Montreal men face money-laundering charges

Three Montreal-area men appeared in court in New York for the first time yesterday to face charges they helped launder Colombian drug money, in a case the United States government calls a landmark investigation.

The three - Juan Carlos Ellis, 45, of Ste. Julie, and Gerardo Palma and Giovanni Di Rienzo, both of Montreal - arrived in New York on Tuesday, weeks after the Quebec Court of Appeal rejected their challenge of U.S. extradition requests filed in 2004.

The men were arrested by the RCMP on May 3, 2004, after they and 31 other individuals and companies were named in a U.S. District Court indictment alleging all were part of a complex scheme based in Bogota to launder money that Colombian drug traffickers were making in Canada, the U.S. and elsewhere.

Operation White Dollar, the U.S. Drug Enforcement Administration investigation into the scheme, uncovered more than $100 million U.S. in drug money that had been converted into Colombian pesos for traffickers.

Currency brokers were used to sell pesos to companies in Colombia; in exchange, the brokers received drug money in the U.S. and Canada at a favourable rate. The brokers would deposit the dirty money in various international banking systems. They sold the U.S. dollars to Colombian firms looking to avoid taxes, import duties and transaction fees.

According to the U.S. State Department, a "prominent Colombian industrialist" agreed to forfeit $20 million after the investigation found he had bought pesos through the exchange for years.

Ellis and the two others are alleged to have taken more than

$2 million in 2002 to undercover agents posing as intermediaries for a Colombian man who arranged to exchange dirty U.S. and Canadian dollars into pesos.

During the spring of 2002, an undercover agent based in New York was asked to organize the collection of $500,000 in Montreal for German Moreno-Zuluaga, a Colombian man charged in Operation White Dollar. The agent was given a pager number and the code name El Toussou.

The information was given to an RCMP undercover agent in Montreal who set up a meeting with a man, alleged to have been Ellis. The undercover RCMP agent was handed $500,000 after a second meeting in May 2002.

Using similar methods, undercover RCMP agents were sent to pick up money on three other occasions in Montreal restaurants and hotel parking lots between August 2002 and February 2004.

Palma is alleged to have helped Ellis with some of the cash deliveries. Di Rienzo is alleged to have handed over more than $400,000 in August 2002 and to have told an undercover agent he had much more money in Toronto to deal with.

The RCMP deposited the money in a Canadian bank account and it was transferred to a secret DEA account in New York so investigators could trace the funds back to Colombia.

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