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81 people and four businesses in 3 countries charged in $50 million drug cartel June 14, 2005 - nynewsday.com
NEW YORK -- Investigators trained to follow the money gutted a giant Colombian drug cartel by charging 81 defendants blamed for importing more than $50 million worth of narcotics into the United States, authorities said Tuesday.
Nearly 50 people have been arrested in New York, Canada, Puerto Rico, California and Miami, Fla. in what investigators dubbed "Operation Mallorca," named for a San Juan bakery that served a role in the probe, said U.S. Attorney David N. Kelley.
The prosecutor said the two-year probe busted a mammoth drug cartel operating on the northern coast of Colombia, putting 20-year veterans of the drug trade out of business and blocking the flow of millions of dollars in drugs to the United States.
Police Commissioner Raymond Kelly said the need to crack down on drugs was illustrated hours earlier when a police officer was shot in the knee during a struggle with a man who was caught with marijuana in a Queens baseball park.
Kelly said Operation Mallorca started in 2002 when a police detective arrested a drug dealer in Miami and persuaded him to cooperate with the government by infiltrating the operations of nine separate drug rings in New York City.
Before long, he said, investigators were monitoring the transfer of large sums of cash on streets corners in places like midtown Manhattan and Flatbush, Brooklyn, following a money trail that demonstrated the reach of a massive drug operation.
In dribs and drabs, authorities poked holes in the drug cartel's operations.
In November 2003, more than 725 pounds of the organization's cocaine was seized in New York. In June 2004, more than 20,000 pounds of marijuana was seized from a fishing vessel off the coast of Antigua on its way to the United States. That same month, more than 1,000 pounds of cocaine and heroin destined for the United States was seized in Puerto Rico.
By Tuesday, $50 million worth of cocaine, heroin and marijuana had been seized and $7 million in narcotics revenues had been snatched by the government from bank accounts in New York, Puerto Rico and Miami, Kelley said.
"The flow of drugs to our friends and children has been impeded and disrupted and our banking system has been purged of millions of dollars stained with blood and poison," Kelley told a news conference.
Kelley and others praised the infiltration of a highly secretive and sophisticated black market peso exchange favored by drug organizations to launder their illicit proceeds.
The exchange, he said, permits middlemen to handle transactions between drug dealers who control massive quantities of cash in the United States and Canada and individuals in Colombia who want to buy U.S. dollars outside the legitimate Colombian banking system to avoid taxes, import fees and transaction fees.
The importance to investigators of the effort to follow money to the drug dealers was reinforced by Karen P. Tandy, administrator of the Drug Enforcement Administration.
"DEA is targeting the financial networks of drug cartels like never before to bankrupt traffickers and money launderers," she said. "In Operation Mallorca, we followed the money around the globe and into the hands of major Colombian drug traffickers."
She called the exchange "the largest known drug money laundering mechanism in the Western Hemisphere."
Following the money has allowed investigators to deny drug trafficking organizations more than $500 million in profits last year alone and to increase the amount of money seized from drug dealers by 40 percent, she said.
The current investigation located 300 illegal financial transfers to 200 bank accounts involving 170 separate account holders in 16 U.S. cities and 13 foreign countries, authorities said.
Still, Kelley suggested the government had won a mere battle in the war on drugs.
"The frightening thing is that drug dealers are learning new things all the time," he said. "As they're learning, we're learning."