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$20 Million Lost in Freezing Drug Lord's Funds

December 07, 1989|DOUGLAS JEHL | TIMES STAFF WRITER

WASHINGTON — A U.S. effort to freeze an estimated $81 million in overseas bank accounts belonging to a leader of the Medellin cartel went partly awry last month when a significant part of the total was suddenly transferred to Panama, the Justice Department reported Wednesday.

"We lost $20 million," Drug Enforcement Administration chief John C. Lawn conceded.

The admission came as Lawn and Atty. Gen. Dick Thornburgh confirmed published accounts that the suspicious funds belonged to Gonzalo Rodriguez Gacha, whose power and ruthlessness in overseeing cocaine trafficking has made him a top target of U.S. and Colombian authorities.

Despite their failure to freeze the entire cache, the officials portrayed the operation as a major breakthrough achieved through the cooperation of four European countries in which the money was successfully frozen.

"We are now, in effect, inside one of the Medellin cartel's investment portfolios," Lawn said at a news conference.

At the same time, in response to Wednesday's devastating bombing in the Colombian capital that claimed at least 45 lives, Thornburgh denounced what he called the "obviously ruthless and irrational efforts being undertaken by the drug cartels that have taken many innocent lives."

The clues to what the Justice Department called the Medellin cartel's "worldwide financial empire" were uncovered in October when Colombian officials seized bank records and other documents during a raid on the home of Alfonso Rodriguez Munoz, a nephew and associate of Gacha.

The records, forwarded to the DEA for analysis, revealed that at least $81 million in cocaine profits were being held as long-term, high-yield investments in eight countries under the name of Mauricio Vives, a financial adviser to Rodriguez Gacha.

An international crackdown beginning Oct. 24 successfully froze $61 million held in Luxembourg, Switzerland, Austria and Britain, the officials said. But $20 million had been transferred to Panama from accounts in Hong Kong, the Cayman Islands and Montserrat.

That sum is believed impossible to recover because the United States has no relations with the government of Panama, which is headed by Gen. Manuel A. Noriega, who is under indictment in Florida on drug trafficking charges.

Nevertheless, Thornburgh asserted that Rodriguez Gacha had been "shorn of substantial assets" and said he is confident that the message will be "not lost on his counterparts around the world."

The announcement that the full $81 million "stash" had not been frozen was notable because it differed from a preliminary account provided a month ago by a senior DEA official who told a congressional committee that the entire sum apparently had been frozen.

A breakdown of the funds indicated that most had been held in 10 accounts in Luxembourg, where $39.4 million in assets were frozen. Only $2 million was held in the United States.

Disposition of the funds will handled by the governments involved, authorities said. They declined to identify the banks where the money had been held, saying there was no indication that they knew the deposits were tainted.

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