Federal agents press investigation of money-laundering scam


SAN JUAN, Puerto Rico -- Federal agents pressed their investigation of Puerto Rico's financial institutions hoping to smash a money-laundering network believed to involve millions of dollars from drug trafficking.

'This is an unprecedented operation,' U.S. Attorney Daniel Lopez Romo said.


A total of 17 Puerto Ricans, including 13 bankers, were arrested Thursday as part of Operation Greenback, which investigated the manipulation and falsification of banking reports to disguise sources of income.

The federal investigation began in Miami in 1980 and was extended to Puerto Rico in 1983.

In a joint news conference Friday with Gov. Rafael Hernandez Colon, Lopez Romo said agents were poring over bank records and indicated more arrests were possible.

Officials said more than 200 officers from 14 federal agencies were involved in a raid Thursday on eight banks, where the network is suspected of laundering millions of dollars from cocaine trafficking and other illegal activities.

Officials said the network laundered money for Rostylaw 'Rusty' Kindratiw, who was arrested in February in Florida in connection with a $36 million cocaine operation.

The Puerto Rican connection is believed to be several years old.

Puerto Rico is one of the most important banking centers in the Caribbean due to the billions of dollars deposited on the island by tax-exempt subsidiaries of U.S. companies.

Among those charged after an 18-month investigation on the island was Raul Penag Aricano, president of Caribbean Federal Savings Bank, and two officials identified as Maria Lloret de Cancel and Reinaldo Ramos Ramos, connected to the New York-based Citibank, the second largest American bank.

Those arrested were charged with a total of 57 counts of conspiring to launder money illegally.

The banks involved hurried to point out the charges were against individuals and not the institutions themselves.

'We understand that the charges constitute individual actions and do not reflect the policies or the systems that we have implemented regarding information on cash transactions,' a spokeswoman for Citibank said.

Lopez Romo said while money laundering was common in all federal jurisdictions, 'here it was found that aside from occurring, it was reaching the point of being rampant, an exaggeration.'

He added that Thursday's raid was only a small part of a large-scale operation to destroy international drug trafficking networks and organized crime.

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