25 October 2001

Customs Service Fact Sheets on Financial Crime Initiatives

As the U.S. Treasury and Justice departments launch a multi-agency initiative aimed at disrupting terrorist groups' financial networks, they will model their work on successful existing operations.

Following are the texts of U.S. Customs Service fact sheets released October 25 on its El Dorado Task Force on money laundering in New York and on some of Customs' investigations into global financial crime:

The El Dorado Task Force

The El Dorado Task Force, operating out of the U.S. Customs Special Agent-in-Charge Office in New York, is recognized as one of the nation's most successful money laundering task forces and has been repeatedly cited as a model for other task forces.

Led by the Customs Service and the Internal Revenue Service, the task force was created in 1992 to address the prolific money laundering threat in New York. The El Dorado Task Force is today comprised of 185 individuals from 29 federal, state, and local agencies, including the FBI, the New York Police Department, and the New York State Banking Department.

The El Dorado Task Force targets money laundering systems and financial crimes through undercover investigations, outbound operations, regulatory interventions, and other innovative techniques. The task force is segmented into different investigative programs that focus on areas such as money services business, the Black Market Peso Exchange, financial institutions, bulk cash smuggling and intelligence. Since its inception, this approach has resulted in the arrest of 1,500 individuals and the seizure of $425 million.

One of El Dorado's most successful initiatives was Operation Wire Drill, which targeted money laundering through the New York wire remitter industry. It began after an analysis showed that a small number of local remitters had wired nearly $800 million to Colombia in one year. To attack the problem, agents combined undercover investigations with little-used regulatory measures known as Geographic Targeting Orders (GTO).

These GTOs imposed enhanced reporting requirements on certain remitters and their 1,200 agents. The result was a major reduction in the flow of drug funds through remitters. To avoid the strict reporting requirements of the GTOs, money launderers resorted to cash smuggling to move funds abroad. Anticipating this response, El Dorado agents had coordinated with Customs officers on the East Coast and were ready. In the first six months after the imposition of the GTOs, outbound cash seizures on the East Coast jumped by 400 percent.

As the GTOs pressured money launderers on one front, investigations pressured them on another. These El Dorado cases resulted in more than 130 arrests and the seizure of $50 million. Ultimately, by combining investigative and regulatory approaches, Operation Wire Drill forced much of the New York remitting industry to be abandoned by money launderers.

In August 2000, the El Dorado Task Force was recognized as the action team for the New York/New Jersey HIFCA (High Risk Money Laundering and Financial Crime Area). Since that time, the El Dorado Task Force has created a financial intelligence center that includes 40 individuals from various law enforcement and regulatory agencies.

U.S. Customs Service Financial Investigations

The U.S. Customs Service has a long history of combating global financial crime. Customs jurisdiction is triggered by the movement of illicit funds, services, or merchandise across U.S. borders and is applied pursuant to the authority under the Bank Secrecy Act, the Money Laundering Control Act, and other laws. Customs efforts are designed to dismantle specific money laundering systems as well as international criminal organizations. To achieve this objective, Customs uses undercover investigations, outbound currency operations, regulatory interventions, industry outreach, multi-agency operations, and global partnerships. Customs financial probes focus on the proceeds of all crimes, including drug trafficking, terrorism, fraud, and pornography. Listed below are a few significant Customs financial cases:

• Operation Casablanca - This undercover Customs case is recognized as the largest drug money laundering investigation in U.S. history, resulting in 167 arrests and the seizure of more than $100 million. Three prominent Mexican banks were indicted on criminal money laundering charges, two of which pleaded guilty. The third forfeited $12 million. Of the 44 individuals arrested in the May 1998 final takedown, 41 pleaded guilty or were convicted.

• Operation Wire Drill - Conducted by the Customs-led El Dorado Task Force from 1995 to 1998, this case targeted suspect remitters in the Northeast that were moving nearly $800 million to Latin America annually. The probe brought Geographic Targeting Orders against the remitters and their 1,200 agents, resulting in a dramatic reduction in the flow of drug proceeds through New York remitters. There were 137 arrests and $50 million seized.

• Operation Risky Business - This case ranks as the largest non-drug money laundering investigation conducted by Customs. It targeted a massive "advanced fee" scam that victimized at least 400 people around the globe of at least $60 million through the use of offshore banks and shell corporations. As of May 2001, the case had resulted in 19 convictions and guilty pleas, as well as the closure of specific banks in Antigua.

• Operation Choza Rica - This Customs probe disclosed a massive money laundering operation involving Mexico's most powerful drug boss and officials at American Express Bank International (AEBI). The case resulted in convictions of two senior AEBI executives and several other U.S. bankers. In 1994, AEBI forfeited some $40 million to the government.

• Operation C-chase/BCCI - This Customs probe, which concluded in 1988, was the first to expose criminal activities at the Bank of Credit and Commerce International (BCCI). The case resulted in the indictment of more than 60 individuals, including 5 BCCI bankers who were later convicted. BCCI ultimately closed in a global, multi-billion dollar collapse.