Bank to forfeit $950,000 in money laundering

Miami branch failed to report suspicious transactions in drug case

October 02, 2003|By Gail Gibson | Gail Gibson,SUN STAFF

A New York bank agreed yesterday in U.S. District Court in Baltimore to forfeit $950,000 for failing to report a series of suspicious transactions that federal authorities said could have helped fuel a vast underground system used to launder international drug profits.

The Miami branch of Delta National Bank and Trust Co. was identified as having failed to file the required reports during a broad investigation of drug-money laundering led by U.S. Immigration and Customs Enforcement agents in Baltimore.

The undercover investigation, dubbed Operation Laundry Chute, chiefly targeted Colombian drug traffickers who use a system known as the "Black Market Peso Exchange" to launder profits from illegal drug sales.

The multistate investigation has led to more than 30 arrests and resulted in the seizure of 1,223 pounds of cocaine, 90 pounds of heroin and more than $36 million in drug profits.

Yesterday in Baltimore, Delta Bank President John D. Landers appeared before U.S. District Judge J. Frederick Motz to enter a guilty plea on behalf of the institution for its role.

Landers acknowledged that the bank had failed to file suspicious activity reports with the Treasury Department's Crimes Enforcement Network on a series of foreign currency exchange transactions that federal prosecutors said totaled $5 million to $10 million.

Those transactions, which dated to 1998, involved a bank customer who operated an independent currency exchange system in Bogota, Colombia.

The customer was not identified in court records filed by prosecutors, but authorities said his business has been identified by banking regulators as being "high risk" for involvement in money laundering and other criminal activities.

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