CHARGES FILED AGAINST FORMER MEXICO OFFICIAL

Millions allegedly laundered here

Mexico's former deputy attorney general, who has been held under house
arrest in New Jersey for more than four years, has been charged here with
laundering more than $9 million in drug money through a Houston bank.

A 25-count federal indictment unsealed Friday accuses Mario Ruiz Massieu of
using an intermediary to deposit the drug payoffs at Chase Bank of Texas,
then known as Texas Commerce Bank, between 1993 and 1995.

"He is the highest-ranking Mexican official we have ever implicated in a
scheme like this," Shelley Altenstadter, special agent in charge of the
Houston office of U.S. Customs Service, said in a news conference Friday.

"We are very pleased to have arrested Mario Ruiz Massieu last night in
Newark."

Federal officials took Ruiz Massieu, a member of a prominent Mexican
political family, into custody Thursday night at his Palisades Park, N.J.,
home.

U.S. Magistrate Judge Joel Pisano in New Jersey set bond at $500,000 and
ordered that Ruiz Massieu be flown to Houston within the next 10 days.

Ruiz Massieu was first arrested in March 1995 as he was trying to board a
flight to Madrid at the Newark International Airport. Customs officials
said he failed to declare $46,000 in cash, though that case was eventually
dismissed.

However, he had been under house arrest while defending himself against
U.S. attempts to extradite him to Mexico, where he has been charged with
embezzlement among other charges.

The Associated Press quoted his defense attorney, Cathy Fleming, as saying,
"I'm not surprised. We've been hearing rumors about it for years and years
and years.

"I'm disappointed in the government, that they continue to hound this man
who has prevailed in so many proceedings."

She said the criminal case is identical to the civil forfeiture case
against Ruiz Massieu that was tried in Houston more than three years ago.

In that case, a federal appellate court upheld the government seizure of
more than $9 million in cash deposited in the Houston bank. Ruiz Massieu
was not charged with a crime in connection with the money, but had to
defend himself against an allegation that it was illegal drug money.

A jury decided the government could keep $7.9 million of the money, and
Ruiz Massieu $1.1 million. But U.S. District Judge Nancy Atlas later ruled
that the government could seize all $9 million.

Customs officials and the FBI are still looking for the alleged
intermediary, Jorge Stergios Gomez. Stergios has not been charged but
authorities want to question him about the deposits.

"We would like to locate him and discuss with him what he knows about these
deposits," Altenstadter said.

Prosecutors say the money was funneled from drug traffickers, including
kingpin Amado Carrillo Fuentes, to Mexican federal police officers, who
then passed it on to Ruiz Massieu.

"It was for protection of the drug cartel," Altenstadter said.

Prosecutors allege the scheme began in December 1993 when Ruiz Massieu
opened an account at Texas Commerce Bank with a $40,000 deposit.

Stergios, said to be a confidant of Ruiz Massieu, allegedly stuffed small
denomination-bills -- such as $20 and $100 -- into cardboard boxes and
suitcases and made 26 deposits at the Houston bank from March 1994 through
February 1995.

Stergios deposited $479,280 in cash on March 2, 1994, according to the
indictment. He continued to make huge cash deposits until Feb. 14, 1995,
when he deposited $416,000, according to the indictment.

Customs officials were suspicious of the deposits, but could not make a
case until they could prove it was linked to drug trafficking, Altenstadter
said. However, officials declined to say how they were able to make the case.

Altenstadter said they were able to track the amount of deposits Ruiz
Massieu moved into Houston through forms -- called currency monetary
instrument reports -- that Stergios filled out at the bank.

Federal law requires people who deposit $10,000 or more in cash to fill out
the form. The bank then reports the deposit to U.S. Customs.

On the forms, Stergios said he was depositing the money for Ruiz Massieu.

Ruiz Massieu has said the money came from generous Mexican government
bonuses paid by the administration of then- President Carlos Salinas de
Gortari and from his family's fortune.

Ruiz Massieu is the brother of Jose Francisco Ruiz Massieu, the No. 2
official of the ruling Institutional Revolutionary Party, who was
assassinated in September 1994.

In Mexico, Mario Ruiz Massieu has been charged with obstruction of justice,
embezzlement, illegal enrichment, money laundering and crimes against
health for his alleged collaboration in drug trafficking, according to a
statement by federal Attorney General's Office in Mexico.

The Associated Press reported that the Mexican government has accused Mario
Ruiz Massieu of obstructing the investigation into his brother's death.