3 CONVICTED OF LAUNDERING DRUG MONEY

A Los Angeles federal jury convicted three Venezuelans--a banker, a lawyer
and a businessman - on Monday after a trial climaxing the biggest narcotics
money laundering case in U.S. history.

The five-week trial was an outgrowth of Operation Casablanca, a lengthy
undercover probe that targeted Mexican and Venezuelan banks along with
money launderers for the Juarez and Cali drug cartels.

Those convicted Monday were among 100 foreign citizens and three Mexican
banks indicted last year on money laundering charges. Sixty people remain
fugitives. Prosecutors also seized about $60 million from the U.S. assets
of 14 foreign-based banks whose employees were implicated in the case.

The investigation, conducted by the U.S. Customs Service with the help of a
Colombian-born drug dealer turned informer, also sparked a major diplomatic
flap with Mexico. Officials there complained that they were kept in the
dark about a probe on their own soil.

After deliberating two days, the Los Angeles jury returned guilty verdicts
Monday on all counts against Carmen Salima Yrigoyen, 45, an attorney and
former judge from Caracas; Carlos Izurieta Valery, 54, an investment
broker, and Esperanza de Saad, 56, who operated the Miami office of the
government-owned Banco Industrial De Venezuela.

Salima and Izurieta were accused of directing the undercover agents to
supposedly crooked bankers through whom the agents laundered $9.5 million
in drug money.

De Saad, accused of helping to launder $4 million of those funds, protested
that she was illegally entrapped. She is a member of a politically
prominent Venezuelan family. Her brother, Luis Raul

Matos Azocar, is a former Venezuelan finance minister who served in the
national legislature, as did her father.

Judge Bernard Friedman allowed de Saad to remain free on $1-million bond
while he considers a previous motion for acquittal on grounds of
insufficient evidence and illegal entrapment. Prosecutors had asked that
she be jailed immediately.

Salima and Izurieta were taken back to the federal Metropolitan Detention
Center, where they have been held without bail since their arrest in May
1998. Assistant U.S. Attys. Duane R. Lyons, Robert E. Dugdale and Diana L.
Pauli, who prosecuted the case, expressed satisfaction with the jury's
verdict convicting Salima on 23 criminal counts and Izurieta and de Saad on
11 each.

Lyons, the lead prosecutor, said in response to a question that he is
"concerned" that the trial judge is still considering de Saad's motion for
an acquittal. "We see no reason to disregard the jury's verdict,"

Lyons said. Friedman promised to issue a written ruling soon.

The three defendants are scheduled to be sentenced in April. Under federal
sentencing guidelines, Salima faces a term of about 10 years in prison, and
de Saad and Izurieta could each receive terms of eight to 10 years.

After her conviction, an angry de Saad complained to a reporter of being
deceived by Salima as well as the undercover agents.

In secretly recorded video and audio tapes played for the jury, Salima told
the undercover agents that de Saad and Izurieta knew that the money came
from illicit sources, though she cautioned the agents not to specifically
mention drug money when talking to the pair.

Izurieta's lawyer, William S. Harris, told the jury that Salima's remarks
incriminating his client were "a lot of malarkey," and de Saad's attorney,
Joseph C. Beeler, said Salima was given to wild statements that "cannot be
trusted." They also accused the government's undercover operative, Fred
Mendoza, of dropping only vague, unintelligible hints that the money
belonged to Colombian drug dealers, a claim denied by prosecutors.

Last month, an associate of Salima, Jose Perez, pleaded guilty to a
conspiracy count in a deal with prosecutors on the eve of trial. He was
sentenced to time already served and was allowed to return to Venezuela.

Two others indicted in the Venezuelans' case - Marco Tulio Henriquez, a
vice president of Banco del Caribe in Caracas, and Roberto Vivas, described
in court documents as a representative of International Finance Bank - are
fugitives.

All six were accused of laundering drug proceeds in 1997 and 1998 through
Banco Industriale de Venezuela, Banco del Caribe, International Finance
Bank and Banco Consolidado.

Central to the prosecution's case were the secretly recorded video and
audio tapes in which Mendoza sought the defendants' help in moving millions
of dollars from the United States to Colombia.

Mendoza, who was paid $2.1 million by the Customs Service, posed as the
leader of a ring of Los Angeles-based money launderers. Using Mendoza as a
front man, undercover customs agents were able to win the confidence of
Mexican and Colombian drug syndicates. The agents traveled across the
country picking up $50 million to $60 million in cash from illegal drug
sales, then laundered the money into the banking system with the help of
Bank of America's Los Angeles office.

Ninety percent of the money eventually was funneled back to the drug
cartels, usually in the form of difficult-to-trace cashier's checks issued
by banks in Mexico and Venezuela. The Customs Service kept the remaining
10% as a commission, with a fifth of that amount going to Mendoza.

Defense lawyers directed much of their fire at Mendoza's compensation and
the fact that he stands to get several million dollars more as a bonus.

Although Mendoza was not on trial, prosecutors were forced to defend him
and his handling by the Customs Service.

Steve Lovett, a customs agent, said he conducted a background check on
Mendoza in 1995, finding only that Mendoza had laundered money while
running an emerald business in Los Angeles' downtown jewelry district
during the 1980s. But during cross-examination, the agent acknowledged
having written a recruitment memo describing Mendoza as someone familiar
with trafficking narcotics as well as money laundering. Lovett said he
could not explain the discrepancy.

Federal prosecutors did not learn until March 1999 that Mendoza had also
helped the Cali drug cartel airlift tons of cocaine into Mexico in the
early 1990s.

The belated discovery caused considerable embarrassment to the prosecution
in the related trial earlier this year of six Mexican bankers and
businessmen. Mendoza's credibility was a big issue in that case, which
ended with the jury convicting three defendants and acquitting three others.

Of the 100 individuals indicted last year, 60 remain fugitives. Most of the
others were lured to the United States and arrested under various ruses,
including a gala at a Las Vegas gambling casino. As some of the male guests
were getting ready to cap off the night with a trip to a Nevada bordello,
agents swooped down and arrested them.

All told, 40 suspects were taken into custody. Thirty-one people, including
money launderers for the Juarez and Cali drug cartels, pleaded guilty
before their trials.

Also pleading guilty to money laundering charges were two of Mexico's
largest banks, Bancomer and Banca Serfin. The banks agreed to pay a
combined $14.6 million in fines and forfeitures. A third Mexican bank
indicted, Banco Confia, agreed to a civil settlement and forfeited $12.2
million in exchange for dismissal of the criminal charges.

Of the 11 other Mexican, Venezuelan and Spanish banks whose U.S. assets
were seized, one has successfully fought the confiscation. Last summer,
Banco Mercantil del Norte, one of Mexico's largest banking institutions,
forced the U.S. government to back down from its $7.3-million forfeiture
action.