Transnational Money Laundering—Operation Rainmaker

A two-year undercover investigation known as Operation Rainmaker has culminated in the dissolution of “a major money-laundering operation,” the arrests of 24 people, and the seizure of $7.5 million in alleged drug profits.^[1] Eight of the suspects, “including the group’s alleged ringleaders,” were arrested in Colombia, while the other 16 individuals were arrested in New York, Philadelphia, Miami, and Puerto Rico.^[2] There are six other individuals who are at large.^[3] The Colombians will no doubt be the subject of an extradition request.

52 pounds of cocaine and 4 pounds of heroin were seized during the arrests, but “officials said the ring’s primary business was profiting from laundering money on behalf of drug cartels.”^[4] Typically, money laundering charges are brought as ancillary charges to larger drug-trafficking or fraud charges; in this case, it seems that the money laundering charges are the primary charges.

The ring allegedly “used a complex system known as the black-market peso exchange to repatriate as much as $7 million a week in drug money,” proceeds that were allegedly “from drug sales made in dollars in several cities—including New York, Atlanta, Miami, Philadelphia, Puerto Rico, and Brockton, Mass.”^[5]

Following the pick-up of U.S. currency, “an equivalent amount of Colombian pesos was delivered to the organization in Colombia.”^[6] Following that delivery, the dollars were “then delivered to undercover agents, who … deposited the funds in various financial institutions, primarily in the United States.”^[7] That money was allegedly then “electronically transferred to a bank account in Lilburn, Ga., where the funds were used to pay for textiles being exported legally to Colombia.”^[8]

Under 18 U.S.C. § 1956(a)(1)(B)(i), it is a crime to conduct a financial transaction which involves the proceeds of unlawful activity (such as drug trafficking) knowing that the transaction is designed to conceal or disguise the nature, location, source, ownership, or control of the proceeds of that activity. The punishment for this type of money laundering is a fine, imprisonment for up to 20 years, or both.

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[1] Joshua Goodman, 24 Arrested in Money-Laundering Bust, Associated Press (via Miami Herald), Apr. 28, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] ICE, 30 Individuals Charged in Trade-Based Money Laundering Scheme, Apr. 27, 2006.
[7] Goodman, supra note 1.
[8] Id.