CAPITALISM'S ACHILLES HEEL Dirty Money and How to

40 CAPITALISM’S ACHILLES HEEL
Why truck all that gold across country to New York? Better to open a
New York office to receive cartel cash and buy gold. This, too, was done,
making it a bicoastal laundering scheme.
But dumping that gold back on the market in New York might look a
bit odd. So, how about trucking the gold from both New York and Los Angeles
to Florida, to a refiner there who will buy the gold and pay Vivas?
Done. Vivas would then wire transfer the money to his own account in
Uruguay and from there distribute it on to cartel accounts.
But this was all getting much too slow and complicated and a bit suspicious
looking, especially with those armored trucks converging regularly on
Fort Lauderdale. So, let’s skip the gold altogether and imitate the transactions
on paper. A California gold dealer and the Florida refiner were easily
enticed by Vivas into the following scheme. A cartel front company delivered
cash to the gold dealer. The gold dealer, with fake purchase orders, pretended
to “buy” gold on the open market. The pretend gold was, with fake
invoices, “sold” to the Florida refiner. The next day the refiner would “resell”
the pretend gold back to the dealer. The dealer would pay for the pretend
gold by wire transferring the money delivered to him by the cartel to the refiner’s
account at Chase Manhattan in New York. The refiner then wire
transferred the money to Vivas’s account offshore, who as usual sent it on to
cartel accounts. The Los Angeles dealer and the Florida refiner earned modest
fees for their fictitious paperwork.
The Drug Enforcement Administration finally closed down La Mina in
1989 with Operation Polar Cap, a parallel money-laundering scheme that
penetrated Vivas’s scam. Vivas was arrested, as were the Florida refiner and
the California gold dealer. What started out as gold shipments from Argentina
ended up as paper shuffling in the United States, and a billion dollars
went through this evolving little exercise and into Medellín cartel
coffers. But the idea of continuously changing your schemes is a good one.
These fellows were just unlucky.
It’s not just tangible items that are put through this sort of subterfuge.
Billing for services can also be imaginary. A lot of invoices have shown up at
a lot of companies for consulting services, public relations, advertising, legal
advice, and financial planning without an ounce of underlying reality. Some
higher-up in the company is topping off a foreign bank account.
A variation on this theme of creative artifice is where you fake or disguise
who is the buyer and who is the seller. Someone steps in between the