...Could you explain what IMPACT is, what's its purpose, and why it was
South Florida IMPACT is a group of [twelve] law enforcement agencies... that
was formed to combat drug money laundering in South Florida. ...
Now as I understand it this money which you believe to be illegal money or
drug money [is seized]. What do you do with the money?
We seize drug money. We forfeit that drug money in courts. And then the drug
money is used to further the activities of the task force [and] pay [its] bills
so it doesn't become a taxpayer burden. The remaining money is used to fund
other law enforcement type projects, and if there's any left, goes back to the
various police departments who have to by statute use [it] for law enforcement
So it's kind of ironic that it's drug money funding law enforcement.
Yes, it's drug money funding law enforcement. That has been going on for a lot
of years in the drug arena. There is a lot of money, a lot of property [that]
has been seized over the years by state, local and federal agencies and put
back into the war on drugs and other crime. ...
I know that the drug czar and Janet Reno have both said positive things
about IMPACT and some people say it'll be a model for what is done nationwide
by local communities in this area. Give me an idea of the record of the
organization over the last six years, in terms of money seized, arrests, and
where it's gone.
Since inception, South Florida IMPACT has either seized, been responsible for
the seizure of, or been involved in the seizure of approximately 150 million
dollars in drug currency. There have been approximately 500 or so arrests.
There have been a large number of individuals deported through INS...and
[IMPACT has seized] about 27,000 kilos of cocaine, which is an awful lot of
drugs. That money has gone to agencies all over the United States...
Now, the operation depends on confidential informants. How do you like to
describe them? Operatives?
Confidential informants, confidential sources. They are the mainstream of most
proactive police work. And we could not operate without them. No one in the
drug arena, no law enforcement agency, can work without sources. They are the
lifeblood of our operation. ...
How are they paid?
They're paid on a percentage of what it is we are able to seize and
successfully forfeit through court action. ... Your commission would be based
on how directly your information led to enforcement. If we seized a lot of
dope...and if your information led to that, we would pay you for it,
depending... on how critical your information was. How directly did it lead to
the seizure? With money, it's different. If you were one of our sources of
information and you provided us information which directly, after
investigation, led to a seizure--and then a successful forfeiture--you would
receive fifteen percent of what we forfeited. ...
So these are not informants, then, like someone who's been caught in a
criminal act and is working off their conviction in order to get a lesser
In most drug work informants who are "working off a beef"--which is the
terminology used--they abound. In this business they do not. They're people
who have very little, if anything, to do with drugs. They are strictly
financial people involved in financial matters, who have the opportunity to
determine situations, identify individuals, and give us information that leads
to seizures of money and often drugs.
Now, I was told that you have contracts with these informants or operatives.
It's not just a handshake thing that's going on?
We document all informants that we use in standard police procedure, which is
identifying them, giving them rules and regulations, having them sign off on
the conditions [under] which they operate. We do not empower them to do
anything illegal. They are not employees...
And is it a one-to-one relationship between this agency and that informant?
Does somebody have like a stable of informants? Is there a subcontract you go
to who has informants?
...You develop them. You find people who you believe are in a position--they
may not even know they're in a position--to provide you with information. They
might not even know that the information they have access to is of value to
you. So sometimes we find them and we develop informants.
Have you got an example of somebody you found?
... A businessman who would sell products and material to Colombia could tell
the Colombian businessman that he'll take his payment in the form of U.S.
dollars in cash on the streets of Miami. If indeed a businessman were to do
that, the Colombian businessman who owes him a debt would jump at it because he
can buy those dollars very cheaply in the form of cash drug dollars on the
streets of Miami.
The individual who will deliver the cash to that businessman works for a
Colombian-based drug money launderer. By receiving his payment in the form of
cash dollars in Miami, it gives us an enforcement opportunity to identify who
it is that drops that money. That may lead to all types of enforcement. And
this man is a businessman. He's not a narcotrafficker. He's not a money
launderer. He's a businessman.
So you might approach that businessman?
We might definitely approach that businessman. We might approach a business
who sells to Colombia or to Venezuela or Ecuador and ask him if anybody has
offered to pay him in cash. And if he accepts it we can identify who that
individual is and then have a target to work on the street.
Let me back up for a second and get some basic definitions here. You
mentioned Colombia. What are the main countries that are involved in this
money brokering business?
In the black market dollar peso exchange it is primarily Colombia and
then to some extent Venezuela, Ecuador and Panama...The biggest player in the
black market dollar peso exchange is the United States.
The Mexicans don't avail themselves of this, even though they're heavily in
the traffic. Why not?
Because you can utilize U.S. dollars in Mexico without fear of sticking out.
It doesn't work that way in Colombia. A Colombian drug dealer has got to have
pesos in Colombia. And what does he really have when he sells his drugs in the
United States? He sells them for cash U.S. dollars. They accumulate in New
York. They accumulate in Miami. They accumulate in other places. He really
needs pesos in Colombia, but what does he have? Dollars in America. So he
sells those dollars. He sells them to a Colombian money broker who will give
him pesos for those dollars.
So you're a Colombian businessman and you want dollars. How does that
interface with the drug industry?
... A Colombian drug lord...successfully gets his drugs into Miami we'll say.
The drugs are sold for US cash. The drug dealer therefore has a large stash of
U.S. cash sitting in Miami... It does him no good. He can't use it. He wants
pesos in Colombia to avoid detection because you don't spend U.S. dollars in
Colombia; you spend pesos. He sells that money to a Colombian purchaser who is
a money launderer. He is a money broker. He sells it to him for about 1,200
pesos per dollar. That's a deep discount, because the exchange rate in the
newspaper--if you look at it today--is going to be approximately 2,000 pesos
Why would the drug dealer do that? Because he wants pesos in Colombia and his
profit percentage is so high, he doesn't much care. He's gonna get 1,200 pesos
per dollar. His investment is only about 300 pesos per dollar in the whole
drug event. So he walks away with a pile of pesos delivered to him, right into
his hand, in his home, in Colombia. He takes no risk. He no longer owns those
drug dollars in Miami. He could care less if they're seized. He's made his
profits. He's out of the equation.
Now you have a Colombian money launderer, who is a money broker, who owns this
money sitting in Miami. The money is still in the hands of the doper's
employee. It has to get from the doper's employee to the broker's employee.
That's the vulnerability. That's the window we try to peer through, look
through, see who's doing what, and make a seizure. Again, if we're good enough
and we're lucky enough and we hit it just at the right time we can not only
seize the funds--we can go right back to the dope. ...
Mexico's different, right?
Completely different. Mexico is a whole different ball game. The Mexicans get
their drugs from the Colombians. Therefore, they have to pay the Colombians a
percentage of their drug profits for the raw material that they distributed in
the United States. That money enters the black market dollar peso exchange--but
it does so within Mexico, from correspondent bank accounts back to the U.S.
The rest of the cash--their end of it, their half of it--they can keep in the
form of U.S. dollars, because U.S. dollars don't raise an eyebrow in Mexico.
Now...money is money. If it's no longer the drug dealer's money and he's
conducted some transaction with some other individual who's not a drug
trafficker, why is it drug money anymore?
Drugs are sold for money, you know, they're not sold for checks, they're not
sold for credit card purchases, they're not paid for with anything other than
U.S. cash, 99.9% of the time. That money is narco currency. It has narco
character to it. Now, it may enter legitimate commerce. And there are people
that say that once it enters legitimate commerce it therefore loses its narco
character. And if it went to an innocent owner with plausible deniability--and
I'm using a lot of catch words here, but those are legal type phrases in this
genre--then possibly it has lost its narco character. But when it passes hands
surreptitiously after two people play beeper tag in Miami for twenty-five
minutes and meet in a Home Depot parking lot and one guys gives another guy a
satchel full of a million dollars U.S. cash--that's still narco currency.
There is nothing legitimate about that transaction. Nobody transacts business
When you seize money like that, do people come and challenge you?
They often do. It's not the only way we seize money. We seize money from bank
accounts as well. But this type of seizure that we're talking about--cash
seizures on the street--often times you see this transaction, you stop them,
and you question them. You make a legitimate probable cause stop for some
infraction of some type. Or if they're not in automobiles or out on the street
you can just go up to them and ask them. The law permits it...
Your target is the money?
Our target is any way we can disrupt the drug industry. We want the drugs and
we want the money. All of us in this business here in Miami--and everybody
here at IMPACT--have worked drug cases for years and seized a lot of drugs and
locked up a lot of drug people. Untold metric tons of cocaine have been seized
coming into the U.S.
When I arrived in, in South Florida in 1985 the cost of a kilo of cocaine
wholesale was about $14,000 to $15,000. It is fifteen years later. The cost
of a kilo of cocaine is approximately the same on a wholesale basis. Now, there
are a lot of variables at play. But with all the druggers that we've sent to
jail, all the cocaine we've seized, one would assume that the price would have
gone way up. It's the same, okay? We have a much better shot...taking their
profits than we do taking their drugs. This is a wide-open country. You can't
protect the borders of this country against drug dealing. It's an
I know there's been criticism in the sense that what you're really
after--that law enforcement is becoming addicted to the money. It's easier to
deal with, you can use it for your own purposes, and you've been diverted from
the real object--which is the drugs.
Yes, we've heard that criticism, that the money is self-sustaining and that
we're after the money now. However, you can't argue with 27,000 kilos of
cocaine. This task force, which is an anti-drug money laundering task force,
has seized more cocaine than the individual departments would have ever seized
in a six-year period of time. So... a) we have proved that going after the
money results in serious seizures of the drug, and b) yes, the money works
very, very well because this task force doesn't cost any taxpayer anywhere in
the country any money at all. We get no federal funds, no state funds, no
local funds. It's all self-sustaining. And a lot of the money [that we've
seized] has gone back into social programs...This money is all used for very
worthwhile purposes. And yet we've still seized more drugs than we would have
without the program. . . .
...The question's been raised--in order to get close to your targets, do you
actually have to launder money for them?
On occasion we do launder money for the "bad guys"...Sometimes the only way to
identify targets is to proactively take contracts and launder money for the
And explain that to me--take contracts? I'm not sure I understand.
Well, if a Colombian money broker has purchased the money from a drug dealer,
the money sits in the U.S. He bought that money to sell it to a legitimate
Colombian businessman to pay legitimate debts. Most of the debtors will not
accept that money in the form of cash so he has to hire people, give out
contracts to take that cash and get it into the U.S. banking system.
How do they do it?
Well, you get it in by structuring it in cash--making deposits under $10,000
using multiple accounts. You take cash and you buy money orders which reduces
the volume of cash that you have. And then you put the money orders into the
bank as if you were a business. You combine all that money in bank accounts and
send it to one big account. And then you can do wire transfers off that bank
Once the money's into the banking system, you can manipulate it any way you
like. Colombian money brokers have legions of employees in Miami and New York
that do nothing but get drug money into U.S. banks. And that's a fact. We
have documentary proof. We know it. We have identified over 10,000 bank
accounts in New York and Miami that have been utilized to launder drug funds.
...Colombians and others will open bank accounts, allow others to use those
bank accounts, for money laundering purposes and/or pay the percentage of it.
It happens in Miami and New York every day. It's primarily a Miami/New York
syndrome, although we have proof that it happens in Detroit, Chicago, Boston
and a number of other places, and sometimes in California as well. ...
And then this money is used, as you said, to pay debts. But that's to buy
commodities or facilitate trade? I mean, what is the money generally used for?
Why does the businessman want it?
The vast majority of this drug cash is sold to businessmen in various
formats--wire transfers, cash, checks, money orders, to pay legitimate debts in
the U.S. And yes, this is a very positive event for the U.S. economy,
especially the South Florida economy, because most of the businesses are here.
The drug money laundering industry has not hurt commerce in the United States
whatsoever. But we have to realize where this money originates. It's drug
money and by allowing this to happen we facilitate the drug dealer. ...
You're a business in the United States. You get an order from somebody in
Colombia, but you get paid by a third party. [How do you know if it's narco
You get paid through an account--either a wire transfer or a check, or series
of checks. Let's say you sell a hundred widgets to a company in Colombia for
$10,000 and you get $2,000 checks from five different bank accounts in Queens,
New York. Is that not an awkward from of payment? Five checks from accounts
with different names on them in Queens--and you're in Colombia? That's an
awkward form of payment. Yes, it's a form of payment that no one questioned
before. But I guarantee you that's narco currency.
But is it illegal for me to take that kind of money?
If you don't know any better and therefore you're an innocent owner of that
money, you have plausible deniability. But [U.S. Customs] has published a
wonderful document for businesses that describes the dollar peso exchange and
says "If you're paid this way, you'd better be careful because it may well
be--and probably is--narco currency." So if I were to walk into your widgets
manufacturing facility and explain to you that a Colombian may pay you in an
awkward form of payment that is derivative of narco currency and you say,
"Screw it. I'm gonna take it anyway." Then there's a strong possibility
someone will find the correct statute to use and seize your money. ...
So some of your critics say--and you know, these are federal law enforcement
primarily, who are upset that there's a local law enforcement operation that's
in the money laundering business--your work really doesn't affect the
traffickers. They say that you don't really change the amount of drugs that
are available and that really what you're doing is setting up just another
self-perpetuating bureaucracy--a self-funding situation. You're out there
looking for your budget all the time.
The federal agencies still do this same type of activity. They do. Nothing
has changed. They still do it. They just have more controls on it now, but
they do it. We took $150 million worth of drug proceeds out of circulation,
out of the drug dealers, the money brokers, and that whole system that they
have in place. We took those profits out of the system--converted into use by
the American system, the American public, okay? And took 27,000 kilos of drugs
off the street and arrested over 500 people, and deported a large number of
...I interviewed a DEA supervisor out in LA who said that...over the last
twenty years of his thirty-year career, his people would always urge him to
Money's valuable because, yes, you can use it. Cocaine--you seize cocaine, you
burn it. You destroy it. It's gone. You seize money--not only have you hurt
them, you've taken their profits. They've done all their work. They've done
everything they had to do to make their profit. They've made the profit and
boom--you take it away.
In effect, you really piss them off. You cause disruption--major disruption.
Everybody's profit is gone. Who owes who money? Now it's a real nightmare.
And yes--the money is of value to American society. You put it right back into
the system. You supplant tax money with it. ...
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