US SEIZES $31M IN NEW YORK ACCOUNTS OF PERUVIAN CARTEL

The United States Attorney in Manhattan has seized $31m, from nine accounts at JP Morgan Chase, Bank of America, Wells Fargo, and others, both in the US and in Peru, of a Peruvian cocaine cartel that used gold mining as a front for their cocaine processing and trafficking activities. The principals, Manuel, Orlando and Wilmer Sanchez Paredes, all face money laundering charges in their native Peru.

Twenty years ago, the Sanchez brothers apparently funded their gold mining venture, Cia. Minerva Aurifera Santa Rosa SA (COMARSA), with a suspicious $2m loan from a Grand Cayman bank. Did they perhaps merely borrow the funds from themselves, from their trafficking profits, the oldest laundryman's trick in the book ? An investigation quickly found that there were holes in the transaction.

Orlando Sanchez Paredes, General Manager

The US Attorney's announcement today stated that the accounts seized included:

(1)  Accounts of COMARSA, and their other mining company, Cia. Minerva San Simon (SAN SIMON).
(2) Accounts of front companies owned and operated by Sanchez Paredes family members.
(3) Accounts of employees.
(4) Other front companies. (Where was Compliance, on allowing these to launder money ?)

Apparently, there is a commercial chemical common to both gold mining and cocaine processing, and law enforcement noticed that the chemical purchased did not result in the appropriate amount of gold mined and refined.

1m documents seized in the Peru case

The Court file is not available to the public, and one must assume that it is sealed at this time. The style of the case, for future reference, is : United States vs. All funds on Deposit at various Bank Accounts, etc, Case No.:  12-cv-7530 (SD NY). COMARSA has denied the charges.

Inasmuch as the law enforcement investigations went on for several years, one wonders how all this escaped the compliance officers at JP Morgan Chase, Bank of America, and Wells Fargo. With the success of the Colombian Army's campaign against the FARC and ELN, and the country's narcotics production interdiction programme, Peru is now the place to watch for cocaine production. Where were the banks' compliance departments on all this money ? One does not have $31m on deposit ever day, coming from a primary narcotics production jurisdiction. Where were the gatekeepers ?

The COMARSA mine