BAY AREA BRACES FOR 'DIRTY' MONEY

TALLAHASSEE - A bipartisan legislative task force on money laundering does
not endorse additional funding as a solution.

The Florida Department of Law Enforcement has assigned 16 special agents to
fight money laundering in the Tampa Bay area, the financial center of
Florida's Gulf Coast.

But their focus on money laundering is secondary to narcotics and white
collar crime.

That may change soon, however, as money launderers in the southern end of
the state scout for safer areas in which to cleanse the proceeds from drug
transactions and fraud.

Much of the blame for the migration can go to folk such as Tom Hunker, the
burly commander of the South Florida Interagency Metropolitan Anti- Crime
Task Force, or IMPACT.

With 70 sworn investigators, Hunker's operation seized $41 million in
narcotics money and 16,000 pounds of cocaine and made 103 arrests in 1998.

The successful money laundering crackdown in Miami has cities such as
Tampa, Orlando and Jacksonville bracing.

People in law enforcement liken it to a balloon: squeeze hard on one end
and the other end bulges.

Money laundering is "not something we've had a tremendous amount of
experience with in the last few years," says Charles Guthrie, the special
agent in charge of the FDLE's economic crime unit in Tampa.

"But it's something we're starting to see more of."

Tampa has become a central cleansing point for money from drug deals that
take place from Miami to Texas, said Guthrie.

A typical case - and one of the biggest in the area - involved Rafiel
Mendez, Guthrie said. According to FDLE officials, Mendez, a convicted
felon then living in Tampa, was arrested five years ago and charged with
attempting to launder $374,000 of a $1 million cache of drug money from
Houston through legitimate local businesses and banks.

In a plea bargain, FDLE said, Mendez admitted to a weapons possession
charge and was sentenced to less than three years in prison.

Even bigger than narcotics-related money laundering is illegal sports
betting, which generates millions of dollars across Central Florida each year.

Then there is the emergence of the Russian mob in Tampa immigration
schemes, the sex trade, and "every kind of fraud known to man," including
check, credit and bank and mortgage fraud, said Ken Sanz, a 28-year veteran
FDLE agent who specializes in Russian and Asian organized crime.

Meanwhile, because of a recent crackdowns along the Mexican border, drug
traffickers, particularly from Colombia, have been returning to their
former Florida haunts, pushing the state to the nation's forefront of money
laundering activity.

NO FIRM NUMBERS on money laundering exist, though authorities estimate that
at least $125 million is laundered through Miami each month, placing it
second only to New York City.

Although the problem is said to be growing in Central Florida, statistics
from the Department of Justice show a steady decline in the number of money
laundering cases prosecuted at the federal level.

Five years ago, authorities prosecuted 50 cases of money laundering and won
convictions in 74 percent of those cases. By 1998, that number had dropped
to 11 cases, with an 83-percent conviction rate.

The state has been "slow to come up with a tactic that targeted the right
thing," says James McDonough, Florida's newly appointed drug czar. "The
center of gravity is the money," he said.

That money laundering is a growing problem in Tampa and across the center
of the state, and that law enforcement may be unprepared for it, has caught
the attention of state lawmakers who created a task force this year to
study what might be done.

The chairwoman of the task force, Ginny Brown-Waite, R- Spring Hill, said
the state's slowness stems from its approach, which has been geared more to
drug seizures and building new prisons than to going after the money. "If
you can cut off their access to money, you can shrink the drug trade,"
Brown-Waite asserts.

Brown-Waite's committee has traveled around the state holding a series of
hearings, listening to the concerns of law enforcement, government agencies
and business interests.

On Friday, the task force presented a draft of its findings and a list of
recommendations. A final report is expected to be presented to the
Legislature this month.

The task force found there's been a surge in illegal money seized on the
state's highways. In 1995, for example, $4.61 million was seized by the
Florida Highway Patrol along the Interstate 95 and Interstate 75 corridors.
That number more than tripled to $18.5 million in 1998.

The task force also found major gaps in airport and seaport security,
making it easier for money launderers and drug traffickers to enter the state.

The task force's proposals range from offering rewards to informants to
creating a new law that would permit authorities to slap a 10-day freeze on
bank accounts of suspected money launderers to give investigators time to
gather evidence. The panel also endorsed toughening laws that would
lengthen prison sentences for money launderers.

It's been 12 years since the state's existing money laundering laws were
enacted. And some of what has been attempted has failed, notes the task
force. In March 1994, for example, the state Supreme Court struck down as
unconstitutional a sales tax on illegal drugs. While that law was in place,
the state collected $2,307,539, according to the Department of Revenue.

The new state initiative comes at a time when federal authorities also are
gearing up for a renewed crackdown.

THE federal strategy includes tougher reporting requirements for banks and
other financial institutions required to file suspicious activity reports -
a move prompted by the scandal involving the movement of $7.5 billion
through the Bank of New York from Russia.

Florida also is considering new reporting requirements for financial
institutions, and some of those requirements are viewed unfavorably by
businesses.

Former state Supreme Court justice and lobbyist Wade Hopping, whose client
list includes Travelers Express, said such measures as the elimination of a
15-day notice of an impending audit could be unfair and also fail to stem
money laundering.

"Three or four [of the proposals] really gave us serious heartburn,"
Hopping added.

"We just didn't want them to walk in any day and expect to have books and
records ready for inspection."

Anthony DiMarco, vice president of government affairs for the Florida
Bankers Association, said additional reporting requirements could unfairly
burden an industry already doing its best to help stop laundering.

"Banks are the first line of defense in money laundering," DiMarco said.
"We're complying with what we need to comply on. We're making improvements
... but banks cannot be policemen."

Last year in Florida, banks submitted more than 800,000 documents reporting
suspicious movement of money, DiMarco said.

Even if the recommendations of the task force are adopted, however, law
enforcement may still lack the resources to carry them out.