Officers face scrutiny in luxury laundering sting


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From the “Truth Is Stranger Than Fiction Department”: Local authorities in south Florida started up a money laundering sting and task force and then charged three-percent commissions to launder money for drug cartels. And along the way, these police officers and sheriff’s-department employees racked up hundreds of thousands of dollars worth of first-class plane tickets, luxury hotel stays, tricked-out vehicles, sub-machine guns, expensive restaurants, Apple computers, and more. All paid for with those laundering commissions from the drug cartels. And no audit trail or court order. Seriously.

If you’ve ever wondered if authorities overreach in the pursuit of money laundering, this may be a textbook case. And you can read about it in-depth in a series of investigative reports by the Miami Herald.

According to reporter Michael Sallah, authorities from the Glades County Sheriff’s Department and the Bal Harbour Police Department worked together to set up a task force to create a money laundering sting to target drug cartels seeking to launder profits. Bal Harbour, an upscale community with 2,500 people and very little crime, seemed an odd location for a money laundering sting, but task force members flew around the country and even Puerto Rico for laundering pick-ups and drops.

Officers from the two local agencies created and ran an undercover operation from 2010 to 2012 in which they laundered more than $56 million in cartel profits. Operatives charged a 3 percent commission rate to the cartels, and then used that profit to fund their undercover activities—and more—in first-class style. Records show that authorities collected at least $1.7 million in laundering commissions.

Florida state law allows local law enforcement to run sting operations and launder money in order to gain access to criminal figures and activity, but investigators now analyzing the operation assert that local authorities did not have the right to spend the official evidence of the undercover operation without first gaining a court order. And there are mounting questions about the high-flying, luxury nature of the goods and services purchased by the task-force members.

Much of the money was run through a cooperating financial institution in the area. In apparent violation of official requirements and policies, officers running the money laundering sting did not arrange for yearly audits or maintain internal controls, and nor did they keep receipts and related records of the spending of the money that should have been held as evidence.

Adding to the controversy is that the local task force did not make any arrests but rather passed along tips to federal officials. According to the Herald, police posing as money launderers also delivered at least $20 million to front businesses in Miami, and many of those businesses remain open.

While the DEA acknowledges that it did receive tips from the task force and that some tips did result in significant arrests, there remain many concerns that the task force itself did not pursue any cases. Moreover, the mayor of Bal Harbour has now requested that federal authorities initiate an investigation into the actions of the task force itself. To read more about this case and about money laundering in south Florida, see the whole Miami Herald series here.

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