Colombian Drug and Money Laundering Ring Busted

Operation Mallorca, a 27-month investigation that targeted the alleged money laundering activities of four Colombian-based money brokers who funneled drug proceeds through the Colombian Black Market Peso Exchange resulted in the arrests of 36 individuals in two countries.

In addition, during the operation, $7.2 million, as well as 947 kilograms of cocaine, 7 kilograms of heroin, and 21,650 pounds of marijuana were seized.

"DEA is targeting the financial networks of drug cartels like never before to bankrupt traffickers and money launderers," Administrator Karen P. Tandy said. "In Operation Mallorca, we followed the money around the globe and into the hands of major Colombian drug traffickers. We've shown the Black Market Peso Exchange for what it is – the largest known drug money laundering mechanism in the Western Hemisphere."

The BMPE is a system where drug traffickers sell U.S. drug proceeds to brokers for pesos. Brokers then sell the drug proceeds to Colombian importers who purchase goods in the United States and elsewhere. By purchasing the U.S. dollars on the BMPE and not through Colombia's regulated exchange system, the importers avoid Colombian taxes and tariffs, gaining significant profit, and a competitive advantage over those who import legally.

"DEA showed that traffickers can move their money around the world, but we will track it down," said Tandy, who added that DEA denied drug trafficking organizations over $500 million of their profits last year alone. These seizures represent an increase of 40 percent over the previous year and severely impact the ability of drug traffickers to produce, transport, and distribute drugs into the United States.

"We know that major drug traffickers have insulated themselves from their drug distribution networks, but remain closely linked to the proceeds of their trade. Operation Mallorca is a testament to our focus on the financial side of the drug business," Tandy said.

See Operation Mallorca Details and Photos