Operation Greenback

Operation Greenback was a Miami, Florida-based, multi-agency U.S. government task force targeting money laundering connected to drug trafficking.^[1]

Formation and composition

The operation was established in response to the explosive growth of money laundering in South Florida following the increase in drug trafficking in the region.^[1][2] A 1979 cash-flow study by the Federal Reserve Bank found that Florida had a $5.5 billion cash surplus at a time when the rest of the country had a cash deficit.^[1][2]

The interagency task force was formed in late 1979 at the suggestion of the Treasury Department^[2] and launched investigations in 1980.^[3] The task force was the first interagency group set up to combat money laundering.^[4]

It was composed of investigators from the Justice Department (Narcotic and Dangerous Drug Section) and the Treasury Department (Internal Revenue Service (IRS) and U.S. Customs Service).^[1][2] The task force cooperated with the U.S. Attorney's Office for the Southern District of Florida and the Drug Enforcement Administration (DEA).^[3]

Investigations and prosecutions

Investigators reviewed currency transaction reports (CTRs) and currency and monetary instrument reports (CMIRs)^[3] to identify violations of the Bank Secrecy Act.^[1][2] The operation resulted in a large number of federal seizures of cash bound for Colombian drug cartels.^[2] For example, in November 1980, agents seized $1.6 million in suspected drug profits and two aircraft after intercepting alleged traffickers at the Opa-Locka Airport.^[5] In October 1982, investigations raided a cocaine production laboratory in Miami, recovering $3 million and 40 pounds of cocaine, and arresting 11 people.^[6] In 1983, the operation expanded to Puerto Rico.^[7]

Major figures prosecuted as a result of Operation Greenback included Hernan Botero Moreno, Isaac Kattan Kassin, and Alberto Barrera Duran.^[1] Kattan, a naturalized Colombian citizen based in Los Angeles , was an associate of drug barons Miguel Ángel Félix Gallardo and Juan Matta-Ballesteros.^[8] Kattan was arrested in 1981 with 20 kilograms of cocaine in his car.^[9] Searches of Kattan's home and four hotel rooms uncovered $40 million in cash.^[10] Kattan was convicted and sentenced to 30 years in prison.^[8] Barrera (nicknamed "Papa Smurf") pioneered the technique of smurfing, evading detection of suspicious deposits of cash by buying money orders and cashier's checks in amounts below $10,000, thus avoiding CTR reporting requirements.^[11] The scheme was dismantled in 1984 after Barrera and 13 others were charged with conspiracy to defraud the United States.^[12] About half of those charged, including Barrera, fled to Colombia, while others were arrested and sentenced to U.S. prison terms.^[12]

The Great American Bank of Dade County was also indicted in 1982 as a result of the investigation.^[3] The bank, which had laundered $60 million for Kattan in 1981 alone,^[13] entered a guilty plea in 1984 in connection for laundering a total of $94 million.^[14] The operation was generally successful at leading to prosecutions,^[1][3] and fragmented the drug trade.^[2] By the end of October 1982, the operation led to 125 arrests.^[6] The operation also demonstrated a number of gaps in the law, which led to the enactment of the Money Laundering Control Act in 1986,^[3] which (among other things) made smurfing a specific federal crime.^[11]

References

Further reading

• Gugliotta, Guy; Leen, Jeff (1989). Kings of Cocaine: Inside the Medellín Cartel - An Astonishing True Story of Murder, Money and International Corruption. New York: Simon and Schuster. ISBN 978-0-6716-4957-9. https://books.google.com/books?id=Y3dGino_7DoC. 

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