,000 packages, and then I would make a list of the banks I was going to call on the following day, and you had bags-bank bags, these plastic bags, and you put the money in there and put it all in an attache case, and contrary to what they show on television, at attache case does not hold $1 million; it holds about $120,000 in 20's.

Mr. MCKINNEY. Mr. Chairman, you have to be heroic to be a Federal employee in a land like southern Florida, and I congratulate the Fed's informant, and I congratulate the assistant U.S. attorney.

Chairman ST GERMAIN. You said your wife would cry when she saw you counting the money into the packets?

Mr. FRIEDBERG. She just couldn't believe the kind of money that would just come in every day, and she would walk out of the room. She didn't want to even sit there and watch.

Chairman ST GERMAIN. Did she know after June that you

were

Mr. FRIEDBERG. Oh, absolutely. I told her immediately.
Chairman ST GERMAIN. Mr. Wortley.

Mr. WORTLEY. Thanks, Mr. Chairman. Mr. Friedberg, the principal bank that you used for laundering operations, how long had you had an account in there when you first started laundering?

Mr. FRIEDBERG. The very first check I made was on my own bank account, and it was in the form of a personal check which Mr. Behar had asked me for, and it was in the amount of $5,000, and I

had been banking-that was Pan American Bank, and I banked there from 1973 through 1984, when I went to work for Mr. Behar. Mr. WORTLEY. Did you usually bank with the same tellers in there, or was there a lot of turnover?

Mr. FRIEDBERG. As banks are, you know you do get turnovers. However, there were some regular tellers which I saw the entire year.

Mr. WORTLEY. Were there some bank officers that you regularly knew? Did you ever need accommodations at the bank? Buy a car, or take a short term note?

Mr. FRIEDBERG. With Pan American I did. I had some loans with Pan American Bank.

Mr. WORTLEY. So, you did have a relationship with the officer or the manager of the bank?

Mr. FRIEDBERG. That is correct.

Mr. WORTLEY. Now, when you started playing this money laundering game, was there ever any comment between you and the manager at all?

Mr. FRIEDBERG. No, sir.

Mr. WORTLEY. Do you think the manager was aware that you were playing games?

Mr. FRIEDBERG. I would have to believe that when you see me once a week in your bank, always with cash and always in the amount of $9,000, even if you don't personally see the transaction, that the teller has to report you. Here comes that guy again with the $9,000.

The only complaint the teller ever had was the time that you took for them to count the money.

Mr. WORTLEY. The other Smurfs that seemed to operate out of the same headquarters, were they casual people involved in this thing, or do you think they were part of the organized crime operation?

Mr. FRIEDBERG. I think they were Mr. Behar's employees. I can't describe their status other than that.

Mr. WORTLEY. You think they were regular employees?

Mr. FRIEDBERG. Yes, sir, they were.

Mr. WORTLEY. As opposed to you? You were kind of a commission merchant, is that right?

Mr. FRIEDBERG. Everybody was on commission.

Mr. WORTLEY. Everybody was.

Mr. FRIEDBERG. Everybody was on commission.

Mr. WORTLEY. How many Smurfs do you think were operating in southern Florida?

Mr. FRIEDBERG. I couldn't even give you a figure. Just with Mr. Behar's small organization. Again, there isn't a day when you wouldn't go into a bank where you wouldn't see a familiar face, someone who you saw on a regular basis in a bank some other time, and he was doing the same thing which you were. Or she

was.

I recall when I was working for the Government, there were two ladies in a particular bank, and I was watching them. They had two separate windows, and both were cash, and I called up the agents, and we just missed them at the bank, but we did get their

license plate number, but each one had brought checks in the amount of $9,000.

And then I saw them one-half hour later leaving another bank. Mr. WORTLEY. Now, let's move to the next stage. You said from time to time you would see at Mr. Behar's—an individual who was going to travel off shore someplace.

Mr. FRIEDBERG. Yes, sir.

Mr. WORTLEY. Would these tend to be the same people who would be coming in from time to time?

Mr. FRIEDBERG. Not necessarily.
Mr. WORTLEY. Not necessarily?

Mr. FRIEDBERG. Not necessarily.

Mr. WORTLEY. But in some cases they were the same people. Mr. FRIEDBERG. Yes; he had some-same man who came in on two or three occasions.

Mr. WORTLEY. Do you think they worked on the same commission basis you did, didn't you ever have a chance to compare notes? Mr. FRIEDBERG. I had no idea. Never spoke with them, they didn't speak English, and it was merely a situation where they would come into the office and either leave, or Mr. Behar would say, can you give him a lift to the airport or can you drop him off at a motel or hotel somewhere.

Mr. WORTLEY. How big a package of cashiers checks would they walk around with?

Something that they would put in their pocket?

Mr. FRIEDBERG. You could put it in your inside jacket pocket in the amount of $300,000 or $400,000 without any problem.

Mr. WORTLEY. All right. Did you ever wonder how that money recycled, and did you ever have any indication of what ultimately happened to it? You knew it went off shore, went to another bank. Did Mr. Behar ever talk about the money he was recycling back into the system? He bought property, he bought stocks and bonds? Mr. FRIEDBERG. Mr. Behar never discussed it, sir. In fact, he kept pretty much to himself. Subsequently, I think the Government has found out the route some of the money had taken, but as far as Mr. Behar telling you what happened to the money, he was silent on that.

Mr. WORTLEY. Mr. Bandstra, can you tell us what you know about the cycling of the money?

Mr. BANDSTRA. Mr. Wortley, only to know that certain of these checks-the route of these checks was traced to banks outside the United States. Banks in Panama.

Beyond that, I can't comment. And I might also add, Mr. Wortley, that in this case, in a usual case, there is not a lot of discussion about the drug connection relating to this money that is being laundered.

In fact, most persons who were laundering money would probably deny that they are in any way involved with the narcotics trade. And that was certainly the case in this case.

Mr. Behar today would not say, and I have talked with him myself, would not say that he was in any way knowledgeable that this was drug money.

Mr. WORTLEY. Where did the money come from? Was it numbers' money? It had to come from some place.

Mr. BANDSTRA. When I asked him that, he would be that he didn't know, he didn't ask, he didn't care.

Mr. FRIEDBERG. If I might add, Mr. Behar was a resident of a very luxurious condominium, of which I was the manager. Mr. Behar's apartment was in the neighborhood of $350,000. A gentleman from Colombia had made application to purchase an apartment in the building. Mr. Behar was one of the first to object on the grounds that he thinks the man is a drug dealer. [Laughter.] Mr. WORTLEY. My time has expired. Thank you very much. Chairman ST GERMAIN. When you counted these packets out, what were the denominations?

Mr. FRIEDBERG. They would range anywhere from $5 to $100 bills. In most cases, they were $20 bills.

Chairman ST GERMAIN. These tellers you dealt with once a week, with $9,000, and the next one doing the same, do they believe in the Tooth Fairy, the Easter Bunny and Santa Claus?

Mr. FRIEDBERG. Religiously.

Chairman ST GERMAIN. They must have. Let's be honest. When you went to this teller for the third time in a month, you must have said to yourself, this is a real crazy, not to ask me where all this cash is coming from. Either their IQ's are about 75 or they are purposely looking the other way.

Mr. FRIEDBERG. I would have to believe that, sir.

Chairman ST GERMAIN. Wouldn't you assume that they would say to the manager: "Hey, this character is coming in here three to five times a month with $9,000 on the button, he must be doing something wrong, otherwise, why would he keep it at $9,000?"

The thought occurs to me that you probably gave us the answer-they were playing the float. They thought it was delight

ful.

Mr. Bandstra, what is your reaction?

Mr. BANDSTRA. Mr. Chairman, I might add, just because I have had conversations with agents of the Internal Revenue Service relating to this, who are most familiar with the filing of CTR's, that there are banks in the Miami area and perhaps more so of late, that are concerned with these large amounts of money coming in. I would imagine it would be the response of a bank teller that it is not their business and they have no obligation to file a report, if it is less than $10,000, so they don't ask. However, I do know there are banks that make it a regular practice of filing CTR's and getting the information required for a CTR, even if it is less than $10,000.

I don't think it is quite fair to paint a picture here that all the banks are simply looking the other way or on the take somehow. Chairman ST GERMAIN. Mr. Friedberg stated that after a period of time, the banks increased the amount of money orders that you could buy. Did anyone from your office query these banks as to why they made this decision to increase the amount of money order?

Mr. BANDSTRA. Not to my knowledge.

Chairman ST GERMAIN. You don't think that would be a rather important question to ask them? Doesn't this facilitate the operation for the money launderers and doesn't this increase the profit to the banks?