How Money Laundering Actually Works | How Crime Works | Insider

My name is Robert Mazur. I spent two years undercover

laundering

tens of millions of dollars for Pablo Escobar's cartel. This is how

crime

works

. Money

laundering

allows cartels to produce the most lethal thing they produce around the world: corruption. It allows them to control countries, presidents of countries. Operation C-Chase was a multi-institutional task force to prosecute the Medellín cartel's biggest

money

launderers. Most of the people I dealt with were high-level drug dealers who had hundreds of millions of dollars. I am doing this interview in silhouette because two agencies and an intelligence agency informed me that the Medellín cartel made a contract on my life.

I spent a year and a half putting together what I believe is one of the most sophisticated facades used in the underground. I built the personality of Robert Musella. I dressed for the part. He certainly had the lifestyle. He drove a Rolls-Royce, Mercedes, Jaguar. He was immersed in real business. He had an air charter service with a private jet. We had a jewelry store chain with 30 locations on the East Coast. A large amount of cash passes through the Diamond District every day. So if you have that type of business, you have a very good excuse to know where the cash came from.

He was embedded in an investment firm, a mortgage brokerage firm, and even a brokerage firm based on the New York Stock Exchange. And then my partner and I began a two-year infiltration of the Medellín cartel and the banks that supported them. One of the keys to doing undercover work is developing your undercover persona so that they have as many traits in common as you do. Robert Musella was from Staten Island. I'm from Staten Island. Robert Musella was a businessman. I have business experience. I didn't fake accents, I didn't fake anything. It was always just me.

The first person I met who was working within the Medellín cartel is a man named Gonzalo Mora, a small-time

money

launderer who had an import-export business. But his laundry ability was probably limited to about $50,000 a week at best. We had my partner, Emir, deal with him and just say, "Listen, my boss handles a lot of this, but he never wants to meet you. He wants to stay in the shadows. But if you could ever convince him to come over." From the shadows, rivers would open and untold amounts of money could be laundered." At the end of those six months, Gonzalo Mora was knocking on the door to greet me.

You know, it's always better to play hard to get. I also knew that these people have a sixth sense. If you're afraid of a dog, they know it. You're the first one they bite. I didn't want them to bite me, so I knew it would be working against me and undermining my cause if I showed any fear. I said, "Listen, I have to make these people understand that they should let me invest some of their money. Your only responsibility is to introduce me to them. If I'm successful, we'll do even bigger business." He felt obligated to make introductions and then I started climbing the ladder to meet bigger and bigger people.

You know, money launderers, like the ones I played, basically operate what's called the black money market. It is an informal banking system that is made available to people who operate through the metro. So, as a black money market operator, I have a supply of dollars. My supply comes from drug dealers. Now I have to find people who have a demand for dollars. People who want to buy dollars are often importers from around the world who otherwise have to go through their central bank and spend 25% of their money to officially get dollars. I could sell it to you for 10%.

My traffickers, in many cases, wanted Colombian pesos. So the best people I could sell those dollars to were Colombian importers. All I have to do is change. So I have supply clients, dealers and demand clients. But most of the time the money ended up in bank accounts controlled by the cartel, in Panama, and from there they distributed it around the world where they wanted to hide it. Well, sometimes you had to use the money to buy airplanes. There was a guy whose responsibility was to acquire the planes, trucks and things like that that the cartel needed.

Basically, he was the buyer of the cartel's air force. So I dealt with him because I needed money to buy the specific aircraft they were looking for, which were Rockwell 1000 and Rockwell 980. Some of the money is smuggled from the United States to Colombia and used to pay bribes to people in the military or prosecutors. or politicians or whatever help they need to buy. Most of the money is in fives, tens, and twenties. This is because people who use illegal drugs buy them with fives, tens, and twenties. This is collected by people who here have the responsibility of ensuring that the cartels do nothing more than collect money.

They try not to have traffickers and money manipulators in the same place. Too many assets to potentially lose. So the dollars usually came to me in suitcases, duffel bags, boxes. New York was a key point. Get a million, 2 million dollars per delivery. He usually had runners pick him up and bring him back. You don't often find the guy who

actually

controls the safe on the street. The way it

works

is that we get the information from Gonzalo Mora. Then you could give us a phone number in the form of an invoice number. You might say, "You have to contact Guapo and he will have 250 boxes.

That's $250,000." They generally like to meet in a public area, so it could be at a McDonald's. They sit. Not much is said. He pushes the keys on the table. "He's in the trunk." Emir goes and gets the money. Typically, he is rubber-banded in blocks of $5,000 and $10,000, depending on the denominations. A lot of people say, "Wow, isn't it tempting? You have all these millions and millions of dollars, and they're in cash." Unfortunately, there have been people in almost every agency who have fallen victim to the slippery slope of greed. My motivation was that information became my heroine.

If I couldn't get the next big piece of information and couldn't risk more than I did to get the last piece of information, I felt like I wasn't fulfilling my mission. Yes, he was addicted, but he was addicted to information. Layering is a process by which a series of corporations, usually offshore entities, are used to continue receiving what initially began perhaps as a suitcase full of cash. The way we stratify it, the money would first be deposited in a certificate of deposit in Luxembourg in the name of an offshore entity. That money was used by the bank as collateral for a loan in another part of the world.

So let's say the loan was in Paris and it was for a Gibraltar corporation. And then that Gibraltar corporation would transfer the funds to Panama and then from there to accounts controlled by the drug traffickers. So the purpose you use the layers for is simply to confuse the path in which the money moves. For someone to trace the money back, they must first lift Panama's corporate veil and bank secrecy laws. Then we have to drill the same in France. Then we have to drill the same in Luxembourg. You know, a lot of times what they do if they don't want to deal with a person like me, they use an army of messengers, they call them Smurfs, the little blue ones, Smurfs running everywhere.

We call them Smurfs because let's say there are 10 of them. Their job every day is to go meet their money contact, and that guy may have $500,000 in his trunk, and each of them gets $50,000 and a map that tells them where they are locally where they can go to use cash to buy MoneyGrams . cashier's checks, money orders, traveler's checks. They will purchase a money order for $987.25 to try to make it look like it is a payment. Leave the beneficiary blank. They generally don't want to buy anything over $3,000. So at the end of the day, the $500,000 that filled the trunk was now a stack perhaps 8 inches high of money orders and traveler's checks.

There were times when they offered it to me and then took it out and washed it. That was security for them because we had no direct contact with their main money people. We had just received a box from FedEx with $500,000 in money orders. I think the biggest deposit was around $2.1 million. There was a time when I met in Paris with Pablo Escobar's main lawyer, a guy named Santiago Uribe, and some other people who worked directly with Pablo. He had sent Uribe to evaluate our money laundering processes. And at the end of that meeting, we came to an agreement that we would receive, in a relatively short period of time, $100 million that they wanted to keep in Europe in case they had to flee.

So when we came back from Europe, we started taking deliveries. One million in the morning, two million in the afternoon. He had told the people who were doing surveillance that they had to be very careful and that we should try to keep it as light as possible because they would have counter surveillance. And one of the people I dealt with, a person who frequently met with Pablo Escobar, told me, "Make sure your people look for gringos on the street," white guys, "who are between 20 and 30 years old, in good shape, wearing jeans, collared t-shirts, solid color, running shoes, fanny packs.

That's where the ugly ones hide. That's what the cartel people informally called the feds, I never wanted to enter an office. But this was becoming very important. So I met with the people who were going to do the surveillance, and there was a room full of gringos with jeans, solid-collared pullover shirts, and fanny packs, and I tried to convince them that this was the uniform. that everyone was looking for, but egos are such in law enforcement that sometimes people don't want to follow that advice. So, anyway, the surveillance was burned and the next thing that happened is that my partner, Emir Abreu. , received a call from Gonzalo Mora.

And in the background you could hear the screaming voice of Gerardo Moncada, Pablo Escobar's main manager, shouting that Musella, I, had to be an undercover DEA agent because they saw all the federal agents there. , and all deals from now on were off. And I had to talk myself out of it. I guess the point is that there are a lot of different moving parts to these covert operations, and it's pretty easy for any of us to do something that could potentially endanger someone else on the team. All the traffickers told me, "I love your money laundering system, but the final payment is US dollar checks from accounts that are in the United States.

We want you to open US dollar accounts in Panama." Panama uses the US dollar more than its own currency. They know that secrecy is great in Panama on the part of the corporations, the banks. It is more difficult for the DEA to obtain information about the accounts. But what they also told me was, "Listen, we want your accounts in Panama because we own General Manuel Noriega, and he won't touch any of your accounts because you're with us." So now I have to open an account in Panama. I happened to be passing by a Tampa branch of the Bank of Credit and Commerce International, the seventh-largest private bank in the world.

There was a big golden sign. Because I would never have gone in there if it weren't for that. And they said, "Well, we'll give you a meeting if you can give us a resume." I had a fully verifiable resume and bank accounts worth millions of dollars, all of which the particular bank wanted to see before opening up to me and explaining how they laundered money for many organized

crime

people. And I said, "All my clients are from Medellín, Colombia. They operate businesses here in the United States that are very sensitive, and my job is to very cautiously help them move capital across borders." He says, "Well, that's the black money market.

We have a lot of clients who are into that business." He said, "Yes, Panama is where you want to be." There are many hands that go through these checks and sometimes mistakes can be made. And in fact, that's how I

actually

got into the International Bank of Credit and Commerce. That got me into the BCCI's inner circle of dirty agents, and I later met more than a dozen of them. The number one person who managed my accounts, a gentleman called Amjad Awan. He managed accounts of people who ran countries, for Manuel Noriega. He helped launder the drug profits Noriega obtained from the protection he sold to the Medellín cartel.

And during that time we recorded around 1,200 conversations, all of which were used as cornerstones of the prosecution not only of drug traffickers and money launderers, but also of senior officials of the Bank of Credit and Commerce International. He needed to take the conversations to the areas where he was exposing his true intent, his involvement in criminality. I couldn't allow them to dance around the problems. You have to try to find a way to have the conversation. So one of the things thatI used during that period of time, one of the most famous entrepreneurs at that time in the late '80s, was a guy named Lee Iacocca.

He ran Chrysler. Everyone knew who he was. And then when he talked to people, especially at the bank, he would say, "If my clients came into this room, they might be mistaken for Lee Iacocca. The big difference is that they don't sell cars. They sell coke." "I dealt with corrupt bankers. I dealt with lawyers in Switzerland who formed corporations to hide the origin of our funds. I dealt with lawyers in Panama, people who ran financial services corporations who do nothing but form tens of thousands of corporations for people of They provide nominee directors who hide the real ownership of the accounts and control of the corporations.

All of these people are intermediaries that the underworld relies on. There were other people, real money launderers at that time, who sent what they said. be precious metals inside and outside the United States, which was actually lead covered in gold, and that was their cover for depositing cash and they were not ashamed of it to talk to the bank and say, "This is a business that. generates cash." If you have enough credible stuff, it's surprising how quickly they will become convinced that you are who you say you are. June 1988. I was told it would be the first week of October that the operation would be over.

I have two years of work to do and I should finish it in about three months. Many times these sting operations result in indictments, but the bad guys are in countries that do not offer extradition. Colombia was one. Someone suggested, "Well, why don't we organize some kind of personal event?" One of the agents said, "Well, they obviously seem to like Bob. How about a wedding?" So we put this together for a supposed wedding at Innisbrook, which is a country club. This became personal. In some cases, the children of the future defendants were part of the wedding.

Wives. And the night before, one of my informants walked up to the defendants and said, "Hey, Bob doesn't know this. We're having a bachelor party. The cars are coming soon." The arrest team is there. They arrest them. Everyone was in disbelief. And the case concluded with the arrest of about 85 people, the collection of fines and confiscations of about $600 million, and the seizure of about 3,000 pounds of cocaine. Ultimately, the bank imploded on the night of the arrests. You know, it was all high fives. They wanted to go out and have a celebratory gathering. I didn't want anything to do with it at all.

I was emotionally exhausted. I first found out about the contract on my life about 30 days after the sting operation. Operation C-Chase was over. The longest trial lasted six months. I was on the witness stand. I could see the hatred in his eyes, even more so in the eyes of his relatives who were there. They certainly didn't see me as a person just doing their job. They saw me as a person who deceived them. But I never tricked anyone into doing anything other than trusting me. No one there did anything they hadn't done before. After testifying, my family and I rented a motor home.

We went to the mountains, got away from everyone and tried to heal. There was a pager number, an 800 number, that they could call. The office could call me and leave me a message, and I would check from time to time, and I found out that the jury had convicted everyone on virtually every charge. I returned to the camp by a river and sat there thinking about it. And it occurred to me that it was so surreal that I had done the same things that the bankers had done, and I was getting awards, and they were about to go to jail for a long time.

And I don't take what I did lightly. Some people think it is a sign of weakness. I shed one or two tears that day. I think that was good, because I want a government with a conscience. I don't want people to high five. It's unfortunate, but the law enforcement community and private sector responsible for trying to tackle money laundering have not had much success. The United Nations on Drugs and Crime estimates that approximately $400 billion is generated each year from the sale of illegal drugs. What I really think needs to be done, you have to understand, there are two different sides of banking.

There's the sales side and there's the fulfillment side. The sales side brings the accounts. Compliance, at a bad bank, does background checks to make sure they're not dealing with a bad guy. You need to put that together. I suggest it only on accounts that have received $5 million or more in a year. I think the account relationship manager who introduced the account should file with the bank an affidavit stating that he has asked certain questions. He asks questions that, if asked, would expose whether or not it is an account managed by front men. Those questions aren't asked, and they aren't asked now because the sales side always tells the fulfillment side, "If I ask those questions, we won't get this business because you don't want to answer those questions." "You know, we have a joint counterterrorism task force led by the FBI, but I don't know how many hundreds of agencies also participate in it.

There should be a joint anti-money laundering task force that does exactly the same thing. " There has been an evolution of cryptocurrencies. There are people who have been involved in the drug world and have used cryptocurrencies. Unlike cash, you can follow cryptocurrencies. The other problem you have with cryptocurrencies is that you just need to look at Bitcoin and see. which, unlike the US dollar, its value is not stable. I don't think it's really ready for the big time in the drug world. What's big? Gold refining in the Middle East, Dubai. I retired from undercover work after the second operation when I was almost killed, and that was in the late '90s.

I am extraordinarily grateful to have the platform from which I have the opportunity to speak, and that platform is, first of all, a book called "The Infiltrator" which became a New York Times bestseller and the basis of a film of the same name starring Bryan Cranston. . And then a book came out that I wrote last year called "The Betrayal," a nonfiction book about the second covert operation I did. But as long as I have that platform, I will do everything I can to try to share information that can somehow help us with the problem that we face with this huge illegal drug problem in and around our country. the world.