Bolivia Seizes Cocaine Impregnated into Paper
By Dialogo February 13, 2012The Bolivian anti-narcotics police seized 400 kg of liquid cocaine ingeniously hidden in a shipment of charcoal that had Europe as its final destination, with intermediate stops in Chile and Panama.
The “highly pure cocaine” was contained in 6,400 bags that were going to be transported to the Chilean port of Arica in two containers, Colonel Gonzalo Quezada, director of the Special Force for the Fight against Drug Trafficking (Felcn), announced in Santa Cruz, the region where the seizure was made.
The drug traffickers, “in a very sophisticated chemical process, impregnated the cocaine into kraft paper; the kraft paper (of each of the 6,400 bags) was contaminated with approximately 60 grams” of liquid cocaine, the police chief noted.
Another source with knowledge of the investigation, speaking on condition of anonymity, said that “the investor is believed to be a Colombian; that person has not yet been identified; investigations are underway; work is being done in coordination with the special forces for the fight against drug trafficking in our neighboring countries, such as Chile, basically, and Brazil.”
Two executives of the firm, which operated legally in Bolivia, are under arrest.
Congratulations on the excellent cocaine bust, and may this battle against organized crime will end successfully. Latin American governments routinely fail to manage the Cocaine problem because they focus on the short-term seizure strategies. These strategies are good PR, but not for long-term success in the war on drugs.
Demand remains constant. The more Cocain seized triggers an increase in supply, and profits. Cocaine mules detained with small shipments predominantly traffic on credit and cancel the debt with the trafficker once they sell the product in the market. If they lose the product, they generally go back to the trafficker and ask for more credit (more Cocaine) and traffic double quantities to cancel the initial debt. Its a snow ball effect.
In Uruguay for example, the banking, financial and legal systems provide the perfect vehicle to invest drug money and guarantee anonymity of investor.
Uruguayan shell companies buy goods from Europe with the proceeds of Cocaine trafficking; goods arrive in the free trade zone in Montevideo, are placed in new containers and are sent back and sold to Europe to launder the money through shell companies. Usually all owned by the same fund.
How do they get away with it?
The US lawyer that regularly sets up shell companies for Uruguayan financial advisors, Marcos Rojas, was a key note speaker at the 2011 Anti Money Laundering Compliance Conference sponsored by Florida. His lecture was titled Â¨what is the difference betwen money laundering and a good financial planÂ¨ Talk about a gamekeeper turned poacher.
Bolivia is an even bigger disaster. The tone and policies at the very top encourage the popularity and permanence of the Cocaine industry.
So- called businessmen in Bolivia are also deeply involved in the narcotics industry.
Ismael Maldonado of Tarija, for example, is widely known in Bolivia and Argentina for his Cocaine trafficking activity. Through Cocaine trafficking, Maldonado has become so strong financially that he has bought significant high level patronage and support/protection. He has a team of lawyers constantly fighting investigations and warding off convictions with technical objections. For example, the Bolivian public prosecutor and the police anti drugs unit conducted investigations against Maldonado for illicit earnings. The investigation was suspended only when MaldonadoÂ´s lawyers heard and fought to identify technicalities to suspend the investigation.
Prior to the Bolivian government expelling the DEA in 2009, Maldonado was the subject of a Cocaine trafficking and money laundering investigation and he was also the subject of cross border trafficking investigations with Argentina and other known traffickers Kim Yong Soon and Miguel Busanich. There are many others. BUt each and every time, he escapes conviction.
Maldonado launders the proceeds of this activity through his 26 stores called Fair Play where he sells athletic equiment and clothing. In Santa Cruz alone there are 4 identical stores within a 200m square box. Two of the stores are next door to each other.
This configuration creates the volume of businesses to launder the proceeds of Cocaine trafficking activity. It is called a smurf approach, where by large amounts of money is broken down into small unnoticeable amounts and washed through bank and corporate structures. This way, the magnitude of the issue goes unnoticed.
But this is not an isolated example of Uruguay or Bolivia. It is sadly common practice and sucess will only be achieved once a paradign shift is seen in the strategies targeting those responsible.
*submitted by a former Intelligence community official that spent 8 years targeting Cocaine networks in Latin America trying desperately to convince Latin Governments to adopt longer-term disciplined strategies to target the real issue - the high value individuals behind the industry.