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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. WORTLEY. As opposed to you? You were kind of a commission merchant, is that right?
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. 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 delightful.
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 a 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?
In my opinion, yes; it would facilitate it. Chairman ST GERMAIN. Why didn't anyone from the U.S. Attorney's Office ask that question of the banks?
Mr. BANDSTRA. I don't know that it wasn't asked. I just don't know that it was.
Chairman ST GERMAIN. Could you find out for us?
Chairman ST GERMAIN. Could you for the record submit a statement as to what the replies were from the banks that increased the denominations of their money orders?
Mr. BANDSTRA. I would be pleased to, Mr. Chairman.
Chairman ST GERMAIN. Could you also ask what the float has been in these banks, even though they are innocent, having profited from the floats?
Mr. BANDSTRA. I will do my best to find out the answers.
[In response to the request of Chairman St Germain, the information was submitted for the record by Mr. Bandstra and can be found in the appendix.]
Chairman ST GERMAIN. Thank you. Mr. Parris.
Mr. PARRIS. Mr. Friedberg, have you been a Florida resident for some time?
Mr. FRIEDBERG. Since 1972, sir.
Mr. FRIEDBERG. Yes, sir.
Mr. FRIEDBERG. Because I had to sell my home-I did own a condominium in Florida, which I sold. I did have some savings which I live on. It is very difficult to account for the 2 years of my time that I was involved with the Government, year and a half with the Government. During the past year, with all the pre-trials and trials and having to be in various places, it is very difficult to get a permanent position.
Mr. PARRIS. You had expenses of your own in all of that; did you not?
Mr. FRIEDBERG. I paid all expenses. I have received nothing from the Government for the past year.
Mr. PARRIS. You paid all of that?
Mr. FRIEDBERG. The last thing the Government did was transfer me to another State, which I now live in. I am not under any witness protection program, which is my choice.
Mr. PARRIS. Where do you get money from now to pay rent and buy groceries?
Mr. FRIEDBERG. I have gone through a very substantial part of my savings.
Mr. PARRIS. You flew up here for this hearing, I gather.
Mr. FRIEDBERG. Yes, sir.
Chairman ST GERMAIN. The Chairman would state that the committee is going to reimburse Mr. Friedberg, as we do for other witnesses.
Mr. PARRIS. That is very gracious of us, Mr. Chairman. [Laughter.
Chairman ST GERMAIN. We even send Congressmen on trips and the committee pays for it.
Mr. PARRIS. I have heard of some of those. I have never been on one myself. I understand that is the case.
Chairman ST GERMAIN. This chairman has been on three in 26 years.
Mr. PARRIS. Let me ask you a serious question. I do not mean to invade your privacy, Mr. Friedberg. You are to be commended for what you have done in the interest of justice and the prosecution of criminal activity, as the chairman and others have alluded to. I was intrigued by the fact that it is impossible to believe that people would not pursue where you came from with this cash. I just find that incredible.
Has any institution or employee ever turned you down when you walked in and said, here's my usual $9,000?
Mr. FRIEDBERG. Never.
Chairman ST GERMAIN. Mr. Bandstra, let me ask you a question. You are a teller in a bank. Mr. Friedberg comes in four or five times a month with $9,000 that he converts to cashier's checks or money orders. Would that not ring a bell with you?
Mr. BANDSTRA. In Miami, I don't think it would ring a bell. Not only because Miami is such a drug center in the United States, but there is, as I believe Mr. McKinney was saying, a great deal of the business done in Miami is done with cash. It is not at all unusual particularly to have foreign individuals in the United States with large amounts of cash. They have come into Miami from other places. They have come often times with their life savings. For some reason, they have a lot of cash.
Chairman ST GERMAIN. Does Mr. Friedberg look and sound foreign to you? Mr. BANDSTRA. No; he would not.
Chairman ST GERMAIN. I repeat my question. Mr. Friedberg is coming in three to five times a month and converting $9,000. No. 1, you look at him, you look at his watch, and you look at his clothes. Does he look like a man that has hundreds of thousands of dollars?
What American operates with that kind of cash?
Mr. BANDSTRA. Other than persons self-employed on a small basis, and even then, it would be unusual.
Chairman ST GERMAIN. If they are self-employed on a small basis, there are exceptions, granted, by the regulatory agencies, and by IRS. You have a car wash. You have a race track. You have a cleaning business where most of it is done in cash. That's one thing.