US federal authorities have uncovered a massive money-laundering operation allegedly operated through otherwise legitimate textile companies in Columbia. Thirty-one individuals have been charged with laundering hundreds of millions of dollars, the US Treasury Department disclosed on July 9th.
Ringleaders Isaac Perez Guberek Ravinovicz and Henry Guberek Grimberg funneled bundles of cash through the bank accounts of well established textile companies and set up new accounts attached to shell companies in Panama. According to US authorities, they then used these accounts to shuttle the proceeds from drug transactions conducted all over the world back to Columbia.
Thus far, accounts linked to the drug cartels have been detected in the US, Spain, Hong Kong, Mexico, China, Israel, the Cayman Islands, Venezuela, and various locations dotted across Europe and Central America. All these accounts, and all assets and accounts related to them, have been frozen under the Foreign Narcotics Kingpin Designation Act.
Hampered by new, stringent restrictions on reporting the use of US cash, drug cartels in Columbia and Mexico have been actively exploring new ways to legitimize their hoards of cash. As an alternative to the risky smuggling of colossal piles of unwieldy money, cartels use the dollars to purchase a commodity, then subsequently ship that commodity for resale to their home countries.
An undercover agent with the US Immigration and Customs Enforcement (ICE) expressed astonishment with the drug cartels’ evolving ingenuity: “It’s such a great scheme. You could hide dirty money in so much legitimate business, and they do.You can audit their books all day long and all you see is goods being imported and exported.”
The cartels typically inflate the purchase price of the commodity for the sake of laundering even more money with greater efficiency. Another unnamed official said, “You generate all this paperwork on both sides of the border and showing that the product you’re importing has this much value on it, when in reality you paid less for it.”
“Now you’ve got paper earnings of a million dollars,” the official continued. “You didn’t really earn that, but it gives you a piece of paper to take to [Mexican financial authorities] to say: ‘This million dollars in my account–it’s legitimate. It came from this here, see?’”
Federal authorities have struggled to crack these money laundering operations partly because of their novelty and partly because there is so much legitimate trade, often at wildly varying prices, between the US and Latin America.The textile industry has proven to be a particularly convenient vessel for laundering billions of dollars in illicit cash.
Raymond Villanueva, head of the ICE unit that investigates international money-laundering, noted how well-suited the textile industry is to large scale money laundering: “They have an industry there that gives them the ability to conceal that money and separate it from the illegal activity…millions and millions of dollars, and containers, that move around the world on a daily basis.”