Ex-Miami DEA Agent Allegedly Part of Huge Colombian Drug-Money-Laundering Ring

By Jerry Iannelli

Last September, the federal government charged Gustavo Yabrudi, a dual Venezuelan-American citizen, in Tampa federal court with conspiracy to commit money-laundering. Yabrudi has since pleaded guilty. But court documents in those cases list four “co-conspirators” who worked alongside Yabrudi throughout South Florida and Latin America: Three of those four lived in Miami-Dade County, according to court records. “Co-conspirator 3” was listed as “a resident of Miami-Dade County, Florida, and Colombia who worked as a Special Agent for the United States Drug Enforcement Agency (DEA).”

The Associated Press yesterday reported that Irizarry was that third conspirator, and that Yabrudi had been working as Iziarry’s DEA informant. (Witnesses said in court transcripts that Yabrudi helped arrange money “pick-ups” between drug-dealers and undercover DEA agents.) Unnamed sourced within the federal government told the AP that Irizarry is now the subject of a criminal probe, and that his alleged corruption scheme is one of the biggest black eyes in DEA history. Given Colombia’s status as a haven for drug traffickers, the agency considers its Colombian offices some of the most important in its (failed) global War on Drugs. Irizarry was reportedly a “star” agent in Miami who racked up tons of high-profile arrests before he was promoted and moved to Cartagena. He declared bankruptcy in 2010 but, by the time he moved to Colombia, was somehow throwing yacht parties. His second wife was also reportedly related to the Colombian mafia.

New Times was not able to independently confirm the AP’s reporting. But court documents reviewed by the newspaper allege the group of five people would skim cash from Colombian drug sales in the United States, ship it back to Colombia, and then convert it into Colombian pesos using extremely favorable, black-market Colombian money-exchange programs. The feds said the group moved $7 million this way: In some cases, the group allegedly used a Miami-based cell-phone company to buy goods using dirty money and then export the phones down to Colombia to be sold for pesos. Prosecutors also stated in recent court filings that Yabrudi worked with Irizarry to open bank accounts across Florida — the two men then deposited money from drug sales into the hidden accounts.

Court records allege that Irizarry also helped the group steal funds from the DEA.

“It was also part of the conspiracy that conspirators would and did obtain illegal drug proceeds held in DEA undercover accounts,” which the group then laundered back into Colombia, a September 2018 government-forfeiture document reads. Prosecutors later added that Irizarry “provided conspirators, including Yabrudi and Co-Conspirator 4, access to funds contained in DEA undercover accounts.” The other conspirators then allegedly paid “kickbacks” to Irizarry.

Of course, Irizarry began to trip up. The Associated Press reported yesterday that the feds caught onto his scheme when the agent started brazenly stealing from the DEA and screwing up legitimate agency business. In one case, an $87,000 wire-transfer to a Cali Cartel drug-trafficker went missing. But that trafficker was apparently an informant for the Miami-Dade County Money-Laundering Strike-Force — county cops then complained to the Justice Department, which reportedly led to Yabrudi’s arrest.

How Chinese Crypto Money Laundering Networks Enable Mexican Drug Cartels

By Elizabeth Gail

A recent Senate Judiciary Subcommittee hearing on Border Security and Immigration has revealed that Mexican drug cartels are now more than ever relying on Chinese cryptocurrency money laundering networks.

The Chinese-Mexican crypto money-laundering relationship stems from years of cooperation enabling narcos in the North American nation to obtain precursor chemicals used to process drugs such as methamphetamine.

China is a major supplier of controlled substances such as ephedrine and pseudoephedrine which are vital ingredients in the production of methamphetamine (meth). The East Asian nation is also a major exporter of fentanyl, a synthetic opioid that is about 50 to 100 times more powerful than morphine.

It is medically used as a pain reliever in extreme cases and approved for individuals suffering from painful conditions such as cancer. Fentanyl is now used to lace drugs such as cocaine and heroin to make them more potent.

Mexican cartels are opting to partner with the Chinese due to their vast money laundering networks, which have been propagated by the country’s stringent money transfer limits to foreign markets. Dubbed the Chinese Underground Banking Systems (CUBS), they are made up of an intricate network of money and cryptocurrency brokers who move currencies in and of the economy while sidestepping the country’s banking system.

They traditionally fulfilled the emergent need by affluent Chinese citizens to circumvent the government’s US$50,000 yearly external funds transfer limit. It is not only the Mexicans, but Australian and European drug traffickers who are now relying on the Chinese to launder their illegal proceeds.

Chinese underground banks are estimated to have over 10,000 clients and believed to launder over US$100 billion every year. According to statistics released by the United States Office on Drugs and Crime, about US$2 trillion is laundered on the global market annually.

The director of the U.S. Department of Homeland Security’s Investigations Joint Task Force, Janice Ayala, has publicly stated that Chinese transnational operations are responsible for the recent crypto money-laundering spike.

Chinese networks have been able to push laundered funds through the country’s banking systems, which is then sent back to Mexican shell companies operated by drug cartels. Their crypto money-laundering, financial maneuvers are apparently to blame for the steady decline of cash seizures related to drug dealing activities in Mexico and the United States.

Bitcoin has been observed to be the cryptocurrency of choice for transnational criminal organizations (TCOs) because it is widely accepted in the broader market and can readily be traded on over-the-counter markets, and exchanges with lax know your customer and anti-money-laundering policies.

Chinese brokers involved in money laundering primarily help clients transfer assets from China and enable cash to bitcoin transactions. They also sell bitcoin for cash obtained through illicit means.

That said, however, cryptocurrencies are still not the ideal money laundering facility due to the vicissitudes of the market. They are, however, among the many ways that criminals use to launder money.

Crooks, however, view cryptocurrencies as a safer mode of storing currency holdings and transacting. Privacy coins such as Dash, Monero and Zcash offer feature-rich options that help users maintain anonymity making them an ideal choice for individuals looking to avoid scrutiny.

Cash seizures on the decline

In the past, Mexican drug cartels faced enormous cash seizures. In 2007, for example, hundreds of millions of dollars were seized in one of the properties belonging to Chinese-Mexican businessman, Zhenli Ye Gon, following a money laundering investigation.

He was soon after arrested for allegedly contributing to the Mexican drug trade. This was after being found to have improperly imported four containers of pseudoephedrine and ephedrine. Pseudoephedrine is a major precursor chemical used in the processing of meth. The raid on his home led to the seizure of about US$205 million in cash.

The money, which was mostly in US$100 bills, weighed about two tons and in various other denominations including Hong Kong dollars and Mexican pesos. It became the biggest money seizure in the history of narco-trafficking and so today, cryptocurrencies have offered drug smuggling networks a sanctuary away from such situations and inconveniences.

Right now, U.S. border customs cash seizures related to Mexican narco-trafficking operations are at an all-time low. In 2011 for example, the Arizona ports authority recorded seizures amounting to about US$12 million. 2016 figures stood at US$960,000, an over 90 percent drop.

Silk Road’s contribution to the current situation

The infamous Silk Road online marketplace pioneered the cryptocurrencies and black market connection. It enabled drug dealers, and sellers of other illegal paraphernalia to carry out trade in anonymity by supporting transactions made primarily in bitcoin.

Named after the ancient trade routes that connected the Eastern and Western hemispheres, it was launched on February 2011 by Ross Ulbricht, who went by the moniker, Dread Pirate Roberts.

The website was shut down by agents from the Federal Bureau of Investigations on October 2013 and Ulbricht arrested. It, however, became a blueprint for future crypto money laundering and black-market websites on the darknet. Numerous variations of the network have been built over the years.

AlphaBay Market is one example. Launched in December 2014, it was shut down in 2017 following a joint effort by law enforcement agencies in Thailand, the United States, and Canada. Its founder, Alexandre Cazes, a Canadian national, died in Thailand three days after he was arrested. He was suspected of having committed suicide.

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.