Feds Posed as Drug Cartel to Send N.J. Man, Texas Doomsdayer to Prison for Money Laundering

By Joe Brandt

Anthony Romano thought he was meeting a man with ties to a Colombian drug cartel.

They made a deal: the man would give Romano cash proceeds from the drug trade in exchange for a check for that amount, minus a fee. Romano and the man met multiple times in Cape May and Atlantic counties.

In truth, the “cartel” man was actually a federal agent looking to nab money launderers, U.S. Attorney Craig Carpenito said in a news statement Monday.

In September, Romano, 53, of Springfield, admitted his role in the scheme – conspiring to launder $590,000 in late 2017.

After several early meetings with the agent, Romano mentioned a friend down south who could help the “cartel” launder even bigger sums. He introduced him to John Eckerd, a developer in McKinney, Texas who was working on a massive development an hour outside of Dallas: a combination doomsday bunker, resort, golf course, and spa.

The $320 million development, called Trident Lakes, barely got under construction. The local CBS affiliate showed shots of a field mostly empty, except for an ornate fountain.

Carpenito said the development was pitched as “a five-star doomsday escape for the wealthy with DEFCON 1 preparedness” that was “capable of withstanding catastrophic events ranging from viral epidemics to nuclear war.”

And Eckerd was prepared to use it to launder Colombian drug money.

In January 2018, after several four- and five-figure transactions, the agent met Romano somewhere in New Jersey to give him $100,000 cash. Eckerd then wired money to a “cartel” account.

The next month, Romano accepted a backpack containing $100,000 cash after meeting the agent and giving him a tour of the development site in Fannin County, Texas. Eckerd then handed the agent a check.

Besides admitting to the money laundering scheme, Romano also pleaded guilty to a 2014 robbery of The Pawn Shop in Union, acknowledging that conspirators, in that case, had a gun during the incident.

U.S. District Judge Renee Marie Bumb, in Camden, sentenced him to 54 months in prison.

Eckerd, who admitted to conspiring to launder $200,000, was sentenced to 15 months in prison Monday in Bumb’s courtroom.

Carpenito credited FBI agents and detectives from the Union County Prosecutor’s Office for their investigation.

https://www.nj.com/atlantic/2019/11/feds-posed-as-drug-cartel-to-send-nj-man-texas-doomsdayer-to-prison-for-money-laundering.html

‘El Chapo’ renews U.S. law enforcement concerns about money laundering via prepaid cards

By Brett Wolf

NEW YORK (Thomson Reuters Regulatory Intelligence) – The recent trial of Mexican drug lord Joaquin “El Chapo” Guzman has reignited U.S. law enforcement officials’ concerns about the use of prepaid cards to launder proceeds of crime.

The purported abuse of prepaid cards by Guzman’s organization to move drug proceeds out of the United States, as depicted in the trial, was “definitely not shocking,” John Tobon, a senior official with Homeland Security Investigations (HSI), told Regulatory Intelligence.

While prepaid card providers are required to have anti-money laundering programs{here} and must report suspicious activity, there remains no requirement that individuals moving cards loaded with cash report the funds when crossing U.S. borders.

In 2011, the U.S. Treasury Department proposed a rule{here.pdf} aimed at forcing those moving prepaid cards loaded with more than $10,000 in or out of the country to declare the funds – just as a similar amount of cash or traveler’s checks would have to be disclosed under existing rules.

But Treasury’s Financial Crimes Enforcement Network (FinCEN), facing industry pushback, has not finalized the rule{here}.

During Guzman’s trial last month, the jury heard testimony that the Sinaloa Cartel led by Guzman used prepaid cards to move drug proceeds from New York to South America to pay for cocaine. The cards, loaded with proceeds of narcotics sales in the United States were transported overseas and the cash was withdrawn at ATMs, the jury heard.

The jury convicted Guzman of money laundering conspiracy and other crimes, and the money laundering witness testimony served as a reminder to law enforcement that FinCEN has not issued a reporting requirement.

U.S. law enforcement officials with Homeland Security Investigations (HSI), which probes cross-border money laundering schemes, consider FinCEN’s failure to enact a prepaid card cross-border reporting requirement problematic.

“I’ve been really fighting, getting into shouting matches with FinCEN personnel because it’s one of those things where the industry has really gone out of their way to thwart these rules,” HSI’s Tobon said.

FinCEN, which in 2016 told Regulatory Intelligence that the effort to develop a cross-border reporting rule for prepaid cards was “not dead,” did not respond to a request for comment for this story.

HSI continues to see prepaid cards used to launder money and the lack of a FinCEN rule on cross-border transport of the cards is “a significant vulnerability,” Kevin Tyrell, assistant special agent in charge with HSI in Miami, told Regulatory Intelligence.

While HSI officials are concerned about transnational organized crime rings smuggling cards loaded with dirty cash out of the country, such schemes do not always involve “mules” who carry the cards. In some cases, criminals simply mail prepaid cards with impunity, Tyrell said.

If U.S. authorities conduct an “outbound inspection” of packages at a mail facility and discover a package full of traveler’s checks, they can seize the instruments and investigate whether required reporting occurred, Tyrell said.

“But if they find a package full of prepaid cards, they still can’t do anything, they just have to let them go,” Tyrell said.

British Columbia’s money laundering is an emergency. The public deserves an inquiry.

By David Moscrop

In June 2018, former Royal Canadian Mounted Police officer Peter German released his report into money laundering in British Columbia. His independent review found that more than $75 million (or 100 million Canadian dollars) had been laundered through the province’s casinos. Canada’s westernmost province is home to about 4.8 million people, so that’s a hefty sum per capita.

In January, we learned that German’s figure was probably low — very, very low — given that an international report put the total amount laundered at more than 1 billion Canadian dollars per year. (The Canadian government knew this, evidently, but didn’t share with British Columbia in the summer.) The new report also includes details about sources of gangsterism not found in the German report. Now, British Columbia is undertaking two parallel processes to better understand what’s happening: a second German report, this time focused on real estate, horse racing and luxury vehicles, and a Department of Finance review.

All of that is perfectly fine — and perfectly inadequate.

Wise and wily governments survive in the long run because they can anticipate and manage crises. Journalist John Ibbitson calls it the “Rhodes Maxim,” citing Paul Rhodes, a former Progressive Conservative press secretary in Ontario, who once told him that the government he served handled controversies by asking itself “How will this end?” and then going there. Smart.

The maxim comes to mind today, with demands in British Columbia for a public inquiry into money laundering in the style of Quebec’s 2011 Charbonneau Commission, which probed public works corruption. That commission’s findings led to millions of dollars in fines, the resignation of politicians and a handful of high-profile arrests — alongside 60 reform recommendations. British Columbia’s largest union, the Government and Service Employees’ Union, is leading the call for a deep dive into the dark cave of misdeeds that hide links to fentanyl trafficking, out-of-control real estate prices and, almost surely, corrupt, complicit and incompetent public officials past and present.

As public pressure mounts on the government to launch an inquiry, the city of Vancouver — a central site for money laundering — has joined the call, as has Richmond, B.C., and the province’s capital city, VictoriaSo has the B.C. Green Party, whose support is critical for the government in the legislature. British Columbians already overwhelmingly support the idea, with 76 percent in favor and 73 percent expecting that an inquiry would expose the truth about what’s been going on in the province’s shadows for all these years — and what it has cost British Columbia in dollars, reputation (the scheme has become known as the Vancouver model), real estate prices, cost-of-living challenges and even lives (money laundering is linked to fentanyl trafficking, which has killed thousands in the province since 2012).

The entire thing is an emergency. Recently, a federal case — known as the E-Pirate investigation — related to money laundering in British Columbia resulted in stayed charges when the RCMP botched the case by exposing the identity of an informant. The investigation reads like something out of a crime novel. As investigative journalist Sam Cooper, perhaps the top journalist on this file, summarized it, “The E-Pirate investigation found loan sharks allegedly connected to drug-traffickers in China used legal and illegal Metro Vancouver casinos to wash drug cash, helping ultrawealthy high-rollers from China buy Vancouver real estate, and fund fentanyl imports into Canada.”

The truth must come out. And it looks like there’s lots to out.

So far, B.C. Premier John Horgan has been noncommittal and prone to temporizing. That’s unwise. He cites cost, time and existing fact-finding efforts as reasons to wait, as well as concerns that such an inquiry could interfere with developing prosecution efforts.

Please. A wide-ranging, long-term commission is critical to exposing the truth and rooting out corruption in the province. And it’s well worth the money (as a member of the Charbonneau Commission has said) — it might even pay for itself in fines and funds saved through reforms. Moreover, findings from a commission, which can compel witnesses to appear before it and require them to testify under oath, can be used in prosecutions. Meanwhile, every day without an inquiry is an extra day for thugs and crooks to get away with illicit acts that harm citizens and residents of the province.

The public is tired of waiting and already deeply suspicious of the province after years of inadequately addressing money laundering and its attendant issues under the previous government. Now, Canada and the world are watching and waiting. The premier and cabinet ought to recognize this fact now and follow the Rhodes Maxim by starting out where this issue will inevitably end and saving everyone the time, energy and frustration from the political posturing that will precede an eventual capitulation.

The province, first under the Liberals and now the New Democrats, has already wasted too much time waiting to get serious about organized crime. The delay is undermining governance in the province and destroying the lives of innocent people. Everyone knows what the right thing to do is. All that’s left is to do is get to it.

Feds accuse three Wyoming restaurants of involvement in drug money laundering scheme

By Shane Sanderson

Three Wyoming restaurants participated in a multistate drug money laundering scheme, authorities allege in a 50-page civil complaint filed Friday in federal court.

The filings state that Mexican fast food restaurants in Colorado and Wyoming — including Rodolfo’s Mexican Grill in Cheyenne, Rolando’s Mexican Grill in Cheyenne and Almanza’s Mexican Food in Laramie — were involved in a scheme to use falsified invoices to transfer hundreds of thousands of dollars in concert with a Colorado Springs food distributor. When law enforcement raided the Colorado Springs facility, they found more than $35,000 cash. No cash registers or prices for food items were found in the facility, according to the filings.

The bank accounts associated with Almanza’s Mexican Food and Rolando’s Mexican Grill were closed before law enforcement began investigating the case, the documents state.

By Monday evening, defense attorneys had not responded to the prosecution’s latest filing, but in earlier filings they largely denied the allegations.

The man who ran the distribution business, which is known as El Potosino Foods, has connections with a Mexican drug cartel, the documents state. The phone number for Jose Aguilar-Martinez, who owns El Potosino, turned up in previous investigations of Ismael “El Mayo” Zambada and Joaquín “El Chapo” Guzmán, although the documents do not specify the investigations or the phone number’s connection to them.

Authorities have said Zambada is a leader of the Sinaloa cartel, which has smuggled billions of dollars worth of cocaine, heroin, meth and marijuana into the United States.

Earlier this month, a jury convicted Guzmán, another Sinaloa cartel leader, of various federal crimes, including engaging in a continuing criminal enterprise, conspiracy to launder drug proceeds and international drug distribution. His lawyers have said he will seek a new trial following a Vice News report alleging juror misconduct during the case.

The allegations implicating one of the Wyoming restaurants were reported by the Star-Tribune in January. The report drew from responses to a sealed civil complaint filed in November.

In their responses, defendants laid out some of the government’s allegations, including that bank accounts belonging to Hilario Montejano-Aleman, the owner of Rodolfo’s Mexican Grill in Cheyenne, were used in drug money laundering.

Rather than filing documents under seal, prosecutors partially redacted, and on Friday filed publicly, their amended complaint. It revealed more details of the case, which does not bring any criminal action against the alleged money launderers. Instead, the filings seek to require the forfeiture of $1.5 million spread across 15 bank accounts and two safe deposit boxes alleged to be used in the scheme.

The bank safe deposit boxes alone contained more than $800,000 linked to drug trafficking, according to the documents. One of those boxes was filled to capacity with hundreds of thousands of dollar bills that investigators say are tied to drug trafficking. A woman accessed the box at a Colorado Springs bank 16 times over the course of nine years. Every time she appeared pregnant. “Or, in retrospect, carrying the cash inside of a false belly,” prosecutors wrote.

Although the allegations span multiple states and businesses, the investigation began in Wyoming.

Law enforcement began investigating the case in Cheyenne in July 2016 after receiving a report of a suspicious vehicle purchase. That purchase was among multiple turned up by investigators in which purchasers put down $10,000 or more in cash, the documents state. Among those vehicles were a 2007 Cadillac Escalade for which a cook at the Laramie restaurant put down $14,000 cash.

The case also has a Casper connection, although the extent of that connection is not clear. According to prosecutors, a phone number associated with Rodolfo’s called a Casper number that the DEA is investigating in a different case.

San Antonio man due in court Tuesday in money laundering case involving luxury cars

By Guillermo Contreras

One of two defendants charged in a money laundering case involving more than 100 exotic and luxury cars that were seized is scheduled for hearings Tuesday to determine whether law officers had enough probable cause to arrest him, and whether he qualifies for bail.

Jose Luis Magallon Jr., 28, is accused of laundering more than $200,000 in a series of undercover law enforcement sting operations.

Magallon is the owner of Magallon Enterprises LLC, an exotic and luxury used auto dealership in San Antonio, but court records accuse him of being a launderer for a drug trafficking organization from Michoacán, Mexico.

Magallon allegedly dealt with an undercover agent who posed as a transporter of large amounts of drug cash, and flashed several high-end cars that were part of Magallon’s money laundering operation, a criminal complaint affidavit said. The affidavit also alleges that other people helped Magallon disguise his money laundering under layers of fronts.

Agents did not raid Magallon’s business, but used him to get to a co-defendant, Karen Mgerian, who was willing to launder larger amounts, according to court records. Mgerian, 40, allegedly laundered $575,000 for undercover agents acting as drug cartel operatives, and was in negotiations to launder another $4.7 million, according to court records.

Agents last Thursday raided Mgerian’s car lot, MGM Auto, near Rittiman and Interstate 35, and an auto body location he allegedly controlled called Odadi Auto near Stahl Road. They also raided his home in Stone Oak and a home Magallon rented near Perrin-Beitel and Loop 410.

Mgerian initially had been scheduled to have his bail hearing Tuesday but it has been rescheduled to Feb. 13, records show.

DEA agent linked to Colombian money laundering scheme, prosecutors say

By Scott Glover

(CNN)An agent with the US Drug Enforcement Administration is under investigation in connection with a scheme to launder millions of dollars for Colombian drug traffickers, CNN has learned.

The years-long conspiracy sometimes “involved the use of undercover accounts controlled by the DEA,” according to court papers filed in US District Court in Tampa, Florida.
The agent is not identified by name but is characterized as a “co-conspirator” in the case against a long-time DEA informant who has pleaded guilty to money laundering for the Colombians.
The agent, according to court papers, received cash payments from an account containing hundreds of thousands of dollars in drug money. The agent also directed additional money to be deposited into the accounts of his family members, the documents state.
A DEA spokeswoman in Washington declined comment.
Though the case was filed in Tampa, the prosecution is being overseen by the US Attorney’s Office in Atlanta, Georgia. The transfer of the matter to another jurisdiction is the sort of step federal authorities sometimes take in investigations involving allegations of official corruption.
Kurt Erskine, a top official in the US attorney’s office in Atlanta, declined comment on the case.
The information about the allegedly rogue agent is contained in a plea agreement between federal prosecutors and former DEA informant Gustavo Yabrudi, a Venezuelan-born Miami resident.
Yabrudi’s defense attorney, Leonardo E. Concepcion, said in an email that the case is “still active” and, “I cannot discuss it as this time.”
Yabrudi worked on and off as an informant for the DEA from 2010 to 2016 with stints in New York, Boston and Miami, according to court records. He was deactivated at one point in 2013 for “unauthorized money movements.”
According to court records, the agent identified as a co-conspirator instructed Yabrudi in 2015 to recruit someone to open a bank account under a false name in Miami. Hundreds of thousands of dollars “from illegal drug sales” was deposited into the account, the records state.
Neither the agent nor Yabrudi informed the DEA of the existence of the account, according to the court records.
The pair subsequently spread the money around among fellow conspirators who laundered the proceeds in various ways and got the money into the hands of traffickers in Colombia, the documents allege.
At least $7 million in “illegal funds” passed through a business account belonging to one co-conspirator, according to Yabrudi’s plea agreement.Yabrubi was charged with money laundering in September. He agreed to plead guilty later that same month.
In December, federal prosecutors and Yabrudi’s defense attorney filed a joint motion requesting that his sentencing be postponed for six months. He is currently set to be sentenced in May.
“The defendant is cooperating against others who facilitated sophisticated money laundering schemes, in part, by using undercover accounts that were shell companies and controlled by law enforcement,” the motion states. “Some of the illegal proceeds laundered during these schemes derived from drug trafficking and public corruption related offenses.” The agent’s current status with DEA is unclear.