LOS ANGELES -- Amid speculation about last-minute plea agreements, three of Mexico's most prominent banks are set to go on trial this week in Los Angeles federal court on charges of laundering millions of dollars for the Cali and Juarez drug cartels.
The trial, which could have far-reaching political and economic repercussions in Mexico, is the first of four stemming from Operation Casablanca, the U.S. Customs Service's extensive probe of international drug-money laundering.
Bancomer and Banca Serfin, Mexico's second- and third-largest banks, and Banca Confia, which has sold off most of its assets to Citibank, have been engaged in intense plea negotiations with prosecutors in recent weeks.
Confia and Bancomer are reportedly close to a deal. Fueling the rumors was a notice to lawyers late Friday that the trial was being reset from Monday to Thursday. No explanation was given.
When the 2 1/2-year-long Operation Casablanca concluded in May with the indictment of 110 suspects, law enforcement authorities said evidence at trial would show links between drug cartels and Mexican banks.
If the government can prove that claim and the banks are convicted, they would face millions of dollars in fines on top of the $37.6 million that the U.S. government has already seized from them.
More significantly, Bancomer and Banca Serfin, which have operations in the United States, would be subject to a license revocation hearing by the Federal Reserve Board. Confia has no such exposure because it does not operate in the United States. Being blacklisted in the United States also would make it extremely difficult for the banks to raise capital in the international markets, Banca Serfin's defense lawyer observed in court recently. "And that," he added, "would be the ultimate death penalty."
Six Mexican bankers, businessmen and stockbrokers are scheduled to go on trial with the banks. Eleven other Mexican bankers already have pleaded guilty. About 20 more are fugitives, including five Mexico has refused to extradite.
The case against the banks grew out of an elaborate sting in which undercover customs agents, aided by a paid informant with past ties to the Cali cartel, passed themselves off as money launderers seeking to funnel drug proceeds through the Mexican banking system.
Bankers recruited into the conspiracy were given what became known among investigators as the "Cali speech," a pointed reminder that they were volunteering to launder funds from the Colombian drug syndicate. The Cali speech was secretly videotaped.
All told, the undercover agents videotaped more than 100 meetings with Mexican bankers and other suspects at the agents' business front, Emerald Empire Corp., housed in a nondescript Los Angeles-area industrial park.
The incriminating tapes pose a thorny problem for the six remaining individual defendants. Their defenses range from duress to entrapment.
Pub Date: 3/29/99