MONTREALERS ACCUSED OF MONEY LAUNDERING

Colombian Drug Profits Allegedly Routed Through Canada

Five Montreal residents were arrested yesterday in connection with an
international crime ring that allegedly laundered Colombian drug profits
through Canada and the United States.

The arrests were part of a massive multi-agency sweep that saw 34 people
charged in cities around the globe.

The two-year joint investigation, which also recovered US$20-million worth
of illicit drug profits, involved members of the RCMP, the U.S. Drug
Enforcement Administration, London's National Crime Squad and police in Bogota.

"Those who choose to help hide the proceeds of illicit drug trafficking are
as much a part of the problem as those who bring the drugs into this
country, and they will be dealt with accordingly," said John Ashcroft, the
U.S. Attorney-General, who announced the arrests yesterday alongside
numerous officials, including Superintendent Michel Cabana, the head of
national and border security for the RCMP in Quebec.

Authorities yesterday also unsealed a 48-page indictment that outlines how
the organization -- using banks in North America and Europe -- laundered
cash through the Colombian Black Market Peso Exchange, an underground
operation that allows Colombians, mainly business people, to purchase U.S.
currency without having to pay taxes and transaction fees.

Under the scheme, drug traffickers who have large profits in North America
trade their U.S. currency with a "peso broker," who is then responsible for
laundering the cash.

In most cases, the indictment charges, the broker works with a
"second-tier" broker who collects the drug proceeds from the traffickers'
associates and funnels it into the international banking system. A
"third-tier" broker later trades that money for pesos with people back in
Colombia.

"In an effort to conceal the true nature of these transactions, dealings
between the Colombian dollar purchaser and the peso broker are almost
always based only on verbal agreements and conducted without any
paperwork," the indictment reads.

According to prosecutors, the five Montreal men implicated in the scheme
worked for Colombian drug lords, gathering the cash in Canada that was
eventually given to the "second-tier" peso brokers.

Some of that money, the affidavit says, was unwittingly given to a U.S.
undercover officer who had infiltrated the gang of "second-tier" brokers.

Charged with conspiring to launder the proceeds of crime are Juan Carlos
Ellis, 42; Hugo Palma, 43; Yip Oi Man, 48; Giovanni Di Rienzo, 43; and
Gerardo Palma, 32. All are facing extradition to the United States to face
the charges in New York.