Tapes to Play Key Role in Money-Laundering Trial

As the Operation Casablanca money-laundering trial got underway in earnest Tuesday, a federal prosecutor told jurors that secretly recorded video and audiotapes will demonstrate conclusively that the six Mexican defendants eagerly participated in a scheme to launder millions of dollars in drug cartel funds.

But defense lawyers countered by branding the tapes misleading and incomplete, insisting that their clients were duped into believing they were involved in legitimate investment transactions.

One defense lawyer also charged that his client went along with the money laundering because of implied threats by an undercover government informant.

The tapes are at the heart of the prosecution’s case in the first of four Los Angeles federal court trials stemming from the U.S. Customs Service’s two-year probe into international drug money laundering.

Hidden video cameras recorded numerous meetings between Mexican bankers and undercover agents at the Santa Fe Springs offices of Emerald Empire Co., a front set up by customs agents posing as money launderers for the Cali drug cartel.

Aided by a paid informant with past ties to the drug world, the agents were able to build criminal cases against more than a score of Mexican bankers and three of Mexico’s most prominent banks.

The six on trial Tuesday are all that remain of the original cast of defendants in the case against Mexican bankers. The others have either pleaded guilty or are fugitives. Two banks, Bancomer and Banca Serfin, entered guilty pleas, and a third, Confia, was dropped in a civil settlement with the government.

Outlining the prosecution’s case, Assistant U.S. Atty. Duane R. Lyons provided jurors with a primer on the drug cartels’ money-laundering methods. It was the cartels’ increasing reliance on untraceable drafts issued by Mexican banks that inspired the probe, he said.

Lyons gave much credit for the success of the investigation to the government’s principal undercover operative, a onetime associate of Colombian drug dealers who went by the false name of Javier Ramirez.

Ramirez, Lyons said, was able to win the confidence of the Juarez drug cartel’s top money launderer in the United States who, in turn, helped the customs agents penetrate the Mexican banking establishment.

Bankers recruited to the scheme were lured from Mexico to Santa Fe Springs for meetings with Ramirez and the undercover customs agents. According to Lyons, the suspects were also advised that they were being asked to launder money for the Cali cartel.

In their opening statements, however, defense lawyers challenged the prosecution’s version of events.

Michael Pancer, who represents Katy Kissel Belfer, portrayed his client as a victim of illegal entrapment by Ramirez and other participants in the sting.

He said Kissel was recruited in Mexico but did not learn that she was being asked to launder money for the Cali cartel until she arrived in the United States. A driver sent by Ramirez to pick her up at the airport broke the news, her lawyer said.

“Katy wanted to turn around and go straight back to Mexico City,” Pancer said. “She hated drugs and wanted nothing to do with laundering drug money.”

At the same time, however, she feared angering her hosts, who represented themselves as members of “as ruthless a narco-cartel as exists in the world,” said Pancer.

He quoted Ramirez as telling her, “I work for some very bad people in the Cali cartel. They’re fine when you’re their friends, but you don’t want them as your enemies.”