USA TODAY International Edition
THE CASH MACHINE FUELING THE DRUG TRADE
Cartels turned Miami suburb into pipeline for narcotics cash
In a leafy office park in the suburbs west of Miami, local undercover officers set up an elaborate sting inside Sevilla Trading Corporation.
Beyond the neatly furnished front office, a courier working for drug dealers carted in a shoe box stuffed with thousands in cash collected on street corners in cities across the country.
A police informant counted cash in a back room, divided it, then delivered it to computer stores down the street in the first step of turning the dollars into pesos and sending them to drug kingpins in Colombia.
The investigation in Doral in 2002 was supposed to crack down on rampant laundering in the area and shut down the businesses taking in drug money. But in the following years, just the opposite happened.
Internal police records reviewed by USA TODAY Network show the drug groups quietly turned Florida’s fastest- growing suburb into a money laundering haven that has empowered the largest criminal organizations in
THE LAUNDERING ZONE
To crack down on money laundering, the federal government issued a temporary order in 2015 for businesses in this area to report all cash transactions of $ 3,000 or more and identify who paid the money. the Americas to hide their illicit profits and dominate the narcotics trade in the United States.
Twelve miles from the looming skyscrapers of downtown Miami, the criminal groups have moved millions of dollars though the little- known maze of office parks just blocks from the prestigious golf course that bears President Trump’s name.
With the nation steeped in a heroin epidemic — thousands of overdose deaths each year — the laundering has allowed criminal groups smuggling the drug into the country to get their money out of the country once the narcotics are sold.
“It’s absolutely critical to them,” said John Tobon, an agent for the Department of Homeland Security in Miami.
In a community known mostly as a getaway from urban problems of Miami, the flood of drug money has confounded law enforcement agencies.
“We always thought we would get to it at some point,” said Charlie Blau, a former federal prosecutor who oversaw the first money laundering sting in Miami. “We knew it
“It’s not good for Florida. It’s not good for Doral. It’s not representative of the majority of the businesses we have here.” Mayor Juan Carlos Bermudez
would be a bigger problem.”
Federal agents say the cartels use many methods to launder money, including overseas bank wires and smuggling cash over the border. They also have turned to other laundering areas, like the garment district in Los Angeles and jewelry centers in New York City, to clean drug profits.
But the export shops west of Miami remain among the oldest conduits in the country to launder money — and the most difficult to infiltrate and shut down.
Twice, local law enforcement task forces targeted the area, but no business owners were arrested nor were their shops closed.
Internal records of the most recent sting operation, in 2012, show for the first time the stunning amount of money that moved through the businesses and their importance to powerful drug organizations.
Tens of thousands in cash bundles were dropped off at a cellphone outlet in an aging storage center. Hundreds of thousands were wired into the bank account of a computer store with a glitzy showroom on one of Doral’s busiest thoroughfares.
In just three years, at least $ 25 million in drug money was funneled through 201 exporters by the police sting — just a fraction of the total number of businesses that were used to launder hundreds of millions in the past decade, according to records and former Drug Enforcement Administration ( DEA) agents.
A HAVEN IN THE SUBURBS
In a city that once hosted a famed PGA tournament, the activities have perplexed local leaders. “Obviously, it’s not good for Florida. It’s not good for Doral,” said Mayor Juan Carlos Bermudez. “It’s not representative of the majority of the businesses we have here.”
For decades, the sprawling suburb of 52,000 people — with gated communities and lakes — has been home to export shops that sprung up to meet a booming demand for laptops and cellphones in South America.
Because of the ample office and warehouse space near Miami International Airport — the largest cargo hub in the nation serving Latin America — the number of export shops mushroomed.
Not only was it an ideal place to do business, but it also came to serve the purpose of the cartels.
Unlike traditional laundering that relied on banks to hide who owned the money, this was novel.
Under a system known as the “black market peso exchange,” the drug groups turned to the exporters to launder their cash and make it more difficult to track.
In deal after deal examined by USA TODAY Network, the officers picked up money in New York, Chicago and other cities — in duffel bags and suitcases — and flew it to South Florida, where they stashed it in a police trailer.
What followed was one of the largest undercover operations carried out in the country.
After getting orders, the police delivered the money to the Doral exporters to pay for goods ordered by retailers in Colombia.
The retailers received the goods, then paid back the cartel the same amount — in pesos.
In emails between undercover cops and middlemen, speed was crucial. “They need this transfer — urgent,” read one email in 2011.
At Florida Trading Services, an exporter in a remote office park, the money was wired in a flurry: two dozen transfers totaling $ 724,834, records show.
At GSM City, a computer store about a mile away, hundreds of thousands of dollars were wired.
Across town, a similar scene unfolded at Cellular Next LLC.
At least twice in 2012, an officer posing as a money courier showed up at a storage bay to drop off tens of thousands in cash, large bills wrapped in stacks, and each time, no one at the company asked where the money came from, records show.
Several times, officers delivered the money in discreet locations: $ 10,000 to a man driving a gray Jaguar in the parking lot of a Miami Beach hospital; $ 50,000 to a man toting a young child in a Miami condominium’s lobby.
MISSED OPPORTUNITY
Several export store owners reached by the USA TODAY Network said they were unaware they were targeted by the police and didn’t know the cash dropped at their doors or wired to their accounts was from narcotics deals.
Robert Amsel, a Miami attorney for GSM City, said his client is one of the largest cellphone suppliers in the area. “How are they supposed to know where the money is coming from?”
The owners of Florida Trading Services, which was closed in 2013 after the U. S. government seized money from its bank account, could not be reached for comment. The owners of Cellular Next LLC did not respond to repeated interview requests.
Experts said there were clearly payments in suspicious patterns that should have prompted police to carry out surveillance or seek search warrants of the shops.
Dozens of exporters took in repeated bank transfers in large, round figures from dummy companies created by the undercover officers. In every case, the exporters did not know the shell companies sending the money.
After nearly three years, nothing came of local task force investigation. No criminal charges or civil penalties were imposed.
Instead of seeking wiretaps to capture evidence on the businesses, the police continued to launder and take cuts from the cash for their fees for the service.
Federal agents began a routine audit of the money and found the task force led by Bal Harbour police misspent hundreds of thousands to pay for officers’ salaries, according to Justice Department records, prompting a shutdown of the sting investigation in 2012.
The Miami Herald later reported that the task force members were flying across the country on first- class and premium flights and staying in luxury hotels.
It was the second time a local task force had infiltrated the hub, hauled in millions of dollars and failed to make a single arrest. In 1998, the South Florida IMPACT launched a sting that lasted four years, setting up a front office in the Sevilla Trading Corporation.
Informants helped police carry in duffel bags of cash and deliver them to the export shops. But once again, the unit was harshly criticized by the Justice Department and found to be simply laundering money, records show.
The inability to stem the tide took place while criminal groups were bringing scores of kilos of heroin into the U. S. each month.
In states like Kentucky and New Hampshire, opioid overdoses skyrocketed. “You follow the money and it leads to the drugs — and people dying,” said Michael Levine, a trial consultant and former DEA supervisor.
Levine said local task forces squandered rare chances to bring charges against owners who had been insulated for years. “In all my years of law enforcement, I’ve never heard anything like it.”
After years of letting local task forces take the lead, the federal government stepped in with a series of civil suits in the first effort to slow the brazen laundering.
In 2013, prosecutors in New York filed a lawsuit against a dozen exporters, seven in Doral, accusing them of taking in millions in drug dollars. But that touched only on a small portion of the exporters taking in cartel money.
Records from the last police sting show 49 owners received multiple bank wires in large amounts from dummy companies created by undercover cops. Nearly all are still in business.
TRYING TO HALT THE FLOW
The federal government took a rare step toward shutting down the flow of money in 2015.
For the first time, hundreds of storefronts were ordered to reveal all cash deals of more than $ 3,000 and identify the people who turned over the money. The sweeping order went to at least 700 businesses in and near Doral.
But there was a serious deficiency: It didn’t track the most popular means of moving money — bank wires. Criminal groups could still send millions of dollars into exporters’ bank accounts.
Tobon acknowledged the order missed a critical detail but said information turned over by companies gave agents a deeper understanding of the exporters’ role.
Dennis Fitzgerald, a retired DEA agent who wrote a book on undercover stings, said that unless the federal government presses for a sustained investigation, including tracking bank wires, the laundering will persist.
“The object of the ( drug) trade is to make money. The only way you can use ( the money) is to clean it. The way you clean it is through the businesses. It’s the hub of everything.”