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U.S., Colombians bust money laundering ring

From Terry Frieden
CNN Washington Bureau


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DEA agents make an arrest in Puerto Rico as part of Operation Mallorca.
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WASHINGTON (CNN) -- A two-year undercover investigation targeting money laundering operations in the United States and Colombia has resulted in 81 indictments and 36 arrests of people allegedly connected to a major drug cartel, the Drug Enforcement Administration announced Tuesday.

Federal officials said the probe, dubbed Operation Mallorca, was aimed at disrupting the financial side of illegal drug trafficking, but also resulted in the seizure of drug shipments estimated at more than $50 million, along with about $7 million in cash.

The arrests -- in New York, Florida, California, Puerto Rico and Colombia -- followed earlier related arrests in Colombia and the Caribbean, authorities said.

The DEA said the focus of the probe was money laundering by four Colombia-based money brokers who funneled the drug proceeds through the Colombian black market peso exchange.

"We followed the money around the globe and into the hands of major Colombian drug traffickers," said DEA Administrator Karen Tandy. "We've shown the black market peso exchange for what it is -- the largest known drug-money laundering mechanism in the Western Hemisphere."

The DEA said the peso exchange is a system in which traffickers sell the dollars they get from U.S. drug sales to brokers for pesos. The brokers then sell the dollars to Colombian importers who purchase goods in the United States and elsewhere. The DEA chief said that by purchasing U.S. dollars on the black market peso exchange rather than through Colombia's regulated system, the importers avoid taxes and gain a competitive advantage over legal importers.


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