International Money Laundering Ring Cracked
PROVIDENCE, R.I. (AP) _ Authorities on Monday cracked a ring that allegedly laundered millions in Colombian cocaine money through banks across the nation, including one that figured in the collapse of Rhode Island’s banking system.
The ring laundered as much as $500 million during the past two years from the Colombian-based Cali and Medellin cocaine cartels, much of it through Rhode Island banks, said U.S. Attorney Lincoln C. Almond.
The investigation grew from a previous one that uncovered a $1.1 billion money laundering operation based in New York, Miami and Los Angeles in 1989, Customs Commissioner Carol B. Hallett said at a Washington news conference.
″There were literally dozens of banks that were involved that have been very helpful to us,″ she said.
Banks involved were in Rhode Island, Los Angeles, Miami, New York and possibly Massachusetts, she said. John Hensley, assistant customs commissioner for enforcement, said about 25 banks were involved, including some in Switzerland, England, Colombia and the Caribbean.
The investigation began in Rhode Island in 1989 and expanded into an international investigation last year, Hallett said.
Federal authorities, alerted by bank documents to large sums of cash coming into the banks used in the scheme, urged the banks to go along with it, Almond said.
″We were on to them from the start,″ he said.
″Money is really, we believe, the fuel that feeds the drug lords,″ Hallett said. ″The drug traffickers and the kingpins are as addicted to money as the users are to the drugs.″
A total of 50 people were named in indictments from at least five states and at least 35 had been arrested, the Justice Department said. Most will face charges of racketeering, conspiracy and money laundering, and the ringleaders could face life in prison without parole, Almond said.
Indictments were returned in Atlanta, New York, Providence and Miami, and a criminal complaint was filed in Los Angeles.
One bank, Heritage Loan and Investment Co. of Providence, was not filing the required forms for handling large cash transactions, Almond said.
It was a target of the investigation before it collapsed a year ago, eventually bringing down with it a private Rhode Island deposit insurance system and forcing Gov. Bruce G. Sundlun to close 45 banks and credit unions Jan. 1.
About $15 million illegally went through Heritage before it closed after its president, Joseph Mollicone Jr., embezzled $13 million, Almond said. Mollicone is now a fugitive. Almond said Mollicone also was a target of the money laundering investigation, but called it secondary to the alleged embezzlement.
The money was laundered through a series of gold purchases and sales and wire transfers of money, Hallett said. Money laundering is a complex procedure for disguising the ownership of large amounts of cash.
In day-to-day control of the operations were Stephen A. Saccoccia, a Rhode Island precious metals dealer believed to have ties to organized crime; Barry Slomovits, owner of several companies whose main line of business has been wholesale jewelry in New York; and Duvan Arboleda, a Colombian whose primary business was precious metals in Miami, Hallett said.
Saccoccia and his wife, Donna, were arrested in Geneva, Switzerland, and Slomovits was arrested in New York. Arboleda left Miami for Colombia several months ago and Hallett did not hold out hope of an arrest in the near future.
Saccoccia and Arboleda each are believed to have been laundering up to $30 million a month, Hallett said.
Saccoccia, 35, head of Trend Precious Metals of Cranston, was familiar to federal authorities because of his reputed ties with the Patriarca crime family.
He had been identified by the IRS several years ago as an ″up and coming financial hoodlum,″ Almond said, and had served 15 months in prison for income tax evasion in the early 1980s.
Saccoccia was the ″perfect front″ because his precious metals business required him to regularly handle large sums of cash, Almond said.
Investigators used electronic surveillance to observe money being brought by armored car and other means into Rhode Island from New York and Los Angeles. Boxes of cash often were disguised as gold, Almond said.