Money Laundering Scheme Uses ATMs to Transfer Drug Cash

Money Laundering Scheme Uses ATMs to Transfer Drug Cash
The Wall Street Journal Interactive

Sep 24 2007 : ATMs around the world are being used to launder money from the U.S, authorities in New York have revealed. The practice, known as 'microstructuring,' involves small deposits being made into bank accounts in the U.S., and funds being withdrawn at ATMs abroad.

Microstructuring is emerging as a major problem for law enforcement officials due to the global nature of ATM networks.

Law-enforcement officials told the Wall Street Journal that at 8.50 a.m. E.D.T on March 15, 2006, two individuals began going from bank to bank in New York, depositing cash into accounts held by other people.

The deposits allegedly made by Luis Saavedra and Carlos Roca mostly ranged from US$500 to US$1,500. By 2:52 p.m. E.D.T., the men had placed over US$111,000 into 112 accounts, say the officials, who reconstructed their movements from seized deposit slips.

By keeping each deposit below US$2000, Roca and Saavedra hoped to evade suspicion by the banks.

Confederates in Colombia used ATM cards to withdraw the money in pesos, moving quickly from ATM to ATM, the officials say. The U.S. accounts from which funds were withdrawn had been opened by Colombians, who allegedly passed their bank cards to Saavedra and his associates.

Saavedra and Roca were arrested in June 2007 and charged under New York state money-laundering laws. Officials say they were moving money for a Colombian drug-trafficking organization that sells cocaine and Ecstasy. Prosecutors allege the two men were engaged in microstructuring.

"The organization at its height was moving about US$2 million a month," Bridget Brennan, Special Narcotics Prosecutor for New York City, says.

This month, Saavedra pleaded guilty to second-degree money laundering and faces prison time. Roca has pleaded not guilty.

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