JUAN CARLOS ELLIS, GERARDO PALMA, and GIOVANNI DI RIENZO to New York to face criminal charges in “Operation White Dollar,” a landmark international money-laundering case that targeted the Colombian Black Market Peso Exchange (“BMPE”). Operation White Dollar led to the indictment of 34 defendants in the United States, Canada, and Colombia, and the forfeiture of more than $20 million in Colombian drug proceeds from bank accounts around the world. ELLIS, PALMA, and DI RIENZO are expected to make their initial appearances later this afternoon in Manhattan federal court.
Montreal: Five Montrealers have been arrested and are among 31 people charged with being part of a massive money-laundering ring that processed tens of millions of dollars in cocaine and heroin profits from Colombian drug traffickers.
Investigators traced at least $100-million ( U.S. ) to the money-laundering scheme, which used a black-market currency exchange system to move funds from Medellin, Colombia, to bank accounts as far away as Israel, Hong Kong and the Cayman Islands.
The investigation involved undercover work and wiretaps. Details were made public in an indictment unsealed this week in Manhattan by U.S. federal prosecutors.
The indictment says that the five Montreal residents are among a group of 16 defendants who "acted as the Colombian narcotics traffickers' operatives in the United States and Canada, gathering drug proceeds."
According to the Indictment: The BMPE is an informal currency exchange system in which one or more “peso brokers” serve as middle-men between narcotics traffickers, who control massive quantities of drug money in the United States and elsewhere outside Colombia, and companies and individuals in Colombia, who wish to purchase U.S. dollars outside the legitimate Colombian banking system. The peso brokers arrange for the collection and accumulation of drug dollars in the United States, Canada, and elsewhere outside of Colombia, and then arrange for the funds to be deposited into the U.S. banking system. The peso brokers finally then sell the drug dollars to companies and individuals in Colombia seeking to avoid the payment of taxes, import duties, and transaction fees owed to the Colombian government.
However, the indictment added, while the defendants believed they were delivering their bosses' money to money launderers, they were instead "providing them unwittingly to . . . law enforcement officers acting in undercover capacities."
They were arrested as part of Operation White Dollar, a two-year joint investigation by the U.S. Drug Enforcement Administration, the RCMP and law-enforcement agencies in Colombia and Britain.
Operation White Dollar targeted a money-laundering scheme known as the Colombian Black Market Peso Exchange.
The indictment says the money was processed by a series of middlemen, starting with money brokers in Medellin, who secured contracts from narcotics traffickers to launder millions of dollars of drug proceeds earned in the United States and Canada.
The dollars were exchanged for Colombian pesos that arrived in bank accounts in Bogota and Medellin and were delivered to the Colombian underworld in armoured cars.
The five Montreal defendants are Juan Carlos Ellis, 42; Hugo Palma, 43; Yip Oi Man, 48; Giovanni Di Rienzo, 43; and Gerardo Palma, 32.
The U.S. court document alleges that Mr. Ellis collected more than $2.5-million ( U.S. ) in drug money from 2002 to 2004, some of which he received from Hugo Palma and Gerardo Palma.
The indictment said Mr. Di Rienzo had $290,000 in drug proceeds in his possession in 2002.
Also, the document said, last February, Mr. Yip was in Queens, N.Y., where he had with him nearly $99,900 in drug profits.
Organized crime commonly relies on unassuming people to act as couriers.
An RCMP spokesman said the five arrested Montrealers were low-profile figures, with only one having a previous criminal record, for a minor offence.
RCMP Constable Michel Blackburn said the Montreal men are alleged to have handled a total of $1.8-million ( U.S. ) and $455,000 ( Canadian ) in drug money, with the funds ending up in bank accounts in England and the Cayman Islands.
The money from the drug proceeds was initially collected in bags or suitcases, the indictment said. In one case, a courier showed up at New York's JFK airport with more than $167,000 in drug money stashed inside the metal tubing of luggage carriers.
Failed deliveries appeared to have been dealt with in a ruthless fashion. According to the indictment, police wiretaps overheard two men in Colombia discussing kidnapping relatives of someone who was responsible for $400,000 ( U.S. ) in drug money that had been seized by authorities.
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