THE SUCCESS OF OPERATION GREENBACK, AMONG OTHER CONSIDERATIONS, LED TO THE ESTABLISHMENT OF THE ORGANIZED CRIME DRUG ENFORCEMENT TASK FORCES THROUGHOUT THE COUNTRY. THESE MULTIAGENCY

NARCOTICS/FINANCIAL TASK FORCES INVOLVE SPECIAL AGENTS AND SUPPORT PERSONNEL FROM CUSTOMS, INTERNAL REVENUE SERVICE, BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DRUG ENFORCMEENT ADMINISTRATION, FEDERAL BUREAU OF INVESTIGATION, U.S. MARSHAL SERVICE AND

ATTORNEYS FROM THE JUSTICE DEPARTMENT.

CUSTOMS AND INTERNAL REVENUE SERVICE PARTICIPATION IS

INTENDED TO CONCENTRATE ON THE FINANCIAL ASPECTS OF NARCOTICS

TRAFFICKING ORGANIZATIONS.

A TOTAL OF 200 CUSTOMS POSITIONS HAVE BEEN ALLOCATED TO THE TASK FORCES. THESE CONSIST PRIMARILY OF SPECIAL AGENTS AND INTELLIGENCE ANALYSTS, WHO ARE ASSIGNED TO THE 13 CORE, 15 MAJOR NON-CORE AND 10 OTHER CITY TASK FORCES.

SINCE THE INCEPTION OF OCDE IN FEBRUARY 1983, CUSTOMS HAS PARTICIPATED IN TASK FORCE INVESTIGATIONS RESULTING IN 656 INDICTMENTS, 380 ARRESTS, 137 CONVICTIONS, THE SEIZURES OF $6.3 MILLION IN CASH, $16.8 IN PROPERTY, 1,106 KILOS OF COCAINE, 29 KILOS OF HEROIN AND OVER 58,700 KILOS OF MARIJUANA.

THESE SUCCESSES HAVE FRUSTRATED THE EFFORTS OF MONEY

LAUNDERERS AND CAUSED THEM TO ALTER THEIR PROCEDURES.

FOR EXAMPLE, AS A RESULT OF THE OPERATION GREENBACK SEIZURE OF APPROXIMATELY $5,447,949 IN CASH OUTBOUND TO PANAMA AND OTHER

SUCH LARGE CASH SEIZURES, SOME MONEY LAUNDERING GROUPS SWITCHED

FROM BULK CASH TRANSPORTATIONS TO NEGOTIABLE BANK CHECK
TRANSPORTATIONS.

USING A TECHNIQUE DUBBED "SMURFING", THE MONEY LAUNDERS WOULD CONVERT THE BULK CASH TO CASHIER'S OR BANK CHECKS IN FALSE OR NOMINEE NAMES IN AMOUNTS UNDER $10,000 AND THEN TRANSPORT THE CHECKS OUT OF THE UNITED STATES. THE SMURFING TECHNIQUE WAS DEVELOPED SPECIFICALLY TO CIRCUMVENT THE BANK SECRECY ACT REPORTING REQUIREMENTS. IN RESPONSE TO THIS AND OTHER MONEY LAUNDERING INNOVATIONS, THE TREASURY DEPARTMENT

IS IN THE PROCESS OF AMENDING THE SUPPLEMENTARY REGULATIONS WHICH IMPLEMENT THE BANK SECRECY ACT IN ORDER TO STRENGTHEN AND CLARIFY

THE LAW.

THE MAIN POINT THAT YOU MUST REMEMBER ABOUT SMURFING IS THAT THE OBJECTIVE IS TO REDUCE THE VOLUME AND WEIGHT OF ILLICIT NARCOTICS PROFITS FOR EASIER MANIPULATION OR TRANSPORTATION OUT OF THE UNITED STATES. THIS CHART ILLUSTRATES THE LOGISTICS PROBLEM OF MOVING VAST AMOUNTS OF CURRENCY. FOR INSTANCE, $1 MILLION IN 20S WEIGHS 110 POUNDS. THAT SAME $1 MILLION IN 100S WEIGHS 22

POUNDS.

MONEY LAUNDERERS MUST CONVERT THEIR STREET MONEY, USUALLY $5, $10 AND $20 BILLS TO LARGER DENOMINATIONS, PREFERABLY $100

BILLS, OR NEGOTIABLE BANK CHECKS, TO REDUCE THE BULK AND THUS
REDUCE THE POSSIBILITY OF DETECTION BY CUSTOMS AT THE BORDER.

NOT ALL MONEY LAUNDERING GROUPS HAVE FOUND THE SMURFING TECHNIQUE TO THEIR LIKING. THIS WAS MADE CLEAR IN THE FEBRUARY 7, 1985, SEIZURE OF $5,975,850 IN CASH IN SMALL DENOMINATIONS, DISCOVERED BY CUSTOMS ON A SMALL TEXAS AIR STRIP IN THE PROCESS OF BEING TRANSPORTED TO PANAMA.

THIS WAS NOT AN ISOLATED INCIDENT. A MAY 1985 CUSTOMS

NATIONWIDE OUTBOUND CURRENCY OPERATION, FOCUSING ON HIGH-RISK
BANK HAVEN OR NARCOTICS SOURCE COUNTRIES, RESULTED IN 43 SEIZURES,
TWENTY-THREE OF THOSE SEIZURES OCCURRED

TOTALING $4.8 MILLION.

IN THE MIAMI AREA.

REMEMBER! WHEN WE INVESTIGATE AN ORGANIZATION INVOLVED IN

NARCOTICS TRAFFICKING WE MUST ASSUME THAT ONE OF SEVERAL THINGS IS

HAPPENING. THE ORGANIZATION'S ILLICIT PROFITS LEAVE THE COUNTRY
OF ORIGIN NEVER TO RETURN. THE ILLICIT PROFITS RETURN TO THE
COUNTRY OF ORIGIN OR, A COMBINATION OF THE ABOVE IS OCCURRING.
WE MUST NEVER BECOME TRAPPED IN THE THOUGHT THAT BECAUSE ONE
ORGANIZATION LAUNDERS MONEY A CERTAIN WAY, THIS WILL BE TRUE OF
ALL. MOST LAUNDERERS ARE MUCH MORE FLEXIBLE, AND MOST OF THE TIME
MORE CREATIVE, THAN WE ARE.

WE MUST UTILIZE ALL LAWS AT OUR DISPOSAL (BOTH CIVIL AND CRIMINAL).

WE MUST THINK CONSPIRCY FIRST. ONE WILL ALWAYS EXIST.

WE MUST THINK COOPERATION! A MULTIFACETED, MULTI AGENCY,

MULTICOUNTRY APPROACH IS BEST!

Mr. HUGHES. How was the cash detected in the teddy bear?

Ms. TISCHLER. Well, what we were doing was again looking for anomalies. It's a lot of hard work when we go through one of these commercial blitzes because we have to have agents downstairs where the baggage is and agents upstairs where the people are. They tell me that the bear just looked funny. It was sort of hanging out of a bag. It was sort of lumpy looking. Due to the reasonable cause to believe language that was put in the comprehensive crime control bill, that plus some other information, led them to open the bear up, and they found the cash. The dog didn't get it. Mr. HUGHES. I wonder if you could describe for us briefly how your Financial Investigations Division operates, how many people you have in the Division, do you conduct both investigations and intelligence gathering?

Ms. TISCHLER. My Division used to incorporate our Customs analysts, who were devoted to financial investigations. We got reorganized in the early part of the winter. They are now part of our intelligence group. But my Division basically has three branches in it. We don't investigate anything. We sort of try to helpfully direct investigations that are going on in the field and coordinate our regions. We have seven regions. Most of our investigations stretch not only across the regions but, for instance, in the case of that $6 million business, it went all the way to Panama. We had to see that our Customs attaché there in fact did a lot of investigation.

So, it is really more of a programmatic effect rather than an investigatory one. We don't gather intelligence anymore. That function now-our 30 analysts were, in fact, transferred to the Office of Intelligence in January. They handle it all from over there. Mr. HUGHES. Do you analyze intelligence?

Ms. TISCHLER. Yes, they do. Those analysts are the people who support the TFLEC concept that you have heard about. They are strictly devoted to what we call financial analysis. They strictly handle intelligence not only garnered from the financial forms themselves but from collateral intelligence coming in from around the States.

Mr. HUGHES. How many people do you have in your Division?

Ms. TISCHLER. Our Division, agentwise plus some data processing people, is probably around 25 right now. But the 30 analysts are in a division of their own over in, as I said, the Office of Intelligence. At one time we had an entire fiefdom.

Mr. HUGHES. How much contact do you have with EPIC?

Ms. TISCHLER. I don't directly contact EPIC. Our analysts do. They have frequent contact with them to check. For instance, we were running an outbound currency project, and still are. The first project entailed dumping information out of the private aircraft reporting system base. What they did was, they were looking for frequent traveling airplanes coming in from bank haven and source countries. They dealt a lot with EPIC on current information in terms of enforcement. It's a collateral unit in terms of where we get our intelligence from, although a lot of it is just plain Customs information that has gone into the system.

Mr. HUGHES. Do you feed any information to the El Paso Intelligence Center at all?

Ms. TISCHLER. Personally?