FEDS PAY DRUG CASE WITNESS $2 MILLI0N

Worked Undercover For Two Years

LOS ANGELES (AP) -- The key undercover witness in the nation's biggest
drug money laundering case was paid more than $2 million to help
prosecutors, according to testimony.

The informant, identified in court papers only as CW-1, was involved
in Operation Casablanca. About 40 Mexican and Venezuelan businessmen,
bankers and alleged drug cartel members were arrested in May following
the two-year U.S. Customs undercover operation that spanned several
countries.

During a pretrial hearing Friday before U.S. District Judge Lourdes
Baird, defense attorneys argued that the payments amounted to
government misconduct. The payments provided "perverse incentive for
the informant to manufacture crime," Michael Pancer, representing
defendant Katy Kissel Belfer, argued in a brief filed with the court.

Payment defended as reasonable

Federal prosecutors said the payments were reasonable given the size
of the investigation and the risks taken by the informant.

"He worked full time -- he had to be available 24 hours a day -- for
the entire length of the investigation," Joseph A. Brandolino said.

"For the rest of his life, he has to look over his shoulder," Julie
Shemitz said.

40 arrests; 70 more on the run

In addition to the 40 arrests, 70 people are fugitives in the case,
which alleges tens of millions of dollars in illegal drug profits for
the Cali drug cartel of Colombia and Mexico's Juarez cartel were
shipped through phony transactions to Mexican-owned banks to conceal
their origin.

The indicted banks, including prominent Mexican financial institutions
Bancomer, Banca Serfin and Confia, have denied any wrongdoing.

The first of four trials in the case is scheduled to begin March 29.
Four Mexican nationals pleaded guilty to charges last month.

According to court documents, CW-1, believed to be a naturalized U.S.
citizen born in Colombia, helped undercover customs agents pose as
money launderers.