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Financial Crimes

ICE shares more than $166,000 with the Maryland National Guard

Maryland National Guard credited for their critical assistance in federal cases

REISTERSTOWN, Md. — Earlier this week, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) shared $166,707.41 in "asset sharing" funds with the Maryland National Guard. The funds were seized during an investigation into drug smuggling and money laundering.

HSI Baltimore Special Agent in Charge William Winter presented a poster-size check to Maryland National Guard Colonel Marco Harris and Major General James A. Adkins, the adjutant general of Maryland, at the main Armory at Camp Frettered Military Reservation in Reisterstown.

"The Maryland National Guardsman assigned to my office's drug and financial investigative groups provide outstanding support and crucial assistance to further Homeland Security Investigations mission in identifying, disrupting and dismantling criminal organizations that are operating here in Maryland," said Special Agent in Charge William Winter. "I am pleased to share the forfeited proceeds of an illicit enterprise with the Maryland National Guard for their work in this investigation. I look forward to continuing our strong partnership with the Maryland National Guard and our other law enforcement partners throughout Maryland and abroad, in financial and narcotics trafficking investigations and make an impact in making our communities safer."

"For more than 20 years, the Maryland National Guard has supported federal, state and local law enforcement agencies through the congressionally authorized and federally funded National Guard Counterdrug Program," said Major General Adkins. "We have cultivated strong partnerships helping to protect our citizens and educate them on the dangers of drugs. "I am proud of all of our Soldiers and Airmen who apply their military skills in support of law enforcement through the Counterdrug program. This money will be put to good use in purchasing equipment and providing training to further enhance the program."

In 1994, the former U.S. Customs Service initiated an investigation in Baltimore, which uncovered the existence of Black Market Peso Exchange systems specializing in non-commodity based capital flight to off-shore locations. The Black Market Peso Exchange is the primary method used by Colombian narcotics traffickers to launder their illicit funds. It is an illegal currency exchange which uses narcotic distribution proceeds in the United States to pay for goods that are then shipped to Colombia. The recipients in Colombia pay for those goods in pesos, which are then forwarded to the narcotics traffickers. The system allows narcotics traffickers to launder and transport their narcotics dollars through the U.S. financial system by utilizing domestic accounts held by businesses or individuals doing business in the United States.

The investigation uncovered an organization that found wealthy Colombians during the 1990s, who were looking for ways to take their investments, which were held in rapidly devaluing Colombian pesos, and move them into U.S. dollar-based investments held in tax-haven banks in the Cayman Islands and Switzerland. A Colombian businessman was an investor.

Over a period of six years, HSI special agents picked up millions of U.S. dollars in drug money in various cities in the United States and Puerto Rico. In response to coded instructions faxed from Colombia, the money was sent by wire from an undercover account in Maryland to numerous domestic and off-shore banks. The cash drug proceeds that were picked up by the HSI special agents were eventually wired directly into the Colombian businessman's account in the Cayman Islands. Drug money from other pick-up operations was also traced into that account and into another account of the Colombian businessman's at Delta Bank in Miami.

HSI special agents seized $17 million in assets in Jersey Isle, Switzerland, the Cayman Islands and Panama belonging to the Colombian businessman.

The seizures and global settlement agreement were the result of a HSI Baltimore Asset Identification Removal Group investigation of Colombian nationals and a U.S. financial institution that laundered money through the BMPE.

In 2003, Delta National Bank & Trust entered a guilty plea to failure to file suspicious activity reports pertaining to millions of dollars of activity through their Miami branch, and the bank forfeited $950,000. In 2004, a Colombian company known as MoonBridge forfeited $850,000 that was frozen in Delta Bank in the Cayman Islands.

In February 2008, the U.S. government entered into a settlement agreement for the Colombian businessman to forfeit $8 million in frozen assets. The forfeited money was shared with the four assisting foreign governments.

Since fiscal year 2009, HSI Baltimore has shared an additional $175,949 in asset forfeiture derived from different criminal investigations to the Maryland National Guard.

Asset forfeiture is a powerful tool used by ICE HSI and other law enforcement agencies to seize assets from criminal organizations in their illicit enterprises or acquired through criminal activity. Under the equitable sharing program, federal, state and local law enforcement partners and foreign governments working with HSI in joint investigations can be eligible to receive a portion of the proceeds of a federal forfeiture, which fosters greater partnership and cooperation among agencies.

The ICE HSI Asset Forfeiture/Equitable Sharing program is one of many ways law enforcement agencies can partner with HSI to address law enforcement needs in their communities. HSI Agreements of Cooperation in Communities to Enhance Safety and Security, or ACCESS, provides local law enforcement agencies an opportunity to team with HSI to combat specific challenges in their communities.

In addition to HSI and the Maryland National Guard, the Baltimore City Police Department assisted in the investigation.