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Financial Crimes
12/03/2010

ICE arrests 13 in Puerto Rico on money laundering charges

Arrested individuals facilitated the illegal transfer of approximately $8 million to the United States and overseas.
Arrested individuals facilitated the illegal transfer of approximately $8 million to the United States and overseas.
Arrested individuals facilitated the illegal transfer of approximately $8 million to the United States and overseas.

SAN JUAN, Puerto Rico - Thirteen individuals charged by a federal grand jury with money laundering were arrested this morning by U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI) special agents working jointly with officers of the U.S. Customs and Border Protection, Puerto Rico Police Department, San Juan Municipal Police, Puerto Rico Bureau of Special Investigations, Puerto Rico Department of Treasury (Hacienda), and Puerto Rico Ports Authority.

On Oct. 14 and Nov. 17, under separate indictments, a federal grand jury charged the defendants with conducting financial transactions affecting interstate and foreign commerce by delivering moneys which involved the proceeds of a specified unlawful activity, that is drug trafficking in violation of the Comprehensive Drug Abuse Prevention and Control Act, knowing that the transaction was designed in whole and in part to conceal and disguise the nature, location, the source, the ownership, and the control of the proceeds of such specified unlawful activity, and the laundering of monetary instruments. If convicted, the defendants face a sentence of up to 15 years in federal prison.

According to the ICE HSI investigation, the defendants allegedly attempted to launder approximately $8 million of which $4 million were seized by ICE HSI special agents. The investigation also revealed that the defendants utilized a money laundering scheme called the Black Market Peso Exchange to launder the illegal proceeds of drug trafficking organizations through electronic transfers to China, Hong Kong, Colombia, Sweden, Panama, Spain, United Arab Emirates and the United States.

"In recent years ICE has encountered an increasing number of major financial crimes, frequently resulting from the needs of drug trafficking organizations to launder large sums of criminal proceeds through legitimate financial institutions and investment vehicles," said Roberto Escobar-Vargas, special agent in charge of ICE's Office of Homeland Security Investigations in San Juan. "We are committed to continue working with our law enforcement partners in our efforts to detect and close down weaknesses within our financial, trade and transportation sectors that can be exploited by criminal networks."

"Thanks to the efforts of the federal and local law enforcement agencies, we will prosecute these individuals who assist drug traffickers in the financial end of their business. Without these financial transactions the drug traffickers are unable to enjoy the profits of their illegal activities," said US Attorney Rosa Emilia Rodriguez-Velez.

Trade-based money laundering is an alternative remittance system that allows illegal organizations the opportunity to earn, move and store proceeds disguised as legitimate trade. Value can be moved through this process by false-invoicing, over-invoicing and under-invoicing commodities that are imported or exported around the world. Global trade is frequently used by criminal organizations to move value around the world through the complex and sometimes confusing documentation that is frequently associated with legitimate trade transactions. This method is also utilized extensively by Colombian drug cartels to repatriate drug proceeds commonly referred to as the Black Market Peso Exchange (BMPE). Underground banking, unlicensed money service businesses, hawalas, etc., have all utilized trade to move value as settlement of a debt arising from remittances overseas. These organizations can accomplish settlement by purchasing commodities in one country and then transferring them to another country where the commodity is sold and the proceeds remitted to the intended recipient.