United States v. Banco Cafetero Intern., 85 Civ. 1835 (GLG) to 85 Civ. 1837 (GLG)
| Citation | 608 F. Supp. 1394 |
| Decision Date | 06 May 1985 |
| Docket Number | 85 Civ. 1840 (GLG),No. 85 Civ. 1835 (GLG) to 85 Civ. 1837 (GLG),85 Civ. 1841 (GLG).,85 Civ. 1835 (GLG) to 85 Civ. 1837 (GLG) |
| Parties | UNITED STATES of America, Plaintiff, v. All Monies and Other Property Contained in Any and All Accounts and Certificates in the Names of BANCO CAFETERO INTERNATIONAL, Banco Cafetero Panama, Banco Cafetero Panama 9A, Banco Cafetero Bogota, Banco Cafetero Colon, Banco Cafetero Caribe Ltd., including But Not Limited to Checking Account Nos. XXXXXXXXXX, XXXXXXXXXX, and XXXXXXXXXX, up to the amount of $31,000,000 United States Currency and All Monies and other Property Contained in checking account no. XXXXXXXXXX, up to an Unlimited Amount of United States Currency, Maintained At Various Branches of Irving Trust Company, Defendants-in-rem. UNITED STATES of America, Plaintiff, v. ACCOUNT NO. XXXXXXXXXXXX AT CHEMICAL BANK, Defendant-in-rem. UNITED STATES of America, Plaintiff, v. ACCOUNT NO. XXXXXXXXXXXX AT PHILADELPHIA INTERNATIONAL BANK, Defendant-in-rem. UNITED STATES of America, Plaintiff, v. ACCOUNT NO. XXXXXXXXXXXX AT MARINE MIDLAND BANK NA, Defendant-in-rem. UNITED STATES of America, Plaintiff, v. ACCOUNT NO. XXXXXXXXXXXX AT FIRST CHICAGO INTERNATIONAL BANKING CO., Defendant-in-rem. |
| Court | U.S. District Court — Southern District of New York |
Rudolph W. Giuliani, U.S. Atty. for the S.D.N.Y., New York City, for plaintiff; Robert L. Ullmann, Cynthia Keeffe, Sp. Asst. U.S. Attys., Franklin H. Stone, Asst. U.S. Atty., New York City, of counsel.
Kelley Drye & Warren, New York City, for claimants; Scott G. Campbell, Arnold S. Klein, Tomas T. Szoboszlai, New York City, of counsel.
This action arises out of the government's attempt to prevent laundering of money from illegal narcotics transactions. On March 8, 1985, the United States filed eight complaints in forfeiture against moneys located in various bank accounts in New York City. The government then applied for and obtained warrants for arrest of the defendants-in-rem, which were served upon the custodial banks.
Rule 12. For the following reasons, we deny the expropriated banks' motion to vacate the warrants at this time.
In their papers, the parties set forth the "facts" outlining the events and transactions at issue. In order to understand the events leading up to the instant controversy, we will set forth the claims, recognizing that many of the "facts" are in dispute, or, at least, are not conceded to be true.
On January 30, 1984, officers of the Burbank, California, Police Department discovered approximately $690,000 in United States currency in small denominations in the apartment of Franciso Arredando and Magley Belasic. They also discovered a bag containing torn-up cashier's check receipts totalling approximately $1,100,000 in United States currency. It was suspected that the inhabitants of the apartment were part of a large illegal narcotics money-laundering scheme. Therefore, federal agents commenced an investigation.
The investigation revealed that all of the checks were for amounts less than $10,000 and were purchased at various banks with cash, largely, if not entirely, in small bills. The investigation further revealed that these cashier checks had been deposited to an account in the name of the First Inter-americas Bank of Panama, S.A. ("FIB"), maintained at the Continental National Bank of Miami, Florida ("CNB"). Handwriting analysis revealed that many of the endorsements on the checks were made by the same individual, even though the signatures were in different names.
Surveillance of CNB during March and April 1984, disclosed significant daily cash or cashier's check deposits into FIB's account. These were delivered by carriers unable to identify the individuals responsible for the deposits. From November 1984 to December 1984, $4,000,000 was deposited into FIB's account. An FIB account representative appeared at the time of the arrival to verify the count for deposit.
CNB advised federal agents that money had been removed from the FIB account either by cash withdrawals by authorized FIB representatives, all of whom were Colombian or Panamanian, or by wire transfers to banks in New York City. Most of the wire transfers went to Irving Trust Company, into the account of Banco Cafetero Panama, Account Number XXX-XXXX-XXX (the "500 account"). From March 1983 to the present, CNB records revealed that approximately $27 million had been wire transferred from the FIB account to the 500 account. This account, however, also received funds of other customers of Banco Cafetero Panama.
Investigations by federal agents also revealed that FIB moneys have continued to flow out of FIB's account at CNB and into accounts in New York. At least $1,200,000 was deposited into the 500 account at Irving Trust between February 1, 1985, and March 1, 1985.
An examination of the documents received by federal agents as of March 8, 1985, revealed that certain funds in the 500 account, attributable to FIB, were transferred to other Banco Cafetero Panama accounts maintained at Marine Midland, Chemical Bank, Philadelphia International Bank of New York, and First Chicago International Banking Co., and into accounts of Banco Cafetero Colon and Banco Cafetero International maintained at Irving Trust. In addition, numerous transfers occurred back and forth between Banco Cafetero Panamas's various accounts and the accounts of Banco Cafetero Bogota, Banco Cafetero Colon, and Banco Cafetero International.
In or about March 1984, federal agents also learned through a review of CTR (IRS Form 4789) reports that large cash transactions were being deposited into an FIB account at Tower Bank in Hialeh Gardens, Florida ("Tower"). From March 1983 to the present, Irving Trust Company records show that approximately $4 million has been wire transferred from the FIB account at Tower to a Banco Cafetero account in New York.
The FIB headquarters in Panama is a small residential house with bars on the windows and a small sign. Its president, Gilbert Rodriguez, was indicted in Los Angeles in August 1982, for violation of the federal narcotics laws. He has also been indicted in the Eastern District of New York for violating narcotics laws. Based on these indictments, he was arrested in Madrid, Spain, and is currently facing extradition to the United States. FIB was recently nationalized by the Government of Panama, allegedly due to its well-known connection with narcotics operations.
Banco Cafetero Bogota is a banking corporation organized and existing under the laws of the Republic of Colombia with its head office in Bogota. It is the largest state-owned bank in Bogota, Colombia. The account it maintains with Irving Trust Company in New York is a demand or checking account. Banco Cafetero Panama is a banking corporation formed under the laws of Panama and is a wholly-owned subsidiary of Banco Cafetero Bogota. The accounts that it maintains at the various banks are demand accounts. Banco Cafetero Colon is a branch bank of Banco Cafetero Panama in Colon, Panama, and it maintains a demand account at Irving Trust. Banco Cafetero International is an Edge Act bank organized under the laws of the United States. Its main office is located in New York and it too is a wholly-owned subsidiary of Banco Cafetero Bogota. Likewise, its account at Irving Trust is a demand account.
On March 8, 1985, the government filed eight complaints in forfeiture against the eight bank accounts, alleging that the defendants-in-rem are subject to forfeiture pursuant to 21 U.S.C. § 881 because they were furnished or intended to be furnished in exchange for a controlled substance in violation of Title 21 of the United States Code, constitute proceeds traceable to an exchange of a controlled substance in violation of Title 21, and/or were used to facilitate a violation of Title 21.
The government obtained warrants for the arrest of the defendants-in-rem seeking to seize all of the moneys and property in the accounts. They subsequently amended the warrants so that they seized only moneys in the accounts attributable to FIB.1
The exact amount of moneys presently under seizure is unclear. According to the most recent papers submitted by the government, the following amounts are presently under arrest: $2,000,000 in Banco Cafetero Panama's account at Irving Trust; $2,552,000 in Banco Cafetero Panama's account at Marine Midland; $299,729.68 in Banco Cafetero Panama's account at First Chicago; $54,585 in Banco Cafetero Panama's account at Chemical Bank; and $323,000 in Banco Cafetero Colon's account at Irving Trust. Two other restrained accounts have a negative balance: Banco Cafetero Panama's account at Philadelphia National Bank and Banco Cafetero International's account at Irving Trust. The last account, Banco Cafetero Bogota's account at Irving Trust, was unrestrained upon the government's consent.
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