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Charles Intriago

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)
WITH REGARD TO ONE MONEY LAUNDERING CASE, A BANK OFFICER FROM CITIBANK HAS TESTIFIED AS TO WHAT THEIR PROCEDURES ARE.....

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 BANKER?

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' THING.......

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 construction company.

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 MUCH...IN DOLLARS...?

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 peanuts.

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 smoothly.

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 currency.

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 statement.

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 STATES?

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.



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