How The Government Set Up A Fake Bank To Launder Drug Money | WAMU 88.5 - American University Radio

How The Government Set Up A Fake Bank To Launder Drug Money

Play associated audio

In the early 1990s, Colombian drug cartels had a problem: They had more money than they knew what to do with.

"They were having a very difficult time with just the logistics of laundering millions and millions and millions of dollars every week," says Skip Latson, who worked for the DEA at the time.

So Latson and Bill Bruton, who was a special agent with the IRS, hatched a plan: They'd create a fake, offshore bank catering to the needs of the drug cartel.

Latson and Bruton got their bosses to sign on. Soon, RHM Trust Bank was up and running on Anguilla, an island in the Caribbean.

With the help of a South American informant, the bank started getting customers. The big Colombian cartels would send a fax saying they had cash in New York City or wherever. Someone would arrange a pickup, and the cash would be deposited in an account at the fake bank.

The money laundering world was surprisingly vast and sophisticated, with money hidden in the normal flow of international trade, in payments for things like tractor parts.

Latson and Bruton started collecting phone numbers, names and evidence, and pieced together how it all worked. One particularly effective trick: When some shadowy figure asked to withdraw money, they would stall for a day or so. That would often prompt the true owner of the account to call up and demand his money.

"We picked up more information by being a bad bank who didn't handle money quickly and effectively," Latson says.

The fake offshore bank was so successful, Bill and Skip eventually had to shut it down, for fear their cover might be blown.

In the end, 117 people in four countries were arrested in what became known as Operation Dinero. Usually, the secrecy of the offshore world makes life hard for people on the law-enforcement side. But this time, for a moment, the secrecy worked the other way. It made a sting operation possible.

And, while the operation clearly didn't end the drug trade or money laundering, Bruton and Latson say it at least made drug dealers wary of using banks to launder their money.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

In Tom Hanks' iPad App, Typewriters Make Triumphant Return (Ding!)

For iPad users who are nostalgic for the clickety-clack of keystrokes and "ding!" of the carriage return, Hanks has created Hanx Writer, an app that simulates using a typewriter.
NPR

New U.S. Rules Protect Giant Bluefin Tuna

To reduce the number of giant bluefin tuna killed by fishing fleets, the U.S. is putting out new rules about commercial fishing in the Gulf of Mexico and parts of the western Atlantic.
NPR

Old Ship Logs Reveal Adventure, Tragedy And Hints About Climate

Volunteers are combing through old ships logbooks for The Old Weather project. It aims to help scientists better understand the climate today by looking at conditions of the past.
NPR

The Troubling Implications Of The Celebrity Photo Leak

To learn more about the recent celebrity photo hack, Melissa Block speaks with Matthew Green of Johns Hopkins University. They discuss how the photos might have been obtained.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.