WITH REGARD TO ONE MONEY LAUNDERING CASE, A BANK OFFICER FROM CITIBANK
HAS TESTIFIED AS TO WHAT THEIR PROCEDURES ARE.....
|Charles Intriago is
an expert on money laundering and a former federal prosecutor. He heads Global
Media Alert, a consulting firm to banks and others on money laundering (also see
Money Laundering Alert's reports on Raul Salinas/Citibank)|
Well, in that case the American Express Bank International banker, Antonio
Giraldi, was prosecuted for money laundering for a Mexican customer of his, who
turned out to be a money launderer for the Mexican drug cartel of Juan Garcia
Abrego. A witness who testified against him, in fact, as a star witness for the
government, was a woman named Amy Elliot, who was a long-time private banker
for Citibank in New York and the head of the Mexico private banking team for
that bank. She testified about the procedures that her bank follows in
scrutinizing a customer and his or her sources of funds before the bank will
conduct transactions for that customer. She testified that she and her bank
follow a meticulous list of steps and safeguards before engaging in
transactions for new customers.
THEY CALLED IT WHAT ---- KNOW YOUR CUSTOMER?
Banks are supposed to follow Know Your Customer standards. In fact, as we
speak, the Federal Reserve Board is preparing regulations that will make it a
mandatory requirement for banks subject to Federal Reserve regulation to have
Know Your Customer procedures implemented that will assure that they check the
source of funds and...
MISS ELLIOT IS A PRIVATE BANKER. WHAT DO YOU MEAN BY PRIVATE
Private banking is a very lucrative sector of banking in the United States and
around the world. It is, as the name connotes, --and as Miss Elliot called it
-- the white glove area of banking, for people with very high net worths, for
example in her bank, a customer wasn't eligible for private banking white glove
treatment, unless they were able to bring in five million dollars. So that
typically excludes a large array of banking customers and puts into the private
banking area only those customers who have very, very high net worths or a lot
of money to transact through the bank.
SHE ALSO SAID SHE DIDN'T NEED TO ASK BECAUSE OF THE 'ROCKEFELLER'
Well, in her deposition, she supposedly said that when Raul Salinas came to her
on the recommendation of another customer of her bank and started engaging in
transactions in the fifty to seventy to eighty million dollar range, she --
first of all, said that she cleared it with her superiors; but secondly, she
said that she didn't need to explore the source of his money because it would
be the equivalent of asking the Rockefellers where they get their money, and
she was satisfied with his answer that his money came from the sale of a
IN INTERVIEWS, IN RAUL SALINAS'S OWN STATEMENTS, AND IN THE
FAMILY INTERVIEWS IT SAYS THAT THE MONEY WAS FROM RAUL'S FRIENDS.
Hm-hmm. And they also say that these massive sums of money, that reached nine
figures, were -- given to him without any documentation for investments. Now,
I find that very implausible; and if I were a banker, I'd think that I would be
prudent, and at the very least ask him to provide proof and documentation
about that -- about the alleged origin of the money.
THERE'S BEEN TESTIMONY IN THE ABREGO CASE AND NOW THE TWO DOCUMENTS OF PAYMENTS
MADE EITHER TO THE SALINAS FAMILY OR TO THE ATTORNEY GENERAL'S OFFICE IN MEXICO
UNDER CARLOS SALINAS. HOW BIG IS THE CORRUPTION THAT'S BEEN GOING ON? HOW
Look, drug trafficking is driven by one thing and one thing only, money. The
amounts are staggering. If you believe the U.S. government's lowest estimate
on the amount of gross proceeds from narcotics trafficking just in the United
States -- and that figure is eighty billion dollars -- and you divide that by
365, you come up with the staggering sum of $219 million a day that is
generated in gross narcotics proceeds. If you apply a 40 per cent profit
factor to that, just 40 per cent, which is probably conservative, you have $80
million a day of untaxed drug profits. Now, if I were a drug lord and I wanted
to make sure that my business is going well and I'm making $80 million a day
just from U.S. activities, the first thing I would consider is how much of this
money do we need to devote to corruption, both in the public sector and in the
private sector, to make sure that this business, this narc business that we
have, functions smoothly.
So the amount of money is astounding. The profits are astounding. If a quarter
of the money that the U.S. estimates is made in this country goes to or comes
from Mexico, you're talking about $20 billion a year and a massive amount on a
daily basis, so that it's not a big surprise to me to hear these allegations of
massive amounts in payoffs, 150 million to this public official, another 10
million to this guy, 40 million a month to these people. There are allegations
in FBI documents that are now coming out that there was $150 million a month in
payments to Mexican public officials. That doesn't surprise me. That is
This whole thing is driven by money and this narcotics trafficking can't
function without the protection and the safeguards provided by corrupt public
officials. And they will focus on presidents, they will focus on attorney
generals, on police officers, on drug agents, on judges, on bankers, on real
estate brokers, whoever it takes, to make sure that the business moves
NOW, THE CITIBANK CASE RELATED TO RAUL SALINAS HAS OPENED UP A CAN OF WORMS
FOR CITIBANK. BUT CITIBANK IS NOT ALONE...... FOR EXAMPLE, WHAT HAVE WE
LEARNED IN THIS HOUSTON CASE?
I'm amazed. We obtained bank records that were provided in a deposition of
officials of the Texas Commerce Bank, a large bank in Texas. From the court
file we got the document that was filled out by the bank opening a new account
on December 2nd, 1993 for Mario Ruiz Massieu, the former deputy attorney
general of Mexico. Now, this -- just this form alone has a number of the
badges, a number of the indicators that should give a bank serious pause about
proceeding with a particular customer.
Let me just point this out to you, it's a -- it's a shocker. First of all, the
account is opened in the name of Mario Ruiz Massieu and then, the initials POD
appear and I found out that stands for "payable on death" to his wife. Then,
there's a fictitious special security number. Then, one of the signs that
there's something wrong with this account, there's no address. Bankers are
told if a customer says "don't mail me the account statements, hold them and
I'll pick 'em up," they should be suspicious about that. Sure enough, where
the street address should be placed, it says: Hold for customer pickup at the
Richmond Sage Branch of the Texas Commerce Bank.
THAT'S IN HOUSTON?
That's in Houston. Below, where it says "employer," he puts the generic word
"attorney." Bankers are also told: Don't use generic descriptions for the
occupation. Put the exact employer. In fact, their own form asks for employer
and it says that he's been an attorney for seventeen years. Now, here is the
real killer. For his primary identification, it lists Mexican passport number
D842 and then right below, for bank reference, it says "known to officer."
Apparently, the officer was some fellow at Texas Commerce Bank by the name of
J.J. Niarto. All right, nothing else on the form. Very skimpy. But attached
to this form is the primary identification that Mr. Massieu presented and
you'll notice that it expired more than a year before he opened his account and
it listed his occupation on the passport as ambassador for Mexico.
So the bank opened an account for what the bank officer knew was a high-ranking
public official of Mexico with an expired passport; and on the very first day
that the account was opened; that is, December 2nd, 1993, Mr. Massieu opened it
with 40,000 dollars in currency; that is, a cash deposit, followed in the month
of March, by March 2nd of '94, with another deposit in currency of $477,000.
March 4th, two days later, 200,000 in change. And then, a little indicator
that should have prompted the bank's suspicions even more, an internal bank
document indicating that they had found some counterfeit bills, which banks are
always told is an indication that the money, if it's in currency, may come from
drug sales. But despite that -- Mr. Ruiz Massieu continued his deposits. On
March 9th, a week -- less than a week later, another 300,000 in cash; March
11th, 227,000 in cash. Here's another March deposit of 259,000 in cash. April
7th, $615,000 in cash; April 14th, 454,000 in cash. On and on and on. Every
single deposit in this account, which ultimately reached $9 million was in
The other strong indicator to the bank that there was something wrong here was
that the customer asked that it be placed in a checking account, which doesn't
generate as much interest. Bankers are always told that if a customer bypasses
the opportunity to earn more money on his or her deposits, that ought to raise
a red flag. So here this bank is blithely conducting transactions for this
person who is a known public official for Mexico, who's making avalanches of
cash deposits and -- and this bank continues doing business with him, even
though he presented an expired identification to open his
GIVE US AN EXAMPLE OF HOW MUCH MONEY IS INVOLVED HERE WHEN THESE
DRUG TRAFFICKERS TRY TO BUY A PUBLIC OFFICIAL IN MEXICO?
It's amazing. The prosecution of Garcia Abrego, the Mexican drug lord,
revealed that one deputy attorney general of Mexico was receiving -- a guy by
the name of Quao Trajo -- was receiving a million and a half U.S. dollars a
month. That's peanuts. I'm sure, based on
everything that we know about how drug money was spread around the Mexican
officialdom, including police, judges, investigators, customs people, you name
it, I'm sure that probably hundreds of millions of dollars were spent each year
in that -- in the corruption process in Mexico to facilitate the drug
trafficking business. FBI memos that are now surfacing indicate that in one
situation $150 million a month was paid to a couple of public officials in
Mexico to facilitate drug trafficking operations.
YOU HAVE SAID THAT RAUL, MAYBE EVEN CARLOS SALINAS, COULD BE
CHARGED WITH A CRIME IN THE UNITED STATES. WHAT KIND OF CRIME?
Look, for years the U.S. government has indicted the drug lords of other
countries. How many times was Pablo Escobar, for example, the late great
Colombian drug lord, indicted in the U.S. system? Probably half a dozen times.
With no hope of ever bringing him to justice. So that's in the drug
trafficking area. The U.S. government, under the money laundering law, has the
same ability to bring charges in this case against Carlos Salinas if drug money
can be shown to have been part of the transactions that he conducted with U.S.
institutions and his brother, Raul.
If the same fact can be established, that he was running drug proceeds through
U.S. financial institutions, both of them are potential targets of money
laundering prosecution. And frankly, that would send a very powerful message
to foreign political leaders, that if they're taking money from drug barons and
facilitating drug trafficking that so deliteriously affects the United States,
don't bring your money up here, boys. We have laws that will prosecute you and
send you away for up to twenty years, the same way we send the actual drug
traffickers who pay you.
HOW IMPORTANT IS THIS WHOLE EXPLOSION AROUND RAUL SALINAS, CITIBANK, AND
RELATED CASES TO THE BANKING COMMUNITY AND THE BUSINESS COMMUNITY OF THE UNITED
Well, it's very important. After NAFTA, which took effect in 1993-- at the
tail end of '93, commerce and financial services that are offered by the two
countries were greatly facilitated and there's been a spurt in bi-national
commerce and bi-national financial services between the two countries. I think
this whole scandal involving the Salinas brothers is very important in terms of
placing the spotlight on one of the real sore spots in commerce and in
financial activities that have been conducted by U.S. firms and U.S. persons
with Mexicans and that is the age-old problem of corruption. These cases may
finally put a spotlight on this and lead to reforms, lead to prosecutions that
will send a powerful message to- frankly, Mexican public officials, that the
U.S. does not have a welcome mat out for their dirty money.