MEXICO DENIES MONEY LAUNDERERS KNEW TOP OFFICIALS

MEXICO CITY, July 31 (Reuters)- Mexico on Friday denied claims by suspects
detained during a recent U.S. government sting operation that they had
connections to high-ranking Mexican authorities and army officers.

U.S. judicial authorities have tapes of several suspects arrested in the
May sting known as Operation Casablanca boasting to American undercover
agents of their ties with top Mexican government officials, the Attorney
General's Office (PGR) said in a statement.

Operation Casablanca, the biggest money laundering crackdown in U.S.
history, resulted in the arrest of some 150 people including 26 Mexican
bankers, and $50 million seized in drug profits from Mexican and Colombian
cartels.

But the PGR said the suspects were simply making up stories about friends
in high places to make them appear powerful enough to persuade drug
traffickers to do business with them.

``This is part of a pattern of behaviour among criminals dedicated to drug
trafficking and money laundering, in order to make it appear they are
capable of the operation, they claim relations they do not have with
officials that they don't even know,'' the statement said.

The PGR said Mexican police had recently arrested two suspects in the money
laundering operation, Arturo Pacho Ruiz and Ignacio Marquez Robles, who
made similar claims but told authorities upon arrest they had made up their
stories.

``They unequivocally and categorically admitted not having any such
contacts and said they lied in order to facilitate their illicit
operations,'' the statement said.

Mexico said it wanted to interview one suspect currently held in the United
States, Victor Manuel Alcala Navarro, about his claims he had ties to top
officers of the Mexican army, charged with the war on drugs in Mexico, and
the government.

The PGR described Alcala as a known drug-trafficker and money launderer of
the Juarez Cartel in northern Mexico, but said his statements contained
``inaccuracies.''

Mexico reacted angrily to the Casablanca operation, which took top
officials here by surprise and deeply embarrassed them. Mexico has said its
sovereignty was violated by U.S. agents that worked here during the
three-year operation without the full knowledge of Mexican authorities.

The United States has apologised for the operation but also called it a
great blow to drug traffickers.

Mexico is the main transit route for cocaine and heroin coming from South
America to the United States and a major supplier of marijuana.

Checked-by: Mike Gogulski