DRUG TRAFFICKERS

"DAVID"

What has your work been? What's your role in the process?

As a business--to buy money, and sell it for a profit. The money side is a
completely separate business than the drugs. We never got involved into the
drug side of the business, only receiving the money, processing it, selling
it, and making a profit.

So if someone said to you that you were a drug trafficker, what would your
response be?

I didn't know what they were talking about. I think nobody ever told me
that when I was doing that, even to a point that when somebody gave me
money and told me, "This is from the sale of drugs," I wouldn't take it. I
would back out.

But you knew?

Maybe I knew, maybe I didn't. But I didn't want to know. So if you came to
me with a box of money and you told me that this is from the sale of X or
whatever it is, from drugs, I would just tell you see you later. Go on to
the next.

So there is a separation between the world of drug movement and drug sales,
and dealing with the money afterwards?

In some people, yes. Some people are involved in both. But my case, I had
them completely separate.

You're a businessman in the sort of arbitrage, or the buying and selling of
currency?

Buying and selling of currency, yes.

You were doing this mostly in Columbia, or in Florida?

Between the two countries, in Florida and in Colombia, I would travel back
and forth, make the bills there, receive the money here or have someone
else receive them. Process the money, and sell it in Colombia, and make the
difference or profit, and that was it. Pay the person that sold it to me in
pesos.

You say that, in a sense, you were insulated from the drug side of the
business. But the money is what the business is all about.

Yes, I was insulated. But money--that's what it's all about, yes.

So is there the same kind of danger involved in the business?

Of the money? Of course. Yes. Because once I receive the money, I have
bought it already. If I receive $1 million in New York, or two or three,
that's mine. It was up to me to pay him in pesos whatever the exchange rate
we negotiated at the time.

Did you ever have a problem delivering the pesos?

No. That's why we would move a lot of money, because they would trust us,
even though sometimes I had trouble with the dollars, that we would pay
there. So you had to have a cushion, or a little bit of money put aside for
problems that we had sometimes.

What kind of problems?

One time we had people travelling from L.A. to Miami. They would be stopped
at the airport, the money was taken, and they had to sign a receipt like
for $300,000, $400,000, and that was it. Then you had to go and claim the
money in LA. And I wouldn't do that. I would leave there. Cases like that.
Or one time they went into my office, and they stole close to a million
dollars from the office. So I had to pay that too.

I understand. Who stole? Criminals? Or cops?

You don't want to know. I think they were cops.

But you still had to pay the pesos at the other end?

Yes. Because it was a business. We buy the dollar, sell it, make a profit,
and pay them in the pesos. So once I got it, it was my responsibility. It
was mine.

But you can't declare bankruptcy. So it's not a normal business?

Bankruptcy is not an option. So, no, I guess it's not a normal business.
When you look at it that way, it's not. In Colombia, if you declare
bankruptcy, and you owe a lot of people, even in a legit business, you're
going to get killed anyway. It's not that easy to declare bankruptcy in
some countries.

You first got involved in this in the late 1970s. What attracted you to the
business? Was it just because it was easy?

It wasn't because it was easy; it was the amount of profit involved, and
being trusted by people there with a large amount of money. You would make
a nice profit, with a large volume.

But before, you were telling me that the business was a lot easier back
then. How? Why?

Because the banks were involved in the US. They used to help you set up
accounts. They used to help you with their report forms. You know they
would report do that form that you have to fill for the IRS for a company
name that used to be based in Panama or Aruba or one of those places. So
the IRS would get a report, but from a foreign company, not from persons
here. And they used to charge a large fee. So they would protect you, in a
way.

These are US banks?

Yes, US banks. Either way, during the day, boxes of money inside a bank.
They would have rooms set up with counting machines and even employees from
the bank, and if you did it at night, you would drop them into the night
deposit.

You mean you would just go to a night deposit and dump a bunch of cash in
the night deposit?

Yes, in little bags wrapped around with the amount outside, yes.

So you were saying that the US is, in some ways, the easiest country to
launder money in. Why is that?

I think it's the easiest country to open accounts. In a lot of countries,
they required reference letters, passport, cellular ID. They even get your
fingerprints. And here, it's very easy to open an account. If you give me a
passport, I could go and open 200 accounts or more, even to this day, in
200 different banks.

Just make up a Social Security number?

I don't think you need a Social Security number here to open a bank
account. If you are a foreigner, you can put a 9-9-9-9-9 number. That's all
you need. Show them a passport, and you're on your way.

Why is a bank account so important?

To deposit cash or checks. If you open 200 accounts and you deposit less
than $5,000 a month, you're doing a million dollars in one month. Or if you
deposit a combination of checks and cash, then you can deposit a lot more.

Sounds like a lot of work, a lot of driving around town.

That's right. You get to know the town. But it works that way. And you
don't even go to the same bank. If you have a bank account in a bank here
that has a lot of branches, every day you probably go to a different branch
so you don't look suspicious to anybody in the bank.

Do you have a staff of people working for you, or do you do it on your own?

With a staff of people. The same staff that would do checks and would do
the deposits and everything.

So it's basically a small industry of money? How would you describe this
business?

It's like a small industry. It's a business. You buy dollars, sell them for
a profit, and you pay at a set price before you get it. If the guy that you
are buying the money from doesn't like your price, he will go to somebody
else that will give him a better price. So it's not like you are doing it
for him all the time. It's like to the best price you can get.

Where do you negotiate over price?

In Colombia.

So you have an office set up in Colombia?

Yes, an office. Somebody is running the office that would pay the pesos and
handle all the accounts and everything.

And was there a sign on the door that there was a peso-dollar exchange?

Oh, no. Those are the smaller guys, the ones that have the exchange houses.
They buy smaller checks. They buy the $100 that people send you money
orders, for families. There is a lot of money that goes down to our country
from relatives here in this country, stuff like that.

But I'm trying to understand the people who are in your part of the
business. Do you have like a marketplace, where you all meet? Or is there
an exchange place? Or is it underground?

No, they know that you are in the business, and the businesses there need
US dollars. They know that your checks are good, and you could sell them a
check for $200, $300, $400, any amount.

So really, you're servicing the Colombian business community?

That is correct, yes.

How would you explain this to someone who knows nothing about how the
business works?

First of all, the person that you deal with is not here, it's in Colombia.
So they tell you that they're going to take to your office or to your place
of business one million, to say a figure. You receive it in your office,
and then you start processing an output. And it's a business.

How would people deliver the money to you?

It would be in boxes, shopping bags, suitcases. A car. They would give you
the keys and take the car and leave it back here. Or take the car and don't
even bring it back.

And the people who would show up?

You would get a call there--Jose would call you and is going to give you a
million dollars. So you would get a call on the phone or the beeper, and
they would tell you, "Hey, my name is Jose, I have a million, where do you
want to meet?" Or in a lot of instances, I used to receive the people in my
office. They would just come to my office and drop the money. That was
probably the safest way.

And then you have this pile of cash in your office?

Yes. . . . You receive the money, let's say you buy X amount. You start
processing it-- go to a bank, deposit it through your staff or different
people that work for a fee. And then you notify your Colombian office that
you have processed, say, half. You tell them you have a certain amount in
that account, certain amount in that other account, so you can sell a check
for $50,000 from this account, one for $20,000 from the other account. And
that way they state selling the dollars to businesses there. At the end of
that transaction, you make a profit, and then you convert it into dollars,
or you leave it in pesos in Colombia.

And the profit comes from the difference between . . .

From the difference between what you buy it for and what you sell it for.
The differences are always different; it depends on the buyer. The more
they buy, the cheaper you sell it to them. So if you're a tourist and you
want to travel to the US, and they know that you have dollars, if you want
to buy a couple of thousand dollars, it's one price. And you're a business,
you want to buy $50,000, it's a different price, a lower price. It's a
competitive market.

Is there a contract once you come to a deal?

Yes. You receive the money, that's your contract, and you pay it, you make
the difference.

Who do you pay the pesos to?

To whoever the person that sells them to you--not necessarily the drug
dealers. Sometimes it had already changed hands. It happens, a middleman.
The market has various layers to it. It's different all the time. That's
the way it always works.

Before you were doing this, there were other ways. First, you moved the
money by bringing it to banks, and they helped you. But that stopped. Why
did it stop?

They started making it difficult for banks on the forms that they have to
fill for the IRS, so the banks stopped doing the business. And so you would
make checks, then you buy cashier checks, buy money orders, deposit it in
smaller amounts in the banks. Then you still could do up to $9,000 a day in
each account. Then they changed that again. Because then they started
saying, okay, now is not less than ten; it's ten in a month. Then you would
do up to ten in a month in an account. But they kept changing the rules,
and you kept changing with the rule-changing.

In the early days, did you have a favorite banker than you went to see?

Yes, they knew you. You would sit with even the president of the bank. I
think you were considered a special customer, because of the fee they were
charging for the account.

So you remember that it changed, so that you no longer could sit with the
president of the bank?

I think in the early 1980s. After that, we started shipping in bulk. After
the banks didn't want to see you any more, or they didn't want to see
anybody for a fact. . . . Then the IRS started checking more on the banks.
Then you would either ship small checks to our country, foreign banks, or
ship the money in bulk.

You'd just put a box together and ship the money in bulk?

No. You'd get a big container, a 20-foot, 40-foot container--something that
you could sell easy in any country. And half of container was full of
goods--could've been televisions or refrigerators--and then one
refrigerator in the middle would be not a refrigerator. It was all money.

Where would you ship that?

To a couple of the Arabian countries or Panama. It was very easy from the
free zones in those countries, to go to a bank with a huge box and just
deposit there. They had no laws or anything. They would welcome your
business, with no questions asked.

What's the largest amount of money anyone ever delivered to you in the
United States?

Twelve million. It would fill a whole closet in a hotel room. And there
were hundreds, twenties, fifties, fives. Some singles.

You received that because you had a contract to turn it into pesos?

Yes. Yes, I bought that money. Then I started processing it. It used to
take sometimes a couple of months to process $12 million.

On a $12 million exchange like that, how much money would you make?

About $600,000 to 700,000.

That was leftover cash that you could keep?

Or in pesos, there. Sometimes I would sell up to the point where I knew
that I had enough pesos to cover the debt, and I would keep the difference.

Weren't you a little nervous have $12 million in your closet?

I used to stay in different places. I always have somebody watching. Yes, I
was nervous.

So how do you process this $12 million to make it disappear?

At that time, it was a little tougher with the banks, so you would buy
cashier checks, money orders, while you have what they used to call here
the "smurfs." You would give less than ten each person. You would have a
contingent of persons buying checks. They would come back to another room
where they would leave the checks, and go out with some more money--always
less than ten--just in case.

So basically, in the end, this buying and selling of money is the way most
of the money related to drugs is moved back to Colombia?

Back then it was the way, and it changed a little bit over the times. A lot
of the monies move that way still, but a lot of people they still ship it
down in different ways. You can buy a tractor and just find a place where
you put do a box inside, and put one, two, three million inside the
tractor, or another piece of equipment. . . .

Why ship it in bulk, rather than go through a broker?

They got a little bit sophisticated at the end, and a lot of the people
that were probably involved in drugs started getting involved in the money.
They would make more money that way. So they wanted to see their dollars.
And usually when you sell currency, you probably get a little more pesos
for it than checks.

So there are some people who have an integrated system?

Yes, they do both. . . .

Is this process illegal in Colombia?

Money exchange, in a way, it's what is called the black market. It is kind
of illegal there, yes. . . . Because the Colombian government would not
sell you US dollars. Only if you have an import license, or if you were a
tourist, you want to come to the US, they would sell you up to $2,000 per
person. . . .

How important is this drug money--to business in Colombia?

A lot of businesses need their dollars to operate. I think it's very hard
to buy US dollars, unless you have an import license, and then you got to
pay too many duties, and then the paperwork is very complex in Colombia. To
import anything, it's not easy.

So this was a way for business to get around regulations? Do they,
therefore, feed off the narcotics business, in a sense?

They do it to get around regulations from the Colombian government, yes.
They feed off the narcotics business without accepting it, yes. They never
knew anything about the narcotic business. Between businesses and what we
were doing--that we had our businesses selling money--you don't talk about
drugs or anything like that. You talk about US dollars, amount, what you
would sell it for, what they would pay for it. It's a regular business.

Is it expanding?

I don't really know anymore what the numbers are. I don't know if it's
expanding or getting smaller. But as long as there are people who consume,
I guess the drugs are going to come in, and the money business is still
going to be alive for people that. . . .

[part of a series]

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To watch Part one of Drug Wars, go here:

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To see part 2, go here:

http://www.crrh.org/hemptv/docs_drugwars2.html

Click this link for an index to this series:
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