MONTREALERS CHARGED IN MONEY-LAUNDERING RING

Montreal -- Five Montrealers have been arrested and are among 31 people
charged with being part of a massive money-laundering ring that processed
tens of millions of dollars in cocaine and heroin profits from Colombian
drug traffickers.

Investigators traced at least $100-million (U.S.) to the money-laundering
scheme, which used a black-market currency exchange system to move funds
from Medellin, Colombia, to bank accounts as far away as Israel, Hong Kong
and the Cayman Islands.

The investigation involved undercover work and wiretaps. Details were made
public in an indictment unsealed this week in Manhattan by U.S. federal
prosecutors.

The indictment says that the five Montreal residents are among a group of
16 defendants who "acted as the Colombian narcotics traffickers' operatives
in the United States and Canada, gathering drug proceeds."

However, the indictment added, while the defendants believed they were
delivering their bosses' money to money launderers, they were instead
"providing them unwittingly to . . . law enforcement officers acting in
undercover capacities."

They were arrested as part of Operation White Dollar, a two-year joint
investigation by the U.S. Drug Enforcement Administration, the RCMP and
law-enforcement agencies in Colombia and Britain.

Operation White Dollar targeted a money-laundering scheme known as the
Colombian Black Market Peso Exchange.

The indictment says the money was processed by a series of middlemen,
starting with money brokers in Medellin, who secured contracts from
narcotics traffickers to launder millions of dollars of drug proceeds
earned in the United States and Canada.

The dollars were exchanged for Colombian pesos that arrived in bank
accounts in Bogota and Medellin and were delivered to the Colombian
underworld in armoured cars.

The five Montreal defendants are Juan Carlos Ellis, 42; Hugo Palma, 43; Yip
Oi Man, 48; Giovanni Di Rienzo, 43; and Gerardo Palma, 32.

The U.S. court document alleges that Mr. Ellis collected more than
$2.5-million (U.S.) in drug money from 2002 to 2004, some of which he
received from Hugo Palma and Gerardo Palma.

The indictment said Mr. Di Rienzo had $290,000 in drug proceeds in his
possession in 2002.

Also, the document said, last February, Mr. Yip was in Queens, N.Y., where
he had with him nearly $99,900 in drug profits.

Organized crime commonly relies on unassuming people to act as couriers.

An RCMP spokesman said the five arrested Montrealers were low-profile
figures, with only one having a previous criminal record, for a minor offence.

RCMP Constable Michel Blackburn said the Montreal men are alleged to have
handled a total of $1.8-million (U.S.) and $455,000 (Canadian) in drug
money, with the funds ending up in bank accounts in England and the Cayman
Islands.

The money from the drug proceeds was initially collected in bags or
suitcases, the indictment said. In one case, a courier showed up at New
York's JFK airport with more than $167,000 in drug money stashed inside the
metal tubing of luggage carriers.

Failed deliveries appeared to have been dealt with in a ruthless fashion.
According to the indictment, police wiretaps overheard two men in Colombia
discussing kidnapping relatives of someone who was responsible for $400,000
(U.S.) in drug money that had been seized by authorities.