Federal agents working as money launderers at a fake mortgage company have intercepted millions in cocaine cartel profits, according to two sealed indictments.
Five federal indictments led to the arrests Friday of at least nine suspects, including a Merrill Lynch executive in Panama.
The participants allegedly created a complex web of "shell" companies to launder millions in drug profits. The suspects are accused of diverting drug money, along with millions supplied by undercover U.S. Drug Enforcement Administration agents, through shell companies and special investment accounts in Florida, the British Virgin Islands, New York, Panama and the tiny European principality of Liechtenstein.
More arrests were expected, and U.S. Attorney Larry Colleton was to detail the operation when the indictments are unsealed Monday, the Tampa Tribune reported Saturday.
The investigation began in 1992 when DEA set up Avid Mortgage Co. in Clearwater and later in Sarasota "for the purpose of infiltrating and investigating money-laundering operations," according to two indictments.
Investigators targeted distributors based in Colombia and elsewhere who smuggled cocaine to Miami, New York, Chicago, Houston, Los Angeles and San Juan, Puerto Rico. The smuggling was "generating proceeds in United States currency totaling many millions of dollars," the indictment said.
Charged Friday were lawyer Ricardo Leyton of Panama City, Panama; Frank L. Greene, a vice president for Merrill Lynch International and Co. in Panama; Steven L. Mills, an account executive with Merrill Lynch International & Co. in Panama; and Panamanian accountant Charles Richard McFadden Jr.
The indictment states Merrill Lynch accounts were used to help launder money, but alleges no involvement by the company other than through the two employees.
Merrill Lynch spokesman Paul Kritchlow said company officials were unaware of the federal investigation and would reserve comment until the indictments are unsealed.