U.S. Indicts Five in Money Laundering Through Insurance Funds

On December 6, 2002, U.S. Customs Service announced the first grand jury indictment connected with the use by Colombian drug cartels of international life insurance polices laundering millions of dollars in illicit proceeds from the U.S. and Mexico. The alleged scheme involved the use U.S. and the Isle of Man, inject additional cash in them and then liquidate the proceeds. The buyers paid penalties to cash the accounts early. However, the check or wire transfers derived from the canceled policies seemed to be legitimate investment proceeds. U.S. authorities have seized $9.5 million form about 250 accounts linked to drug trafficking. John Clark, special agent in charge of the U.S. Customs Service’s Miami office, estimated that the accounts may have been used to launder as much as $80 million over the past decade. Officials in Colombia have also seized $20 million in Columbia and in Panama in connection with the money laundering operation. They arrested at least nine persons in the case in November 2002, including three of the five defendants charged in Miami. One Colombian defendant was thought at the time of the indictment to be in California.