By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
Listen to the pugnacious Ecuadorian fellow with the New York accent, whom shady Miami bankers tolerate with a nervous smile. "Miami has a well-deserved reputation for money laundering," says Charles Intriago, a former federal prosecutor who has built a lucrative business on that experience. "There are four major categories of money launderers -- the drug trafficker, the fraudster, the corrupt foreign officials that since the days of Batista and Somoza have found receptive Miami banks to store their stolen money, and the sun-loving mobsters from the North."
Intriago heads the Miami-based Alert Global Media, which publishes the Money Laundering Alert newsletter, a subscriber-based publication that explains in layman's terms changes in money-laundering regulations and tracks enforcement actions. He's become the much-quoted resident expert on this topic and owes at least part of this cachet to what the Washington Post in 1981 termed "the Wall Street of the underground economy."
The early Eighties was the cowboy era in Miami, a place also sometimes called America's last frontier town -- the frontier of surreality, quite often. Cops killed drug dealers and stole their goods. Dealers hung out all day near pay phones at strip malls in Kendall, waiting for their pagers to go off. Miami Beach retirees smuggled drugs in their purses and laundered a few grand a week at their local banks. A modest deli in Homestead kept Dom Perignon in stock for the smugglers who liked a little bubbly with their bologna sandwiches.
This was largely a young man's game -- from the billionaire thirtysomethings running empires from Medellín, Bogotá, and Cali to the hotshot attorneys defending them in courtrooms, Miami's own "White-Powder Bar." The small-timers were mostly young, too, as were the cops and the law-enforcement agents. Even many of the money-movers were relative youngsters, part of the instant international banking community that sprang up along Brickell Avenue. Everything was fast, loose, and obvious. "The only thing to compare would be Chicago in the 1920s," observes Michael McDonald, a former special agent in the IRS's criminal investigations division, who worked in Miami from 1971 to 1998. In 1979 he cofounded Operation Greenback, the first multiagency money-laundering task force ever assembled.
The groundwork had been laid in the Seventies, when the nascent Colombian cartels began seriously pumping drugs and money into the local economy. Up to that point, according to McDonald, the local drug trade consisted mostly of marijuana transported by traditional American mafia types and Cuban fisherman in the Keys who had been shut out of fishing Bahamian waters. "The Keys became the smuggler's paradise," he recalls. "The term square grouper came from that time. Coke was right on the heels of that. The Medellín guys liked Miami. They came here and partied."
Also in the Seventies, the Central Intelligence Agency shut down its vast Miami field station, which had concentrated largely on aiming exiles at Castro's Cuba, as well as other not-so-secret missions in Latin American and Caribbean countries. That left in the lurch hundreds of Cuban-American men with training easily applicable to the drug trade, such as delivering payloads in boats and small airplanes, and methods of disguising the sources of funding.
South Florida immigration patterns partially prepped local banks for a startling lack of curiosity about their customers. The money always arrived first -- flight capital -- although sometimes this was a euphemism for loot liberated from poor countries by their leaders. "I'd like to have a nickel of every dollar in real estate and bank holdings by the Miami paramours of corrupt Latin American officials," Intriago says. "Gimme five percent of the mistresses' money. I'd be a rich man."
At the turn of the Miami Vice decade came the Mariel boatlift, the Liberty City riots, a record-breaking murder rate, a sagging national economy, and the beginning of the end for major white-collar employers such as Eastern Airlines. "We were reeling from one kind of a crisis to the next," recalls Bill Cullom, president of the Greater Miami Chamber of Commerce in 1981.
Interest rates were high, but real estate was booming. Real estate expert Charles Kimball developed an insanely intricate system for tracking money launderers by cross-referencing various property transactions, a talent he loaned to the FBI and other agencies. "Citizen Kimball," as his friend and sometime collaborator Michael Cannon calls him, recorded transactions on index cards and then ordered them largely through an intuitive genius and "a phenomenal photographic memory."
Cannon, now the managing director of Integra Realty Resources South Florida (Kimball succumbed to cancer this past August), describes the game as fascinating. Drug profits were clearly pumping up the price of property. The money was routed in different ways: through law firms, offshore corporations, and banks. "They used to walk into the banks with suitcases full of cash," Cannon remembers. "Then they purchased legitimate real estate with contraband money, which led to the rule that anything over $10,000 had to be reported."
Jim Angleton, Jr., was in the mortgage business in the early Eighties, and his family owned a fair amount of real estate along the Biscayne Boulevard corridor. "I once had a Colombian walk into my office with four Publix shopping bags filled with twenties, fifties, and hundreds," he remembers. "He said there was $400,000 in them." The Colombian wanted to place the money in a real estate mortgage that, once paid, would allow him to take the freshly laundered cash back onto the street. "I sent him packing," Angleton says. "Later that day, here he is walking down Biscayne and he tells me that Capital Bank on 36th Street took the money and opened an account for him."