Suitcases of drug money arriving in South Florida are fueling legitimate commerce between Venezuela and the United States, even as ties between the two countries deteriorate, according to local and federal investigators.
South Florida has become a hub of drug-money laundering, through a black-market exchange of U.S. dollars and Venezuelan bolivares, according to the Office of National Drug Control Policy.
A money-laundering task force in Broward and Miami-Dade counties has traced millions of illicit dollars to international heroin and cocaine traffickers, who rely on South Florida brokers to sell the cash to desperate business owners in Venezuela. Otherwise, those businessmen have no access to enough U.S. currency to import American products.
The black-market currency exchange ballooned after Venezuelan President Hugo Chavez placed tougher restrictions on the availability of U.S. dollars in May 2010, the drug control office report said.
More than 15 people in South Florida — mostly Venezuelans — were arrested last year on federal money laundering charges. They are accused of laundering more than $7 million in heroin and cocaine profits, according to a federal indictment.
Federal authorities say the scheme often works like this: Drug traffickers in the United States make millions of dollars selling heroin and cocaine smuggled from South America. They pay someone to pick up the cash in Puerto Rico or New York and bring it to South Florida.
Brokers in South Florida buy the tainted money and sell it at an inflated price to businesses in Venezuela. The brokers use the drug dollars to pay U.S. bills on behalf of the business owners, who in turn, deposit bolivares in Venezuelan banks.
The bolivares pay off drug traffickers in Venezuela, and the cycle begins again.
That was the case with Rafael Polanco, of Hollywood, who made $500 per trip to Puerto Rico to carry back the U.S. cash in his suitcase. Polanco, 40, was among several South Floridians convicted of conspiring to launder money and was sentenced in September to seven years in prison.
Several Venezuelan brokers arrested in the scheme said they didn't know they money they bought was from drug profits. Several accepted plea deals to the lesser charge of transferring money without a license.
"It's unfortunate that [businesses] have to resort to this to conduct business," said Fort Lauderdale police Detective Ben Dusenbery, with the Broward County Money Laundering Task Force. "The only pool of dollars they really have are drug dollars."
Chavez, a vocal critic of the United States, has limited Venezuelans in the country to buying no more than $2,500 of U.S. dollars per year. And it must be purchased through the government.
Federal agents and local police use wiretaps and surveillance cameras to watch the money change hands. They've seen parking lots become packed with people moving bags of cash from car to car, according to ICE Homeland Security Investigations
"It's very blatant," said Carmen Pino, assistant deputy in charge of Homeland Security Investigations in Miami. "[South Florida] is a real hot spot for this because of all the international trade."
Relatives and friends in May wrote letters to a federal judge on behalf of Fortunato Farache, of Doral, who was accused of laundering $50,000 in tainted cash to accounts in Venezuela. He said he needed the dollars to run his eyeglass-design company in Venezuela. He bought the dollars from a friend, he said in court records, thinking that the money was profit from his friend's firm.
It's sometimes hard to figure out in these cases who is running a legitimate business, Dusenbery said. Venezuelan financial records are not readily available, and companies that do legitimate business with South Florida often cook their books to hide the drug money.
"So you only get half of the story," he said. "People in Venezuela can't really see what's going on here, and you can't see what's going on there."
apcampbell@SunSentinel.com, 561-243-6609 or Twitter @AlexiaCampbell
South Florida has become a hub of drug-money laundering, through a black-market exchange of U.S. dollars and Venezuelan bolivares, according to the Office of National Drug Control Policy.
A money-laundering task force in Broward and Miami-Dade counties has traced millions of illicit dollars to international heroin and cocaine traffickers, who rely on South Florida brokers to sell the cash to desperate business owners in Venezuela. Otherwise, those businessmen have no access to enough U.S. currency to import American products.
More than 15 people in South Florida — mostly Venezuelans — were arrested last year on federal money laundering charges. They are accused of laundering more than $7 million in heroin and cocaine profits, according to a federal indictment.
Federal authorities say the scheme often works like this: Drug traffickers in the United States make millions of dollars selling heroin and cocaine smuggled from South America. They pay someone to pick up the cash in Puerto Rico or New York and bring it to South Florida.
Brokers in South Florida buy the tainted money and sell it at an inflated price to businesses in Venezuela. The brokers use the drug dollars to pay U.S. bills on behalf of the business owners, who in turn, deposit bolivares in Venezuelan banks.
The bolivares pay off drug traffickers in Venezuela, and the cycle begins again.
That was the case with Rafael Polanco, of Hollywood, who made $500 per trip to Puerto Rico to carry back the U.S. cash in his suitcase. Polanco, 40, was among several South Floridians convicted of conspiring to launder money and was sentenced in September to seven years in prison.
Several Venezuelan brokers arrested in the scheme said they didn't know they money they bought was from drug profits. Several accepted plea deals to the lesser charge of transferring money without a license.
"It's unfortunate that [businesses] have to resort to this to conduct business," said Fort Lauderdale police Detective Ben Dusenbery, with the Broward County Money Laundering Task Force. "The only pool of dollars they really have are drug dollars."
Chavez, a vocal critic of the United States, has limited Venezuelans in the country to buying no more than $2,500 of U.S. dollars per year. And it must be purchased through the government.
Federal agents and local police use wiretaps and surveillance cameras to watch the money change hands. They've seen parking lots become packed with people moving bags of cash from car to car, according to ICE Homeland Security Investigations
"It's very blatant," said Carmen Pino, assistant deputy in charge of Homeland Security Investigations in Miami. "[South Florida] is a real hot spot for this because of all the international trade."
Relatives and friends in May wrote letters to a federal judge on behalf of Fortunato Farache, of Doral, who was accused of laundering $50,000 in tainted cash to accounts in Venezuela. He said he needed the dollars to run his eyeglass-design company in Venezuela. He bought the dollars from a friend, he said in court records, thinking that the money was profit from his friend's firm.
It's sometimes hard to figure out in these cases who is running a legitimate business, Dusenbery said. Venezuelan financial records are not readily available, and companies that do legitimate business with South Florida often cook their books to hide the drug money.
"So you only get half of the story," he said. "People in Venezuela can't really see what's going on here, and you can't see what's going on there."
apcampbell@SunSentinel.com, 561-243-6609 or Twitter @AlexiaCampbell
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